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Comment by drawkbox | Hacker News Reader

Non-competes, the most anti-innovation, anti-skilled worker, anti-free market, anti-business and anti-American thing in working today. Non-competes are protectionism for larger businesses over small/medium businesses.

As a freelancer, contractor and self-employed business owner/worker, please make these illegal, tired of these.

The worst part about non-competes is they are blanket protectionism usually and up to 2+ years of non-compete, this sometimes happens on a job that is only 1-3 months. You have to laugh at those types of situations. Usually the client will push them aside or lower the time to the job plus some time, but both non-competes and arbitration agreements are horrible for workers in today's economy where people change jobs frequently and many are self-employed/freelancing/contracting.

The non-compete should not exist, at the core removing competition from skilled workers in our economy is bad all around, unless you are one of the current big fish.

View on HN

I posted this above, but it applies here too: Non-competes allow employees to get training they otherwise would not get.

A non-compete allows a company to make an investment in you (in the form of training) with some assurance that you will not immediately turn around post-training and go work for a direct competitor. NDAs/IP assignment agreements do not address this need. If it weren't for non-competes, that investment would be infeasible and we would all be paying our employers for the training we get – either directly, in the form of course fees, or indirectly, in the form of depressed wages during the course of the training.

For a deeper dive on this, see Paul H. Rubin and Peter Shedd, "Human Capital and Covenants Not to Compete," available at https://www.jstor.org/stable/724227?seq=1#page_scan_tab_cont....

>Non-competes allow employees to get training they otherwise would not get.

Yeah, because employers refuse to train employees unless they sign a non-compete. It's not that they are unable to provide training, it is that they are unwilling. If Non-competes are banned, then they can start providing better training to more workers because there's no more needless red tape...

>A non-compete allows a company to make an investment in you (in the form of training) with some assurance that you will not immediately turn around post-training and go work for a direct competitor.

Then why to most non-competes extend 2 years after you leave a company, and why do they get applied to workers who have been with a company for years? You, like many others in this thread, seem to be confusing "experience", a thing the employee owns, with "training" and "know-how", things the employer owns.

Non compete is fine if you were paid full salary for the entire time.

For the entire extent of the non-compete or for the entire time of your job? If it's the former then maybe (Germany requires at least 50% gross for the extent of the non-compete, and it can still be struck down by courts if it unreasonably hampers the former employee's ability to find a new job)

Which full salary, the one you got before, or the one you could make as a skilled software developer moving to a much better gig with a rival employer willing to offer a more attractive deal?

This is a good question. I think if you were offered better salary, the former company should either match it or let you take new contract.

This is sensible but its a lot easier just to make non competes go away entirely.

In the end if there is no compete clause in your contract, you can just not take it...

That might be okay for a software engineer who can likely find a different offer somewhere else without much trouble, but that's not going to be realistic for everybody.

That is a good strategy, but it will just cause unemployment to rise.

Though, I wouldn't mind keeping my own "non-termination agreement" on hand so that if I am asked to sign a non-compete, I can ask them to sign my contract too.

After all, if they think it's fair that I shouldn't be able to work for another company doing the same thing, it should be equally fair that they can't replace me with another worker doing the same thing.

So yeah, I'll sign your non-compete, so long as you agree that you cannot terminate me without invalidating it.

So now what happens when a competing firm starts "offering" artificially high salaries just to force the current employer's costs up?

Some workers will switch to the competing firm, causing pay disparity within that firm, which in turn might cause decreased worker productivity or brain drain.

Depends. I'll happily take my old salary for just sitting on my butt and not doing anything. Of course, I would not be sitting like that - I'd probably take a part-time job somewhere else, and spend the rest of the time educating myself (for my field as well as for other things). Non-competes don't cover reading books.

That, or go back to school on their dime. Then you make yourself that much more wanted.

Or you could develop some software in your spare time for your own use that you could repurpose for commercial sale and release once the non-compete has lapsed.

Are you more attractive to the new employer because of the training and education that your current employer has provided?

In my entire career (as a professional software developer) I'm pretty sure every employer I ever worked for gained far more from my own personal development off the clock than they ever gained from any training they provided, not least because the main "training" most of them provided was simply a chance to use my skills and develop my experience. I therefore find the whole idea that an employer is somehow nurturing and developing someone in our profession and so should be entitled to everything that person ever does, even off the clock and even into the future, a bit bizarre.

Even if it weren't, employers aren't hiring machines, they're hiring human beings. If they've become so greedy that they have forgotten that, I see no reason our laws shouldn't compel them to treat their employees (and past employees) properly.

From your comments I gather you might not understand the problem.

Were Soft Engs simply to do 'work' then you would be absolutely right.

But in a world of IP ... it's a different story.

Company ABC brings you in, trains you on their know-how and core IP, which took a lot of struggle, $, and R&D to create - then you leave, go to a competitor, and effectively communicate and give away ABC Corps. most valuable asset.

Non-competes can certainly applied far too aggressively, esp. in situations where there is not merit ... but there are definitely cases wherein I think it does make sense.

I'm thinking companies like DWAVE in Vancouver that built the 'first' qubit/quantum computer. The guy spent his whole life developing that tech. It's feasible that Google just grabs up some of the team and internalizes all that work and effort for the price of a few headcount.

It's a real problem in some cases, but worse - very difficult to parameterize.

> Company ABC brings you in, trains you on their know-how and core IP, which took a lot of struggle, $, and R&D to create - then you leave, go to a competitor, and effectively communicate and give away ABC Corps. most valuable asset.

Um, that's covered by an NDA--Non-Disclosure Agreement.

Those are generally QUITE enforceable, even in California and often last for 3 to 5 years.

Non-compete is quite different.

Your comments about NDA's are not quite right. NDA's do not capture a lot of the essential issue.

Pragmatically speaking, it's nary impossible to work in some fields, and then move to a competing firm without passing on know how or trade secrets.

Even the 'manner of approach' to a problem, while it may not be a trade secret, is basically a core part of the 'true IP' that is developed by a company.

Using DWAVE as an example - there are thousands of 'little things' that they will have had to figure out along the way - from which parts to use, which vendors work well, material types, tooling, physical test units, support gear (like cooling etc.) - all of this is IP.

Any number of small issues can be the 'key ingredients' that make or break a project. When DWAVE spends a year trying to figure out how to keep some material at a steady temperature in order to bind it to another ... then that's IP.

It's a paradox when nearly one's entire skill set is tantamount to 'trade secrets' but it's feasible.

An NDA - in the broadest sense - in this case would be a de-facto 'non compete' - because there's hardly a thing this Eng could do for Google that wouldn't involve giving away important information.

In case you guys are not aware: hiring people to steal away trade secrets and know-how is very common in the Valley, often by major players and firms.

If you haven't noticed - the biggest and most successful tech companies all have either natural monopolies (i.e. Facebook/Twitter with network externalities), or insurmountable massive barriers to entry keeping others out (i.e. Apple having MacOS/iOS, a retail distribution chain, massive leverage over supply chain, and market share).

In business scenarios it happens as well, in less 'protectable' scenarios. Apple snared away tons of BlackBerry sales/BD execs - not because they were necessarily skilled or talented - but because of their established relationships within carrier channels. Apple was buying access to Verizon and AT&T - not random sales guys abilities.

That's certainly a problem about salesmen taking their clients and other relationships with them. For small sales-only companies anyway, where the company doesn't provide much infrastructure beyond a desk and a phone. But in those cases, maybe the company really is a bit worthless and it's the salesmen that created the value mostly independently and should be able to keep it.

Don't forget that not only do companies lose their "IP" with outgoing workers, but they also get more free with incoming ones. Perhaps it balances out but with a net positive effect since effective skills get spread around the industry instead of being locked up whereever they were discovered.

I think this is part of a bigger argument about how much IP protection is enough to encourage innovation but not so much that it stifles the market. You seem to be advocating protecting every last little bit of knowledge but perhaps that's stifling for the economy overall even if it is more fair for individual members.

Even in the case of salesmen, a non-solicitation agreement takes care of that just as well as a non-compete does.

I don't buy for one second that anything not covered by trade secrets, patents, or nda ought to be protected. You bought the employees labor for a finite duration not the contents of their skull.

Intellectual property is a bit of a misnomer it has very little in common with property of the standard sort and the burden falls upon you to explain why we ought to create greater artificial scarcity for imaginary property.

"I don't buy for one second that anything not covered by trade secrets, patents, or nda ought to be protected. You bought the employees labor for a finite duration not the contents of their skull."

+ My point is nearly everything that you learn at a company could be considered a 'trade secret' - depending on the company or project.

In the example I gave, I listed a variety of situations in which minute operational skills and knowledge, all contribute to be 'key information' regarding the development of the product, and can essentially be 'trade secrets'.

Ergo - it would be nary difficult to work for a competitor and not give that information up.

An NDA would suffice in that case.

Not being able to work work in the same field for up to 2 years (non-compete) and not disclosing internal ip, processes, etc when you go work at another company (NDA) in the field are much different.

Preventing someone from working in a field and not disclosing or sharing secrets/ip are two different animals.

NDAs are useful and I use them myself when contractors work with us, but non-competes create a very master/slave type of relationship, ownership of someone's skill that they need to work.

Paid non-competes are something that isn't as bad but non paid non-competes are horrible for the little guy and really a form of ownership that really goes against 'pro-business' ideals for smaller companies trying to compete while seemingly being 'pro-business' for the company doling out non-competes (big fish).

Contractors can't be told where to work, how to work or times to work, why are we allowing companies to tell skilled workers what they can and can't work on after the contract is up aside from what is under NDA?

My first exposure to non-competes was from a guy I did some work for. He was a network firmware/driver guy back in the 80's/90's. Took a six month contract with a European company. After the contract ended his recruiter got him another gig. When the original company found out they threatened to sue him. Because they said he had signed a five year non-compete.

5 years lol no way is that enforceable

On the other hand, you work at a company for most of your professional life, and become an expert in a field you love. One day you are no longer employed for some reason, but due to non-compete there is no way to get a job you want, since your expertise is somewhat niche. So you are forced to build websites or sell coffee for two years. Or drop your life in US and work some other place.

If the person from your quantum computer example gets fired with non-compete, it would mean being forced out of he field with 100% certainty. Quite a leverage for a company.

In my opinion, there is still enough stuff out there benefiting corps over employees even if non-competes go away.

Well, the counter-example is that the tech industry in California completely collapsed because... oh, wait, we're doing OK.

According to other posts here, CA banned non competes some 150 years ago.

The post you were replying to was sarcastic. The point is that if non-competes really were essential to companies, you would expect to see that reflected in CA. Instead the most notable thing is CA has higher salaries.

Take the job and let them sue. Scotus won't enforce a noncompete.

Non-competes are successfully enforced (outside CA) all of the time. Just take a look at the tech press, there are quite a few articles about it.

Non-compete lawsuits are typically only worth it for VP level people who have strategic secrets. No one cares about or sues 99.9% of workers who go work somewhere else.

I agree that when it hits the news it's generally a lawsuit against a VP, but you have no idea how many times lawyers send nasty letters, which are pretty effective.

Yep, letters cost almost nothing to send. Almost all employees have nothing to worry about for one reason. The corp will not go ahead with a lawsuit because the employee will almost always have no money or assets to take. It's amazing how pathological corporate behavior becomes when one views it from the money perspective.

But there's a chilling effect. For lots of potential employers, the existence of a non-compete that might be litigated is a complete non-starter. I worked for a small company and I know for a fact we passed on at least one person who had a non-compete that was unlikely to be litigated but it just wasn't worth the risk.

Jimmy John's managed to enforce it on their employees for years http://m.huffpost.com/us/entry/7042112

Um... that story states that the clause was never actually enforced therefore there was no valid claim of harm.

Good point, that wasn't the best article for my point! There are no specific lawsuits fighting the non-compete, however in the years following that case several states decided that the harm actually is caused simply by making employees sign the non-compete, and the company no longer has one.

so go work for a company in CA

> But in a world of IP ... it's a different story.

If the employee violates the IP then sue him for that. No need for non-compete agreements. If you're worried the employee will steal your clients then you're not giving your clients a good deal at first place, and the employee shouldn't be prevented from working with your clients. This is a free market. Non compete agreements are completely anti-freedom of both enterprise and work.

Then the burden of proof should lie with the previous company, there shouldn't be any possibility of preemptive clause within the former contract. If it's clear corporate secrets were leaked then sue. If you don't want your employee go work somewhere else then compensate him, that's the problem here , most of the time there is no compensation.

It doesn't matter how much R&D was created. That's the role of patents to deal with that thing.

"It doesn't matter how much R&D was created. That's the role of patents to deal with that thing."

I'm beginning to think none of you have ever worked in companies that actually produce IP.

First off - that's not what patents are for. Patents protect publicly known information - not trade secrets. And they don't do it very well. There are very few things you can defend with a patent.

What companies are concerned with is 'trade secrets' and 'know how' - and it's a serious thing.

"Then the burden of proof should lie with the previous company, there shouldn't be any possibility of preemptive clause within the former contract."

If you work at DWAVE for 5 years and learn everything you know about Quantum Computing there - and go to Google to work on Quantum Computing - then there is basically a 100% chance that you are passing on 'know how' and 'trade secrets' - otherwise - Google would not hire you.

Your comments about customers etc. are irrelevant with respect to IP issues.

If you work for ABC corp and they make a 'sales automation tool' - and you go off and build your own 'sales automation tool' - then fine. It's not about IP or trade secrets. You can do as you like.

But for other types of things, no way. You work at Nuance on Speech recognition - then you leave and build a nearly identical speech recognition system? That's probably IP theft.

There would not be any technology if IP could not be protected in some reasonable way.

I'm not suggesting that many of these contracts are crazy - and that there can be absurd limitations and weird corner cases - of course it's very tricky - but companies deserve the right to protect their IP in some manner.

Companies protect their IP via NDAs and patents and such, not non-competes.

And yes, I have a lot of patents and trade-secrets to my name.

> If you work for ABC corp and they make a 'sales automation tool' - and you go off and build your own 'sales automation tool' - then fine. It's not about IP or trade secrets. You can do as you like.

Unless you have a noncompete clause. That's exactly why they're a problem. You can't develop your professional skills. When you leave, you have to start from scratch in a different industry.

"Unless you have a noncompete clause. That's exactly why they're a problem. You can't develop your professional skills. When you leave, you have to start from scratch in a different industry."

Buddy - I'm saying there should be no 'non compete' clause in that situation. Obviously - there's no basis for it because there is no IP involved. Which is a case of over-aggressive application of these protocols.

> If you work at DWAVE for 5 years and learn everything you know about Quantum Computing there - and go to Google to work on Quantum Computing - then there is basically a 100% chance that you are passing on 'know how' and 'trade secrets' - otherwise - Google would not hire you.

That isn't trade secrets, it's experience.

Exactly. The views on this are so twisted in US. People actualy believe that its the company giving away everything. Truth is if youve worked on quantum computers for five years youve generated so much of this know how. Youve invested ideas, energy, time - its you givin away knowledge not company.

Also, was this that employees first job? Certainly he gained experience somewhere else first. Why should the first company benefit from that? It's the circle of life.

"That isn't trade secrets, it's experience"

No.

100% false.

If that information is key to the nature and success of a product, then it's called 'know how' and it's both legally and rationally protectable.

You people need to grow up and grasp that fact that once you go to a company and they teach you what they have spent $100 Million dollars on developing, that you cannot walk across the street and spill the beans on 80% of the materiality of that R&D which happens to be such details.

There's clearly a gray area. Knowledge does get transferred when people move from company to company. If someone developed experience in, say, running retail marketing campaigns for millennials at company X (to remove this discussion from the technical domain) and they take a job at competing company Y, OF COURSE they're bringing over both know how and negative know how developed at their prior employer.

That said, it doesn't mean that it's either ethical or necessarily legal for them to go to company Y and immediately do a core dump of every marketing campaign they ran and what the results were. But there's a fuzzy line between doing that and saying "Oh, millennials really respond well to this sort of language, but be careful not to say this."

It's people like you that have made the White House address this problem.

All you care about is the profitability of the company, and you think forcing employees to sign away their ability to work in their field is an acceptable solution.

People are getting hired for 3-month contracts and then getting sued when they find a similar job a year later. People are getting laid off and then getting sued by the companies that laid them off for getting a job at a competitor.

Fuck that. The job market needs competition, not a focus on raw profits above all else.

If your employee leaves your company, joins your competitor, and then leaks your trade secrets, then sue them for that. Don't sue them for even getting a job at your competitor - that doesn't mean that they are leaking secrets.

And if you think that your employees are so untrustworthy that getting hired by a competitor is a guaranteed leak of trade secrets, then that probably explains why you are so terrified that they will leave you to find a new job. You're a terrible employer, and they would be better off with a different job.

But let's face it, you don't have any employees, because you aren't an employer. You're a "temporarily embarrassed" entrepreneur who is already convinced that someone will try to steal that million-dollar idea you haven't had yet. Well, I wouldn't work for you, nor should anyone else, so good luck with that idea once you have it.

I hope you only ever hire fresh graduates and not people with experience. Otherwise you're stealing someones trade secrets.

> I'm beginning to think none of you have ever worked in companies that actually produce IP.

All software companies produce intellectual property.

My company has IP, I guess I'll never get to work with HTML, CSS, and Javascript ever again if I leave.

> but companies deserve the right to protect their IP

Sure. What I have in my head isn't the companies IP though, it's my experience.

"IP" is often confused with "the collective experience of your employees". IP is physical artifacts such as code, drawings, patents etc. The memory of having written that code is not part of the IP, nor is the capability of doing it again in a fraction of the time.

"What I have in my head isn't the companies IP though, it's my experience."

Again - 100% false. A lot of 'what is in your head' is the IP of the company you worked for.

Clearly, you grasp this, because you people seem to accept that NDA's are valid.

So - that yo accept and 'NDA' is valid, means you accept that 'what is in your head' can be the property of the company.

These 'I'm paid for labour' arguments are naive. You are paid to create outcomes, and to keep information about the company private - indefinitely.

An NDA and a non-compete are not the same thing. What you are describing is an NDA. It is quite possible for someone to change jobs, even in the same industry, and still abide by an NDA.

> Again - 100% false. A lot of 'what is in your head' is the IP of the company you worked for.

I consider most of it "experience". How would you draw the line between what is "experience" and what is "IP"?

> you people seem to accept that NDA's are valid.

> 'NDA' is valid, means you accept that 'what is in your head' can be the property of the company

Well it rather means that I can't disclose things to certain people at certain times. I accept that e.g. for unreleased products and other secrets.

> to keep information about the company private - indefinitely.

Not sure what that means? If I work for ABC corp to develop over 10 years some advanced tech for ad targeting, and I have a non-compete that doesn't let me go to google for a year. For that full year they pay me full salary. That is the non-compete. I accept that (only with full salary). While at ABC, I had an NDA. That's cool.

After that year I can clean room implement something similar. I might have to avoid making the exact same system I did at ABC corp if there are IP issues such as patents. Note that this IP (patents) is not secret. I don't necessarily agree with software patents of most kinds however.

I develop the similar system at google in 1 year. That's what experience does: I take none of the dead ends I did at ABC corp. That's why google can pay me a load of money: I have experience. Is that experience in large part the SAME as ABC corps "IP"? yes. Of course. Do they "own" all of that experience? No. They still have their product. They own that. Google will have a product too, which they own. I wrote both.

One thing I suspect (in SW), the strongest the company wants to protect "their IP" the most BS it is usually

I've seen people talk with a straight face how they think their company invented the use of IFNDEF/DEFINE for C .h files

And parent comment only goes to show how there are cattle that supports barbecues

> give away ABC Corps. most valuable asset.

Maybe ABC corp was mistaken, and their most valuable asset was that employee and not just the model parameters he struggled for years to optimize?

I agree that non-competes can be inconvenient for some, depending on their business model or career plans, but I am not sure how they are anti-innovation or anti-worker. Is there some evidence that they reduce overall productivity, or any other quantifiable metric?

I am not particularly in favor of or against non-competes as a whole, (though I would be reluctant to sign one,) but they strike me as less invasive than other marketplace restrictions (such as government regulations).

Anything that stands in the way of a worker finding and securing their best employment, in terms of both productivity and play, is both anti-competitive and anti-worker. The fact that noncompetes also prevent effective technology transfer between companies (which is how innovation happens) means they're also anti-innovation.

On the last point, see generally J. Doyne Farmer and John C. Holland who've done significant work on innovation and the processes by which it occurs. You'll find presentations from both on YouTube, as well as publications. Both are/were associated with the Santa Fe Institute (Holland died in 2015).

What if the prospective employee is presented with two offers:

1) No non-compete, long hours, and low salary

2) Non-compete agreement, short and flexible hours, and high salary

If this is a possible scenario, would the ban on non-competes be anti-worker?

Non-sequitur, unless banning non-competes would make the hours longer and less flexible or the salary lower on the second job.

You are assuming that no employer would ever pay more and be more flexible in exchange for a non-compete; I can imagine many employers in highly competitive industries who would.

You can imagine many things, but can you point to any evidence? Many people write blog postings about non-competes; I can't recall a single one where extra money was attached.

If you agree with my supposition that forcing an employee to choose the lower-paying job with bad hours would make the agreement anti-employee, we should look at evidence of whether non-competes are paid for by employers. If you disagree with my supposition, we should address that first, as the rest of the argument depends entirely on that.

My first piece of evidence for the proposition that employers pay for non-competes is that some of them prefer to hire employees with non-competes. Companies pay for everything they require of employees, as all unnecessary conditions reduce their options (for employees), and the only reason they ever offer money is to increase their options (from 0-1 or 100-200). In addition, it is very common for employers to value non-competes as assets (for accounting purposes). There are many other points in favor of the idea that companies do pay for non-competes, but we can start here.

Sorry, I don't agree with how you approach the entire problem. Labor law exists mainly because there's information asymmetry between companies and employees. You seem to be presuming that there's a free market for labor; that's not the case when there's information asymmetry. Your "evidence" falls apart when there's information asymmetry.

I think it is well known that there is information asymmetry in every transaction/deal/agreement involving more than one individual; saying that there is information asymmetry proves nothing. There is a highly regulated market for employees, and for employers. I didn't provide any evidence at all; I just asked if you agreed that in certain situations, it was possible for a non-compete ban to be anti-employee.

You said "My first piece of evidence" and now "I didn't provide any evidence at all". Given all the downvotes you've gotten, I recommend that you sharpen your debating tactics. You'll probably get better engagement that way.

Ah I'm sorry, I got confused thinking that we had gone back to my comment on taneq's last parent of this branch.

I attribute the downvotes to the unpopularity of non-complete clauses on HN. In addition to that, most of the libertarian and right-leaning users seem to be in North America, so I can count on less sympathy from ~4-12 GMT. It is also possible that my writing has gotten substantially worse in the last few hours, but it seems unlikely that I am being more rude or unfair than I normally am.

Mostly you're getting downvoted because you want to make legal policy based on what you suppose or imagine, rather than what you can demonstrate actually happens.

It can't be anti employee. Employers don't pay more for employees with non competes they pay less. In the case of the fictional employees you mentioned previously both employers would have faced a more competitive market for employees resulting in higher wages.

The non compete is nearly entirely valuable in that it it depresses wages. In reality its entirely likely that between firm A and firm B neither has a whole lot of special sauce non competes mostly serve to keep each other from competing for employees thus driving up wages.

Lack of wage growth (and accompanying erosion of quality of life) is already a major issue.

Why would you suggest that the employee pay a cost for accepting a fair workers agreement (no non-compete clause)? At least suggest that salaries be raised for people on non-competes.

The value the employee is generating through this IP is always going to be considerably (orders of magnitude) larger than whatever their salary is - the company can afford to pay them more.

The fact that employers value non competes as assets tells you that a) decreased turnover saves money b) employees who can't as easily leave require smaller/fewer incentives to stay

In fact its trivial to show that non competes result in depressed wages. It in fact shows you the exact opposite of what you intend to show. Non competes are valued as assets as it enables employers to pay employees LESS than in a free market.

You're raising the spectre of artificially nonfungible conditions, and ignoring power differentials between employers and employees, as well as game theory leading to non-optimal equilibria.

I don't understand what you mean when you say that I am "raising the spectre of artificially nonfungible conditions"; I described a possible situation, and asked whether you agreed that it was possible that non-compete bans could be 'anti-employee' per your definitions.

I agree that I am ignoring many things, as this is a limited discussion, and I am only addressing the impact of a law on a single employee, and its ethical ramifications.

Its possible in theory for employers to offer additional pay to work in conditions wherein the employee will be slowly poisoned where such additional pay is cheaper than proper safety equipment. Its even possible that the employer will find people dumb/ignorant enough to take this it doesn't mean its reasonable economically for the society to allow this sort of transaction.

Your earlier scenario made no sense as their would be no reason to suspect that the 2 employers respective pay and conditions were related you have just presented it as such. Imagine the law were changed tomorrow? Would the high paying non compete using employer suddenly start paying smaller wages? Would they have any employees tomorrow if they did? A freer labor market would be MORE competitive not less there is no reason to suspect that they wouldn't have to pay more not less to retain the same talent.

First, you're moving goalposts (the initial question was about how or why noncompetes are anti-worker, anti-competitive, and/or anti-innovative), and doing so without acknowledging the point. Chalk it up to my own history of arguing on the intartubes, but I find that tedious and generally a Bad Sign of things to come.

Secondly: my second point answers my first.

Markets don't manifest in individual transactions, they manifest as the emergent behaviour of multiple transactions. As others have noted, setting bounds to what can be traded away has proven necessary, empirically, to avoid winding up in a highly non-optimal equilibrium point.

If you're interested in ethical ramifications, I recommend two excellent works on the topic: A Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations.

Even that treatment is unsatisfactory as it neglects considerations of short-term vs. long-term trade-offs.

Your example is contrived in that it essentially poses a Sophie's Choice: give up condition of long-term viability A or because of my superior position in establishing and enforcing terms, give up condition of long-term viability B.

The optimum condition would be for no artificial constraint on A or B imposed by the employer.

I know this, when I get a non-compete it makes me not want to work on that project.

It is like a reverse market regulation against workers that are bringing the productivity and skills to the company.

Company: "Hey come here and build us this thing that makes us capable in this area, and when you are done you can't go on building things for other people". It almost seems like a fatal attraction or overly obsessed/attached owner/girlfriend.

Non-competes are a kick in the nuts really to put it bluntly. You'll know the feeling when you get one. It is closer to a company trying to own a skilled worker rather than a partnership.

You are speaking to emotions, which means I have no way of addressing your concerns, but I will try to highlight why I do not share your conclusions:

>"makes me not want"

I do not want to agree to many terms, so I do not agree to them; this does not make me want to ban those terms.

>"It is like a reverse market regulation"

Non-competes are 'like' any other business agreement to me. In any case, I am not sure what a 'reverse market regulation' is.

>"seems like a fatal attraction or overly obsessed/attached owner/girlfriend"

If you were analogizing an employer/employee relationship to a sexual one, they would seem most similar to a pimp or john; I do not think this is a useful analogy.

>"are a kick in the nuts... You'll know the feeling"

Many agreements feel unpleasant; I dislike any deal which obligates me to pay a large sum of money. This is interesting, but not very important to anyone else.

The way I look at a job is you get paid three ways.

1. Money.

2. Skills and Knowledge.

3. Career Contacts.

With non-competes a company is trying to screw you out of #2 and 3.

If you think non-compete agreements 'screw you out of #2 and 3", but still want the job (probably) because it is your best chance to get #1, it seems that you are being paid 1 in exchange for 2 and 3. The non-compete ban simply blinds you to the opportunity of selling 2 and 3.

That is how it should work in theory, but not how it works in practice. In practice companies can use their better understanding of the true value/cost of non-competes to exploit workers. If there exists a large pool of workers who are willing to sign non-competes because they are not well informed about them, than in order to get a job you will have to sign a non-compete (or move to CA).

As a counterpoint, it allows companies to give you a higher salary in exchange for #2 and 3. Or alternatively, if non-competes are the norm, it would allow a business to provide lower salaries for the incentive of no non-compete clause.

The argument whether to ban non-competes should be rooted in the practical applications of the clause. Highly skilled, in-demand workers have the power and financial safety to negotiate a non-compete clause.

The question is when the power dynamic between employer and employee is heavily skewed yowards the employer, can they abuse this imbalance to force non-competes as a market equilibrium.

For example, for a person struggling financially, the slightly higher salary may be a short-term requirement, while the non-compete ruins their long-term prospects.

iff it's a higher salary in exchange for #2 and 3

i suspect the employer / (healthcareinsurer if in US) imbalance is really the core issue.

In medical research ethics, informed consent acknowledges the imbalance. I think e.g. CA unenforcement of non-compete does a similar job.

(I am also a worker bee and benefit from non-enforcement, so take my input for the electrons they're based on.)

I'd be ok with #2 and #3 if the company would continue to pay the employee for the full duration of the non-compete.

The issue is, as you mentioned, the employer does have an unfair negotiating advantage. Most employees don't have the luxury of paying lawyers (or the knowledge that this is something they should do) to look at every non-compete offer and explain the contract. Having just gone through the process, lawyers are very expensive and time consuming. Talking to people about it reveals that most people don't really understand the issue either, believing wrongly that non-competes are not enforceable. Many companies also try to hide non-competes until after you have accepted the job offer. Companies in contrast have a much easier time hiring a lawyer, as they can offer a standard non-compete to each of their potential hires. So this is an area where it makes sense for the government to step in and protect workers.

Or the non-compete allows them to keep your salary lower because you have fewer options of places to work.

That is the right answer.

If a particular situation like non-competes is a net negative for society as a whole I don't see why we should bother to allow them.

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