Hawaii Bans Non-Compete and Non-Solicit Clauses in High-Tech Employment | Hacker News Reader

Hawaii Bans Non-Compete and Non-Solicit Clauses in High-Tech Employment

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533 pointslutesfuentes173 comments

A really good book to read on the subject is AnnaLee Saxenian's Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (http://www.amazon.com/Regional-Advantage-Culture-Competition...). It discusses why Route 128 failed while Silicon Valley flourished. A major part is that under California law, non-competes are not enforceable in California. As people moved freely between competing companies, their ideas, information, and best practices traveled with them. The diffusion of good ideas gave the region as a whole a competitive edge.

Yes - this is an instance where a law can help an ecosystem at the expense of individual players. In aggregate though, it's net neutral for most companies, since they benefit from being able to hire from competitors. The companies doing interesting things probably benefit, while the ones doing boring things get a little hurt.

The (largely untrained) economist in me says that mobility of labor is very important for growth and economic efficiency, as systems work best when the best people flock to the most important well funded ideas.

Thanks. You touch upon one of my pet peeves. A huge amount of legislative energy is spent to ensure that capital can move around unfettered. On the contrary, movement of skill and intellectual property seems purposefully hindered. Implicitly it says that capital is much more important than the others, I simply disagree.

It helps for capital to have cheaper labor, and vice versa. :-) The system grows best when both are free. (Incidentally, this is also why I'm ok with stock buybacks. If companies can't put their money to good use, retire the stock and let people invest it elsewhere)

It's less that capital is more important and more that it's inherently more concentrated, and hence, more capable of expressing its political will.

A dynamic pointed out quite explicitly by Adam Smith in Wealth of Nations.

There's an economics term for this, though I'm spacing on the name. It's the same reason the taxi lobby is so strong - it's a subset of 1 issue voters with concentrated financial support of key issues. It's also behind why tax loopholes are so hard to close - a small subset cares a lot, but the masses less so.

There are several. Smith noted Hobbes's truism: wealth is power. You might be thinking of the logic of collective action, Mancur Olsen.

Yes - Mancur Olson it is. Thanks! It's more subtle than just Wealth is Power, as it also explains some counterintuitive results.

https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action

Quite. A personal fave.

Yes! Imagine if these trade deals were also about allowing the unfettered movement of people.

Completely agree with your awesome comment except for one niggle...

> it's net neutral for most companies

My take is that if there were only two companies this would be true. Considering that no company employs more than a tiny fraction of the skilled labour market the vast majority of labour innovation occurs elsewhere.

A company would have to be doing an immense amount of innovation in order to not have a net benefit from free movement of labour.

We could talk about whether the Googles, NSAs, or Amazons of the world hit this threshold, but I'd argue that nobody else does.

It's not a net neutral for most companies. It's a huge benefit for all the companies in that area. Skilled professionals have a choice of region and company to work in. IF they choose one with better terms for them, then that region will have a more skilled pool of workers. This benefits companies in that region. One could argue that the stronger ecosystem and pool of employees creates significant benefits that outweigh any corporate advantage due to restricting employee mobility. That's what the above reference is arguing.

Which is a good argument for taking employment law away from the states having 52 slightly different sets of laws is not efficient.

Of course this would probably reduce the number of HR roles but hey you cant make an omelet without breaking some eggs :-)

And in response, California firms repeatedly engaged in (illegal) noncompete and anti-poaching collusion to both drive down wages and limit labour mobility.

Then the responsible directors should have been banned for life as not fit and proper persons to be directors of a company.

I'd definitely like to see some personal penalty. Though Jobs is already dead.

Worth noting: much as I despise Facebook, Zuckerberg did the Right Thing here and didn't play along (though it's not clear whether or not FB reported the collusion).

Excellent.

If you want your employees to stay, and to contribute their ideas to you instead of running off to your competitors or starting their own companies, it's so so so much better to just treat your employees better than the bind them legally.

I always found it weird when employers wanted to start a relationship entirely adversarially. I also found it weird when businesses identified employees as a significant and therefore negative cost center.

Employees are life blood. If they aren't, get rid of them and get new life blood - but being so standoffish and adversarial is the antithesis of what an employer/employee relationship should be.

Just to argue the counterpoint, I prefer my employer to be up-front about the legal side. Our relationship is adversarial - mutually beneficial, yes, but also adversarial. Except for possibly in the case of a tiny company where I'm personal friends with the management, they're not going to be loyal to me in any sort of pinch. It'd be great if we could trust each other, but that's not how business works, and if I'm not assertive about my rights, or if I take them at their word that they're not going to assert theirs, then I'm the sucker.

Loyalty is not an anathema to a non trivial company, but it needs to be a core value practised across the board not just in part of the firm. It's just like altruism has been shown to be a benefit in natural selection (somewhat counter-intuitively), being a loyal employer has all sorts of benefits to the company. The problem is that it doesn't work with the aim to be a unicorn - you can't grow massively, you can't risk the company on a play. Those "plodding" companies a step removed from the white heat of capitalism, the ones whose owners are "quite rich enough, thankyou" and don't sell, the ones whose employees do spent decades working there.

A lot of management techniques come out of the manufacturing industry that was the backbone of the US economy until 1980ish. For manufacturing, it does sometimes make sense to treat employees as a cost center, rather than an asset.

Even for manufacturing, however, this was a significant simplification (but likely a good trade-off in the days before visicalc).

And then along came Japan with Kaizen and demonstrated that assembly line employees can be used to add value.

Japan is probably a very interesting case study in employer / employee loyalty. I'm sure patio11 could have plenty to add.

> I also found it weird when businesses identified employees as a significant and therefore negative cost center

But they are pretty much the biggest cost center for any employer? I'm not saying employees should not be valued and treated well, but salaries add up to a lot of money.

and without them, a company adds up to a whole lot of nothing

Yes, employees are expensive, but they're also the companies biggest assets. It's worth treating them well. Without them, you're nothing.

If a company wants loyalty from their employees, they have to demonstrate their own loyalty towards their employees first.

Edit: maybe calling employees assets is wrong, because you don't own or control them. The relationships with your employees (and those with your customers) are your biggest assets. Ruin those relationships, and you squander your biggest sources of expertise and revenue.

> It's worth treating them well.

Again, I agree.

> Without them, you're nothing.

Plenty of lifestyle business owners would beg to differ.

> If a company wants loyalty from their employees, they have to demonstrate their own loyalty towards their employees first.

How? What's loyalty in this context anyway? Working your ass off for your employer? Or perhaps not firing someone even though he's holding your business back? I would recommend neither.

You seem to have a very limited view of employer-employee relationships. Work is a big part of our life, but not all of it. We don't live to work, but work to live. Just acknowledging that would go a long way. Give employees the room they need to get their lives in order if they need it. Don't work them til they drop, but give them a healthy amount of vacation time, and only ask them to work overtime in extreme cases. Make sure they're happy. Invest in their training. Don't screw them over. Don't treat them as expendable resources. And when someone is holding your business back, maybe figure out why that is, before you blindly fire him.

What exactly prompted you to give me that advice?

I'm planning to treat my employees very well, if I ever have some.

Did you miss that I responded to you? You asked, I answered the question. That prompted me.

It's great that you intend to treat your employees well. I hope every company does that.

Nope, I just didn't see how you reached the conclusion that I needed to be told to treat my employees well.

I still don't :p

But nevermind.

You asked: "What's loyalty in this context anyway? Working your ass off for your employer? Or perhaps not firing someone even though he's holding your business back? I would recommend neither."

I consider those very short-sighted interpretations of loyalty, so I gave some better examples. If you don't want them, then don't ask for them.

I'm completely baffled by your reaction to receiving an answer to your question.

As I understand it, non-competes are very hard to enforce and are more of an intimidation tactic than anything else. You cannot be prevented from earning a living the only way you know how given the demand for your skills. If you're bound by a non-compete and the only (or the best) job available is with the competition, you shouldn't be afraid to take it, and the courts will side with you if someone goes after you (well, unless you're in Hawaii according to the article!).

An agreement is not enforceable if it is unreasonable, and denying someone the opportunity to make a living is pretty much unreasonable out of the box. Of course it's not true in every case, but it is mostly true for "techie jobs".

(I am not a laywer, the above is not legal advice).

And is very dependent on jurisdiction and changes over time in any given jurisdiction.

Illinois for instance went from "non-compete's were basically not worth the paper they were printed on" to "hmm, might need a judgement to figure it out, is it worth it?"

Washington and Massachusetts (states with significant high-tech employee bases) are also very friendly to employers in enforcing non-competes. (IANAL)

I've known any number of people in Massachusetts who have made the entirely rational decision to just hit the beach for a year rather than trying to deal with the potential consequences of a non-compete. And as someone who worked for a small company in an other state, we basically wouldn't even try to deal with a potential hire who might be covered by a non-compete--enforceable or not.

I can't speak for Massachussetts, but in Washington state non-competes have to be narrowly tailored resulting in them being relatively hard to enforce.

Didn't Microsoft choose to sue Google in Washington, when Google hired Kai-Fu Lee? http://www.nytimes.com/2005/07/20/technology/microsoft-sues-...

Looks like there are some new moves afoot to try once more to restrict or ban non-competes. Sadly there are many older, established tech companies in MA [with deep lobbying pockets] that oppose this.

http://www.betaboston.com/news/2015/06/23/tech-sector-to-rev...

They're hard to enforce, but I can tell you from experience (current) that it doesn't matter - their existence and enforceability in ANY way in a given state is harmful in a big way. California has basically done the right thing and decided to ignore them, but my home state only has rendered them ALMOST entirely unenforceable. That almost leaves a lot of room for the casual observer to judge - and it stings.

I hope that things continue to improve for you.

There are still edge cases in California too, or at least one: if you leave partnership (not employment) with an LLC registered in _another_ state, non-competes still apply. I know this from experience with H1, the Holacracy-making company. I don't blame them for having a non-compete, and I wasn't interested in founding a competitor or working for one of their clients, but it was weird to think those actions could make me liable.

Non-competes aren't there to be enforced, but to make the person stinky to future employers. A decent company will cover legal expenses and, in the extreme outlier case, judgments-- and an indecent one will fire you, but you probably won't get sued in either case. The effect of a non-compete on a star hire is relatively small, but if you're an entry-level engineer, the difference between $85,000 per year and $85,000 per year plus theoretically unbounded legal risk is huge.

Non-competes, non-solicits, and (except in a severance) non-disparagement clauses are shitty practices that deserve to die in a taint fire.

Except that the junior engineer's old company won't sue because he is just a junior engineer...

The non-compete risk probably comes only with the star hires / client facing employees (risk of clients being lured to the other company).

Except that the junior engineer's old company won't sue because he is just a junior engineer...

True in practice, but there is risk.

Plus, it's just a shitty conversation to be compelled to have when you're trying to convince someone to hire you. ("One last thing, I'm under this non-compete, so can I get a written agreement to cover legal costs?") An executive can probably get that protection. For a junior, that's a deal breaker. And typically, the vindictive or paranoid firm won't actually sue your next company, they'll just ask your new firm to fire you... and often (for low-level people like software engineers) they will.

Tech is diverse enough and "competition" generally amorphously-defined enough that junior engineers rarely get strung up on non-competes. It's more of an issue in finance.

The only time it happens in tech is when there's a deliberate attempt to destroy someone's reputation, like what a few people (none especially important) from Google tried to do after I left that place.

I think the winning strategy in this case is to conceal from your prospective employer that you're under a non-compete and hope for the best.

If your former company is not vindictive enough to send a copy of the form to your new employer, you win. If they are vindictive enough - you lose, but you would have lost if you told your prospective employer that you were bound by a non-compete anyway.

The mere fact that skilled workers need to contemplate such deceptive tactics as part of their everyday "pursuit of happiness" so that a business can enjoy some risk mitigation I think underlines that Hawaii is spot on in making non-competes outright illegal.

>>The only time it happens in tech is when there's a deliberate attempt to destroy someone's reputation, like what a few people (none especially important) from Google tried to do after I left that place.

That sucks, sorry. I agree it is an unnecessary complication for engineers which may or may not give companies any real protection.

This is but one of many tactics employers will use to try to decrease their own employees' value on the open labor market.

Yet if you hire someone under a non compete in many states the court battle will cost you 50-100k. Until they're blatantly not legal they're still a huge pain.

1 - I lost a job in nyc when counsel at the new company decided my old company was too close because they both did internet advertising

2 - intimidation works quite well up to your ability to front giant legal expenses. While stuff may or may not be unreasonable, most of us aren't in a position to front tens of thousands of dollars that you probably won't get back.

I just wish that misrepresenting someone's legal rights or the enforceability of a contract were itself illegal.

It's hard to be certain of the enforceability of terms unless you've already got the judge in your pocket, and it's easy to put "to the extent allowable by law" everywhere.

As an employer, I'm quite fine with this - as the law still allows for an agreement to be made about soliciting clients.

If relationship with an employee and my company sours, all I really care about is that poor relationship not transferring to the relationship between my company and my clients.

Artificially locking ourselves into to a bad employer/employee relationship does nobody any good.

I think the reason some employers want them is because they don't want to put the effort into building up an employees skills just to have them move to a different company right when they become useful.

When you are an employee under these laws, you tend to put a lot more thought into choosing a company you would be willing to stay with as long as you are interested in that section of the industry.

It's a valid concern - that by training your employees and giving them experience, you make then so valuable that they can leave.

I fight this problem several ways:

I turn our services into a products so that I can onboard people quickly and drive down costs - for example instead of telling each employees to setup a backup on a server, I had one employee make a script that we can deploy on all new servers. By turning processed into an easy to deploy product - It also keeps boredom low.

I give raises quickly and early to match new skills, so that when they do go job hunting they don't see a tremendous pay increase.

I compartmentalize employees so that they get really really good at a smaller range of skills - this lets me charge the customer more, and lets me pay my employees more, but it also has the side effect of diminishing job prospects.

That last point may sound evil to some people who want the employee to hold all the cards. But it is the classic division-of-labor approach that increases productivity in any undertaking. And it's a win-win since you can charge more and pay more.

it also has the side effect of diminishing job prospects.

What exactly do you mean? In my experience companies often try to hire people with specific skills instead of generalists (which btw is a mistake imo, smart people will be able to pick up the skill in question).

I certainly agree that smart people will quickly develop!

Based on the small size of the company, I must hire people who are intelligent and yet are passed over by the job market because they can't display that with a degree or job experience, and I've found your assertion to be true.

You're probably correct - perhaps given that we pay well and hold fast to 40 hours- it's more likely that there's not much incentive to leave.

> I fight this problem several ways

This is completely, totally, and nonsensically evil that I'm not sure even where to begin. Supposing your company hired me and I knew this was the opinion of anyone who worked in management I would be polishing my résumé my first day on the job. This is the best way to make sure that the only people working for you are mindless drones and your HR office is a revolving door rather than a ladder for people with an ounce of ambition.

I have yet to ever interview for, or interact with/work for, an employer in high-tech Silicon Valley who did not obviously (to me) share these beliefs. Could you talk a little more about your experiences?

I wasn't clear enough - by investing time and energy into simplifying our mundane services into a product, we're able to expand into more interesting projects - and we have the profitability to do charity work and blue sky work.

I'm certain that there are employees that like rote work, but for me, I can't stand it and project that onto others.

What I reacted to was the suggestion that

> it also has the side effect of diminishing job prospects

is a good or desirable thing.

For the employee it's not. For the employer, it obviously is. If you can't get hired somewhere else, you're not going to bail.

As someone dealing with basically this situation, it sucks, but if I was also getting handed one-off "solve this puzzle and we're going to use the code you make every day" problems and raises early and often, it wouldn't suck nearly this much.

I'm making the attempt at being brutally honest. I share this as honesty as well as I can with my employees - as they understand the career and employment pitfalls of being the "PostgreSQL on ARM32 FreeBSD 9.1 dude" as opposed to the "I can figure out [anything]SQL on [anthing] dude"

I supposes I could sugar coat things - but given that I'm hiring really smart people they'll figure it out and won't trust me one bit.

There are companies which love all-around workers who can pick up all shits tossed from anyone. You will have to deal with everything from setting up a website to debugging a Windows device driver, and probably fixing a motor fan occasionally. They will tell you that can contribute to your value as an employee and help your job prospects. But the truth is the management does not have the skill and interest in task division. All they can do is sort of 'people skill' to make you voluntarily stay overtime and get the shit done ASAP.

I would rather not having that kind of job prospects.

Your problem is when someone you have a good relationship with is seduced by something hotter and sexier.

I can see why's that would be frustrating, but my employees are not "mine" - so they are free to go at any time and hence, I need to treat them well.

If an employee is seduced by an offer that doesn't work out - they can (and have) come back and can bring back what they learned.

One of the thing that I learned from such exits an re-entryies is that money is not always the best motivator - I used to run really lean to have a high payroll. Now I run lean to provide a good work environment - I can now fire bad companies that don't respect my employees.

> I can see why's that would be frustrating, but my employees are not "mine" - so they are free to go at any time and hence, I need to treat them well.

It's great to hear someone articulating that point on HN. There is too often a constant stream of suggestions to the effect employees are a form of chattel.

If I hadn't started my new job just this week, I'd ask if you were hiring.

Thanks for expressing that point of view.

Romantic relationships are also not somewhere where people should be punished for leaving because they were seduced by someone hotter and sexier either. People are not owned by anyone but themselves.

Man, did I ever say people needed to be "punished"? No. All I said is that it happens. Did I say it was right or wrong or that people are owned by other people? No. I never said any of those things. You made an assumption, and I'm sorry to say, you're utterly and completely wrong.

All this analogy implies is that an employee can be seduced by a newer, trendier, higher salary startup.

Stop forcing your preconceived opinions and assumptions down my throat.

A company I worked for recently had non-competes and non-solicit clauses. A new employees was negotiating their contract, and I told them to push back against the NC/CS clauses.

I spoke with the management and asked why they needed them, "to prevent problems" they said. I pointed out that they didn't have the non-competes for their employees in California and asked if they had problems there. They weren't aware of any problems in California, yet they thought it perfectly logical and needed to ask for them elsewhere.

because lawyers...

Not just funny, but true. When you invite a lawyer into a discussion, what is most straightforward way for them to show they are contributing? More clauses.

My firm's done negotiations with banks, and they all do the same vanilla business. Some have lawyers very close to the process, and some keep them at a distance. Of course there's always more back-and-forth when the lawyers are there, even though the business is the same for everyone. They try to sneak in ridiculous clauses and fight you on everything.

In my personal experience, that "wtf clause" embedding is because lawyers are at the coalface of dealing with the assholes of the business world. When it comes to rules-based systems like law, the assholes of the world are the ones that drive fractal-like complexity in the rulesets, with their continuous seeking of edge cases to externalize costs upon everyone else they can possibly unload to while profiting from finding said edge cases, and the subsequent response by the body of law or by a law instrument to counter that behavior. In other words, the assholes work the contract instead of the actual relationship.

We need something like Iain Banks' envisioned "slap drone" for the assholes, but in the meantime, I'll settle for discreetly negotiated relationships that create exceptions for my company. Law also needs to evolve more formalisms around invocation of privacy and other personal space / personal resource (time, especially) concepts that are currently not well defined at the moment, but are rife with predation by the assholes.

I have found company counsel to always be willing to strike clauses for me if I negotiate with them amicably and agreeably, and preemptively provide them a "trust but verify" action they can perform that absolutely cannot be faked by an asshole participant. Clauses ranging from "all your bases are belong to us" IP seizures, sky-high insurance requirements, invasive financial reporting, you name it I've probably seen it, have all be negotiated away in this manner.

In Hawaii before this law, lawyers were the only profession exempted from non-competes. Our lawyers in Hawaii are well trained and the many firms are very competitive. They were smart enough to exempt themselves.

Wish NY did the same. In NY they get to own all your ideas both at work and "off the clock."

How the hell can that be legal? That would be the legal equivalent to a person working in a factory and doing the same stuff as hobby at home not owning the products he made at home.

Doesn’t this infringe at least a few universal human rights? o.O

That pretty much defines most working relationships in the U.S. The employer-employee relationship is rooted in English Master-Servant common law.

I don't think that the explanation is so simple.

A different way to put it would be that it is based in the way that U.S. law allows you to sue anyone for any "damages," real or imaginary, only proving that you got hurt. Any potential employee can have an idea that is derived from trade secrets or other material not meant for people outside of an organization, and it's not possible to simply turn off this ability or create a distinction between ideas that are completely independent from that information or not. Because of this, it's possible to incur some level of damage to an employer with an idea that was technically had at any time of day.

There's a big difference between hourly and salaried positions. It's harder to define "off the clock" when no one is actually clocking you in the first place.

that's a kind of flimsy excuse for saying you own someone's intellectual output 24/7

It is not accurate. Your employer owns all intellectual property you create on or off work (meaning you technically can't contribute to Wikipedia or most open source projects) and even owns the bedtime stories you make up to tell your children, but ONLY if you sign a contract saying so.

By pointing out the above cases I have gotten an employer (not in NY) to alter the language of their IP contract.

The point is that some contracts are unenforceable. It is impossible to give up some rights in a legally binding way.

Are you serious? Do you have a source for that?

That sounds like working on a plantation. Everything you pick is your master's.

Depending on the state the rules are different. Generally if the work is the scope of your employment it is your companies IP. Scope of employment typical factors in the time it was created, the place it was created, and the similarity of the work.

The safe bet is to get approval from the company so it doesn't cause issues.

As I understand it, this just means they're allowed to require you to sign a contract saying that they own your "off the clock" work, not that they own it by default. Or is it different in NY?

Note the post is about non-compete ("I won't go work for a company in the same market for X time") and non-solicit ("I won't convince my coworkers to come with me") clauses. IP assignment is separate.

https://www.ieeeusa.org/members/IPandtheengineer.pdf

IP assignment can be non-compete.

Had one company give me a non-compete and IP agreement that said they owned all the stuff I invent while working there or for 12 months after I stopped working there.

So what?

If I work for Tech Company A (that develops products in one market area), and leave to go to Tech Company B (that develops products in a completely separate market. ie. They don't compete in any way for market share), everything I do for Company B in the 12 months after leaving Company A, actually belongs to Company A?

Depends how hard Tech Company A can push, basically.

Yes, if company A wants to pursue it. Is company B really going to want to invite that trouble?

Any product company insists on clean IP rights. 'pg tells a story of how this nearly brought down an early acquisition he was involved in (perhaps Viaweb) because they didn't have a proper IP assignment from one employee.

The company I recently joined had such a license, but then had a rider specific to Washington state that basically limited the scope to the particular industry and/or using company resources, which I find to be far more reasonable.

I always wondered how clauses like this work for married people. After all, the law considers everything created within marriage to be property of both spouses. So, technically, should employers be asking both the employee and their spouse for an intellectual property assignment agreement?

I cross/line out any portion of employment agreements that say such things... I've never had any push back about it.

I wish I could upvote this another couple hundred times. I was having a conversation with another tech industry person a couple months ago who's been out of the workforce for a bit, and is thinking about getting back in but is hesitant because they don't want to work ridiculous hours.

I suggested that they could make this a point of negotiation in any offer that's made, which could take the form of the company offering them a four day work week, etc.

While I make this a habit as well, it should be noted it's not a panacea.

I have in at least one case been told in no uncertain terms there would be no employment without signing the agreement precisely as written... and unfortunately, after not getting paid in a timely manner from an earlier gig, I needed the job more than they needed me.

I first discovered this flexibility signing up for a simple warehouse laboring job while I was a student. It had a "don't work in our industry for a year" type clause. I expressed some concern about that and the boss just crossed it out. These things look formal and rigid but they're not set in stone.

One company I worked for definitely pushed back on that.

Since it was in California it was fairly narrow (only if you used company resources, or if it was related to company products). I also had zero trouble getting sign-off for any open-source projects I wanted to contribute to.

I did cross out a bunch of non-compete and some ridiculous post-employment IP claim provisions and refused to take an offer from a midsize NYC hedge fund which constantly self-proclaims as "technology company applying talents to the domain of finance". Their contract was pure evil by California (and reasonable people) standards and I realized I wouldn't be able to negotiate my way out of those clauses (even though they seemed to have liked me enough in negotiating the salary). I made it clear to them that this is not a tech company's behavior. It was a hard decision for me to make considering my situation at the time and the offer's $$$ compared to SV big cos, but I eventually realized that someone should take a stance against this form of slavery and we are responsible for not letting this crap perpetuate. If more people pay the cost of saying no, they'll have to cave eventually.

(throwaway because I don't like admitting I interviewed at a hedgefund publicly on the internet.)

It's simple. Don't sign a contract with ridiculous clauses like that. Demand for good engineers is high enough that it won't prevent you from finding a job.

Most people who apply to jobs are not seen as "good engineers," they are hazed in the interview process. Meanwhile, the bank account is draining.

If you're an engineer with an employment contract in front of you, you're a good engineer. You can get a job elsewhere.

I would dare say it's worth going into 1-2 months of debt to work where you're respected versus staying in the black and working where you're not.

This is good development!

I'm not sure how effective the law will be though. As others mentioned, those agreements are hard/impossible to enforce in court, part of the reason of which is that they are completely one-sided, vague and almost enslaving (we own whatever you create also in your own time, can't compete directly/indirectly for 10 years after leaving, can't use anything your learned while working for us...). But what stops the ex-employer accusing the ex-employee of stealing trade secrets and keep them in courts for ~3 years (and forcing to spend hundreds of thousands)? Cause, you know, it's hard to litigate with someone who has a few orders of magnitude more resources than you do.

As for non-solicit - I have a different opinion. Have seen companies breaking apart because some of the middle-managers/team leads decided to leave the company and take their team and the clients (with whom they had direct contact) with them. E.g. that's how Lycos Armenia's history ended.

This only possible because companies want to be able to fire their employees quickly so that means the employees can leave quickly. I know of one place (in the UK) with a one year notice term. You can't leave quickly so their business is secure but you are secure too as they have to give 12 months notice before letting you go.

12 months for both sides? So if an employee wants to leave the employer can make them stay for one more year? Doesn't sound like a good thing to me.

12 months is extreme. But it's extreme for both sides.

If the company goes under, good luck getting a year of pay from them.

It is better than many deals, but still seems to favor the employer for the reason most laws do, which is that when a deal is between a person and a company, the law never treats them the same and the company gets what I always see to be the favorable treatment (for example, company can't go to jail).

It's not always true, at least not everywhere. E.g. in my country (Armenia) the employee can leave whenever they like with just a two week's notice (except in situations when they have some central/important role in the organization - in that cases it's 1 month). The employer on the other hand has almost no way to fire someone if he doesn't have very good reasons for that (e.g. lost trust in employee). Mass layoffs are allowed if there is some global change (technology, economy, ..). In that cases the notice period in 3 months.

I guess we inherited this from the USSR (where corporate interest was not a thing) and just didn't have time to change yet.

How is this enforceable? Do they get constables to round you up and handcuff you to desk? What if they just sit there all day doing nothing, they can't be fired for 1 yr?

I can't imagine anything forcing someone to work. I can see something like loose retirement, stock options, whatever if not giving 1 yr notice.

In the UK they would sue you for breach of contract - In reality a compromise agreement would be reached.

If your employee is going to leave anyway, your best course of action is to encourage them.

Perhaps something along the lines of: "We're really going to miss you, but it's clear that this is a great opportunity for you. When it's time for you to move on from that role give me a call... I'd love to chat with you about roles back here that would be a good fit with that additional experience under your belt"

Non-competes are the most anti-American, anti-business, and anti-innovation devices ever created. They are protectionism. They need to end everywhere.

Employment will only be more fruitful with freedom to create and innovate. It encourages companies to pay people with skills in their field. As the country moves to project/entrepreneur based contractual employment this is actually a big issue.

There are companies out there that simultaneously proclaim the need for strict non-compete laws while also stating how difficult it is for them to hire qualified candidates, never seeing the conflict.

"The law clearly violates corporate equal protection under the 14th Amendment and I am just waiting for a client to ask me to challenge the law."

Couldn't have picked a more biased source ;)

I think we need to establish a constitutional amendment that explicitly states that non-living entities (companies, corporations, etc) are not legally allowed to express opinions in so far as they donate to PACs or directly to campaigns. Also, that the congress or the states may limit the rights that non-living entities have beyond what an individual who works for or owns a non-living entity has.

"Corporate Personhood" is such a horrible idea that it just doesn't make any sense at all.

EDIT: for clarification, the 14th amendment refers to Person(s)/People, not corporations specifically... which is where my statement was coming from. It may not be a popular subject, but the fact is that corporation rights exceed that of people at this point.

On the contrary, if corporations didn't have personhood, we could not sue them when they did wrong, or enter into contracts with them.

Personhood has its own challenges for sure, but it originates more to protect people than it does to advantage corporations.

The point that's being missed in this discussion is that corporations are abstract entities defined by the state and society, ideally for society's benefit (otherwise why the hell would or should they exist, and also the original corp was for public benefit). These abstract entities can be given attributes, rights, relationships, etc. as needed, but they do not have any inherent properties in and of themselves.

Corporate personhood is an analogy, and a poor one at that. Many of the properties we assign to personhood are not suitable for corporations.

I dunno what gives you the impression that I've missed that point, really, but the scope of your message, which comes across to me as "perhaps we could slightly restructure the rights and responsibilities of corporations to better fit what we see as their role in society" is dramatically different from "Corporate Personhood is such a horrible idea that it just doesn't make any sense at all."

Both statements are equally true, as is my rebuttal. We perhaps could reframe the rights of corporations, but abolishing personhood would likely make the situation far worse than it makes anything better, as we then lose the ability to enter contracts with or sue corporations.

Much of the abilities of corporations that stem from personhood are commensurate with their other roles. I personally don't see a problem with corporations having representation, as those same corporations are otherwise bound by the laws of the land. Despite the "Wal-Mart is not a person" rhetoric, it's worth noting that many corporations are sole proprietorships, or, rephrased, people, and if they have the responsibility of obeying the whimsy of the legislature in the myriad regulations they are responsible to perform (worth noting, corporate responsibilities are typically far more burdensome than personal responsibilities) that they have the right to speak out against that whimsy where they wish.

That isn't to suggest that my word is definite, and there's definitely wiggle room to restructure, but as it stands, corporations have burdens, and knee jerk responses neither obviate nor necessarily better the proportionality of their rights in response to those burdens. Ut totum, abolishing personhood is, I think, as horrible an idea as mandatory mediation.

I think you should note that "protect people" is in the sense that instead of suing CEO & board members you're suing the company. So it doesn't affect them personally.

What I meant, specifically, was that "protect people" is in the sense that if corporations did not have personhood, then we could not sue them.

Large hospital accidentally chops off both your legs? Too bad, suckah. Can't sue.

Yes, it also protects the employees and board members of said company from personal responsibility sometimes, and that is indeed a feature of personhood, but it also protects the consumers of a corporation's products, whether we realize it or not.

Corporate personhood protects individuals at the company and limits the liability of shareholders. I think there are positive indirect benefits to the economy at large, but I would certainly think that the direct benefits are clearly in favor of the owners and executives of the corporation.

There is nothing in the constitution that says we can't sue legal constructs which means that while tort law and contract law might need to be updated (and while not a lawyer I suspect there is already a lot of parallel law for these cases because corporate personhood is a leaky abstraction) it certainly wouldn't be impossible.

And of course this ignores the fact that corporations with personhood are not the only way to organize a company or the only way to limit liability.

Let's pack up all the Silicon Valley engineers and move to Hawaii ;)

Sadly it's a much cheaper place to live.

Housing maybe, although not the stuff I have imagined in my head. Everything else is really expensive in hawaii though because of shipping costs and lack of scale.

Cost of stuff is only important if you spend all of your money on stuff. With a tech salary, the cost of food going up 15% should be nothing compared to the rent you will save.

You think the cost of food is only 15% more? That's funny.. still not enough to offset the cost of housing in SF though. Been looking at moving out to San Jose (to work in Los Gatos, that's expensive to live in), and need to make about 75% more to offset the cost of housing and taxes than I do in Phoenix.

I totally understand why some large companies would put their IT hubs in Texas or Arizona now. Relative to the cost of living, we have it pretty good here.. I don't want to be outside in June, July or August though.

>> I don't want to be outside in June, July or August though.

There's also rattlesnakes, scorpions and Giant Redhead Centipedes: http://www.nydailynews.com/news/national/texas-wildlife-offi...

We had a rattlesnake sun bathing in our back yard, we've killed 2 of those centipedes in our garage and 2 or 3 scorpions in the house (always look in your shoes).

There's also the red ants, vicious little creatures then of course the drought years followed by a flood year or two.

And don't get me started on allergies.

I always found it odd that houses have one job - to keep varmint out, and they fail so miserably

What are you talking about? I was pointing out how expensive SF is and how you might hit a 15% higher food cost in Hawaii than SF. But that will be offset by the massive amount you will save in rent.

Okay, but if you're only talking about SF then that's pretty silly. Because there are parts of the bay area that are much cheaper although I get that even they are expensive. But if you're paying to live in SF proper or Palo Alto proper you're paying a premium for either a low commute or to be around other tech people or both. You can find places that are affordable in plenty of parts of the east bay.

Also this seems to suggest that honolulu is the 5th most expensive city in north america: https://www.expatistan.com/cost-of-living/honolulu

I imagine smaller parts of hawaii are even more expensive because they're probably more touristy.

I wish there were a Presidential candidate that would make come out strongly against these things. Left or right, I'd vote for him/her. Unfortunately, most Americans probably are not affected and thus do not care.

The question I have is "Why limit this to High Tech"?

Lets see Illinois do this as well!

Good for Hawaii! Georgia went the other way. My advice to anybody is to not sign them if you are asked to. They are bad for everybody.

Doesn't work in my experience. I started not too long ago at a startup whose founder actively publicly campaigns against non-competes. Yet there was still a non-compete in my employment contract, and they wouldn't let me strike it, presumably due to pressure from their lawyers regarding potential investors.

They have laudably since removed the clause, even retroactively from current employees' contracts, but it just goes to show how little bargaining power employees have in the arena of employment contracts.

Investors and banks are the root of the problem when it comes to non-competes. They insist that companies include these in all employee agreements.

If you live in a state where non-competes are legal, and if you are a job candidate and they refuse to let you strike the non-compete, then push back with the following: If employment is terminated by them and not you, ask them to pay you 100% of your salary during the non-compete duration so you can go on "Gardening leave". If they refuse to do this, then decline the job offer.

Oh, and make sure you state that you need to see everything up-front I will need to sign in the next 6 months as an employee in the offer documentation package. Some ethically-challenged companies wait until you have accepted the offer and hit you with the non-compete and invention agreements on your first day of employment with a "sign or be fired" requirement.

My understanding is that if non-compete clauses are unreasonable then they they are generally unenforceable. As in if they put undue hardship on you finding employment elsewhere. It seems the exception is usually up at the senior leadership and C-level where strategic intelligence comes in to play. (joe/jane-coder not so much.)

Unfortunately "unreasonable" is something that generally requires a court to define. That's a big burden for a worker to bear even in the most justified cases.

especially when said worker that bothers to sue is unemployed.

But "unreasonable" varies by jurisdiction, and as the (blatantly) pro-noncompete author of the blog post notes, Hawaii has previously legally found even three-year noncompetes not unreasonable.

How does it work out in the US wrt what you can bring with you to a new employer, where non-compete agreements are outlawed? Is all information then free game? European countries tend to have it in national legislation that you can't disclose important trade secrets.

Good for Hawaii!

MA has tried to do this recently but sadly the big corporate interests were able to bribe the pols; not a surprise really since MA politics are completely corrupt.

I wish this would happen in Ontario; I know a judge struck down a non-compete/non-solicit clause in one case but employers still stick that shit in.

Sadly the most important ideas are rarely the best funded. For example Zynga has vastly more funds at their disposal than Wikipedia, and I'd challenge anyone to argue that's the right way round.

Of course it's the right way around. Wikipedia has, basically, what it needs. I don't see how throwing more money at Wikipedia is going to accomplish anything.

Oh? And Zynga "needs" something? Or is going to accomplish anything nearly as worthwhile as Wikipedia? Or... ?

People enjoy the games, they pay for them, those payments accure to employees of the company and eventually investors who make it all possible. So the whole goal of the business is literally creating happiness.

The investors, having produced value, can then invest in something else.

The people playing the games are also producing value, because they earned their paychecks doing something productive for somebody.

Of course, all of this is true of every productive company and is readily evident in everyday life (unless you live under communism). You need to take an econ 101 course. Or maybe just pay attention.

I feel sorry for you, needing to resort to those kinds of statements. Whatever made you that way, please know that life gets better, and it's possible to draw inspiration for positive change from many different things around you. It'll get better, buddy, I promise.

Until our civilization collapses. Then it will get better for all except humanity.

Including the value of donations of free labor, I suspect Wikipedia is much better funded than Zynga.

We detached this subthread from https://news.ycombinator.com/item?id=10014392 and marked it off-topic.

Why is this limited to just the high-tech industry?

Because the major industries in Hawaii (tourism, agriculture) don't want anything to do with it.

The individual citizen (!) who lobbied tirelessly for this bill tried to get a broader version passed in the previous session. Unfortunately as bbanyc45 points out there was too much opposition from entrenched interests for that to pass. So he tried again (which is pretty admirable), this time using narrower language.

Are there any clear and concise sources regarding non-compete and non-solicitation clauses and their enforceability in various states? Basically, some kind of primer on the topic?

I think there needs to be some middle ground. What is completely ignored by such an "all or nothing" law is the trade-offs required in order to create a high quality of life for individuals while also thinking of our society overall.

It is in society's interest for some industries to be protected - in order to avoid low-cost competitors and worse employers. We are over-reacting.

Middle ground in inherently non-equal relationships (employer-employee, landlord-tenant, etc) doesn't usually work because the areas close to the line need courts to sort them out, and courts cost money, which one side of the relationship doesn't have, so what happens instead is that the line inches slowly but surely in favor of the powerful side of the relationship because no individual can afford to challenge it.

There are some ways to combat those effects - for instance, large statutory damages make the reward larger, and unionization makes the individual risk lower - but by far the simplest and most direct is to sacrifice nuance to at least avoid a worst-case option.

Trade offs don't work with fundamental rights. You should be able to practice your profession anywhere, and FUD surrounding the ability to hire top talent yay depresses wages across industries.

It is not in societies interest to bond employee to employer, ever.

Ah so Taxi companies should be protected against Uber then.

or like how France claimed that a yogurt maker was CNI to avoid a takeover recently

In unrelated news, Hawaii's High-Tech industry collapses.

I think this policy is awesome and should be universal, but it seems a little crazy to enact it unilaterally - if a company can choose which state to operate in, Hawaii is going to lose out to all the others that allow unfair (IMO) employer protections.

Aren't non-compete clauses banned in California?

In general, but the more accurate picture is that they aren't upheld except in very specific circumstances.

Pretty much, as long as you're an employee.

There may be exceptions if you're the owner of a business that you sell, or a member of a partnership that's dissolved, or part of an LLC that's being dissolved.

Useful info on US noncompete laws:

https://en.wikipedia.org/wiki/Non-compete_clause#Exceptions_...

In unrelated news, employees seek tech companies in Hawaii that don't screw them. This policy is one of the key things that makes California a great place to be an employee. Being able to quickly move between jobs opens up so many opportunities for growth and career advancement that it seems like a different world from the tech scene in NY.

> Hawaii's High-Tech industry collapses.

That would require that we actually have a functioning high-tech industry to begin with.

>if a company can choose which state to operate in, Hawaii is going to lose out to all the others that allow unfair (IMO) employer protections.

If a company is based in Hawai‘i, the only reason is that they don't have any other choice to begin with. We have terribly high costs of living and a crazy low talent pool. Vast majority of development work here is DoD related and for on-site contracts.

Yeah I thought most tech jobs in Hawaii were contracting gigs for the Navy.

CA has relatively weak laws in this regard and it hasn't hurt their high tech industry one bit. On the other hand, it makes it much easier to start new companies. Strict non-compete laws are a legal barrier that large, lawyer-rich corporations built to limit competition.

actually this is pretty astute from a startup viewpoint.

startups are the one who usually fear ex-employer non solicit, IP and non compete clauses. So fundamentally, Hawaii is building a startup friendly ecosystem.

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