Obama takes aim at workers’ non-compete agreements | Hacker News Reader

Obama takes aim at workers’ non-compete agreements

thehill.com

83 pointshackuser32 comments

Looks like a dupe of https://news.ycombinator.com/item?id=12793501

This would be a game changer. My fiance works in a non-technical role for an online media company and her non-compete clause is basically every other online media company in the NYC area. I don't understand how a company can have the authority to limit someone like this for 2 years after working there.

> I don't understand how a company can have the authority to limit someone like this for 2 years after working there.

It's almost like the system in the US favours business over individuals. Na, that can't be it.

Silicon Valley has shown us that this doesn't necessarily really help businesses. It's an irrational fear-based scarcity-mentality behavior that actually harms businesses by ruining their talent ecosystems. You want employees to jump around and take on a variety of roles to gain experience and connections.

If most companies don't have non-competes that is better for everyone indeed. But there is no incentive for companies to be the only one not having non-competes. If you see employee mobility as the shared resource it is a tragedy of the commons. I think it would be better to mostly abolish noncompetes around the world as is already done in California. However as GitLab we have them in our contracts since it is in the interest of the company. It is a bit of a paradox.

Me either and I live in the UK.

In a previous job there was one in my contract (idiot boss put it in after he found a contract online) not realising that while a restrictive covenant can be enforced it is under very strict conditions (basically stopping you from buggering off and taking all the employers customers with you and some others).

Guy was a dick and told me he'd enforce the covenant (we didn't end it well, they where deeply scuzzy), I just laughed and said "I will see you in court then".

I was leaving to start my own company, not working with any of his former customers, not poaching any of his other staff (wouldn't have wanted them) and in a completely different industry so literally no overlap except we'd both be building things for the web.

I had my new company solicitor send him a letter basically saying "f* off and die" in legalese and he went away, last I heard he was bankrupt again (third time).

They can't in Europe unless they pay you. This is known as "right to work" and is drastically different from the american concept of "right to work" (which means that you can't be fired for not joining a union).

This is incorrect as it does not apply to all of Europe and even where it does apply usually doesn't require full pay. There are a variety of regulations listed here that limit non-compete clauses as many (most?) US states do, but not as much as California.

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

2 years, wow! I'm in washington state, every tech company has a standard 1 year noncompete, but it's almost never used. I have considered trying to push this with my state leg. There's absolutely no reason we can't switch to the california style system here, and everywhere.

I suspect a lot of these do not hold up in court. In fact, I believe NY is very favorable to the employee in overly broad non-compete agreements.

The problem is that a low level employee doesn't have the money to fight something like this. The simple fact that they can be litigated is enough.

Would a company spend money to enforce it? With non poaches, worst thing i've seen was a threatening note from a lawyer. No one wants to spend the money to take it court.

Usually my answer is no. I sign them and then, personally, complete disregard them because I think it's highly unlikely a company would enforce it on a low level employee like myself. The fact that they could try is usually enough to scare smaller employers away from even trying though.

Most sentiment seems to be that they "would never hold up in court". Every once now and then a case does come up though http://arstechnica.com/tech-policy/2014/07/amazon-sues-ex-em...

I know at least one corporate attorney that says flipping burgers would be a breach of your non-compete as far as he's concerned, i.e. "we reserve the right to intimidate you"

it's probably worth testing the enforceability of that contract or the willingness of that media company to sue. Do they have a history of going after former employees? Does your fiance have really specific and special skills?

"which would prohibit companies from requiring non-compete agreements for employees who make less than $15 an hour or $31,200 annually."

A step in the right direction but not enough. It needs to address all non-executive employees.

Or at least require real consideration that takes into account the possibility of extended unemployment. Like a mandatory ~75% of full compensation for the duration of the agreement or securing equivalent employment, whichever comes first.

I think non-competes should only be legal if the controlling entity pays the affected person's full salary for the period of the non-compete. As far as I'm concerned, if you want to control what a worker does you need to pay the worker for the privilege. And prepared to bet if such a thing was the law there would be significantly fewer non-competes in place.

And yes, am aware that once you get far enough into the management structure this can be negotiated. I just want it to be the default arrangement for everyone.

Has anyone seen a non-compete enforced?

I know plenty of engineers (not of the software kind, though) that quit to work at competitors, but when there are three companies in the world that make electron scanning microscopes or whatnot, it's practically impossible not to.

Enforcing a non-compete seems like it would be an uphill battle.

Absolutely. Several of my colleagues and friends have run into non-compete issues moving from big companies to other big companies.

One high profile case was Mark Papermaster's move from IBM to Apple: http://fortune.com/2009/01/27/ibm-settles-papermaster-to-joi...

I've seen attempts made to enforce it. We call it the nuclear option because for small companies, we are talking mutually assured destruction do to lawyer fees -- and virtually guarantees the former employee will go bankrupt. And at least in my town, word gets around that you are hostile to your employees, meaning hiring grinds to a immediate halt. If you are a consulting company...good luck with the next contract. No one will want to work for you or with you, and multiple current employees will quit on principle.

At least that is what I saw happen at a former company I was with. All of this was in "Right to Work" state that invalidates non-competes anyway.

Even when they're not enforced and not expected to be enforced, they can still cause problems for someone at a big company trying to be hired by a small company. At a former small employer, we basically wouldn't touch anyone with a non-compete if there was the slightest risk.

It happens in trading fairly regularly.

Yep. Even in states like Illinois where NCAs are non-enforceable, they can still complicate hiring decisions. I've heard of a few cases where companies (particularly in trading) will choose not to hire someone with a NCA because of the risk/time/effort involved in dealing with it.

NCA's used to be largely nonenforceable in IL. The advice I've received is that was changed by court precedent in recent years.

Did I read this correctly?

"which would prohibit companies from requiring non-compete agreements for employees who make less than $15 an hour or $31,200 annually."

Yes. This is basically aimed at a handful(?) of especially ridiculous cases of minimum wage service workers having to sign non-competes.

ADDED: In other words, at the risk of being cynical, I suspect that this is mostly political grandstanding. I'm guessing that none of these have ever been enforced. And, whatever one's stand on non-competes generally, it would really be hard to defend the practice in this case with a straight face.

They have been enforced, against of all things sandwich shop workers. Those are mostly just to scare low income workers from leaving their job.

Honestly this should cover a wider reach of people (6 figure salaries and below). Some of these non-complete agreements are so full of legalese its hard to determine the scope of them.

Seems like the right direction. The current setup protects the "status-quo" and it is never a good idea to "protect" the status-quo.

"which would prohibit companies from requiring non-compete agreements for employees who make less than $15 an hour or $31,200 annually."

Great. So the guy who leaves Dunkin' Donuts can go work at Starbucks? Awesome.

What kind of BS is that? What kind of secret IP, or valuable knowledge does a low-wage employee has that is worth protecting with a non-compete?

A fair number of low wage jobs use noncompetes, notionally to protect trade secrets that line staff need access to in order to execute job duties. It's probably most often pretextual in such jobs, but that's a good reason for policy to particularly disfavor the use of noncompetes there.

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