Even janitors have noncompetes now
washingtonpost.com
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Worse yet, I asked my boss about the non-compete and she just shrugged and said she didnt know what it was for, but that HR must have put it there. I wandered over to HR and they confessed they did not know when this was added either but it must have been something the owner wanted.
The owner and I have shared a few beers together, so I tapped on his door to ask about it. After calming him down and reassuring him he wasnt about to lose me, he admitted the "non compete" was something his attorneys told him to add. They mentioned Google and Uber as examples. After a few confused questions, he agreed to call a meeting with the managers and his attorneys and figure out if we really do need a non-compete, or if the lawyers are just making work.
Lawyers should be persuaded by clients and peers to keep things as simple as fits the bill, not dropped entirely from the drafting of important contracts.
If you give either of them carte blanche, they will tend to create overly complex and expensive systems. It's not even malicious or self-serving (at least I'd like to think it's not), but more that their jobs revolve around "edge cases", and without something to reel them back they will try their hardest to cover them all.
I wonder if the software development adage of "good software is defined by what it does, great software is defined by what it doesn't do" applies to law?
This was probably for consistency across the country, since many of their employees are based at their California headquarters where all non-competes (except for a small edge case in the context of selling a company) are disallowed by law. The same law applies to Uber's California employees, which includes those at their HQ.
I don't know if they've subsequently added a non-compete for US employees outside of California, or if they have ever used one for their international employees, but I honestly doubt both.
I wouldn't be surprised if their contractors and vendors have worse legalese where the law allows, though.
Glad you followed up, interesting data point!
But you are right about "worse legalese": in 2017 I came back as a temp, and was asked to sign an agreement containing an clause asserting I was authorized to receive materials subject to ITAR. I pointed out that only Americans (citizens or permanent residents) are so authorized, and that as I was not American I could therefore not sign it. I proposed striking the offending assertion and was told that I could not start until I signed the unmodified agreement. Apparently every other UK TVC had signed this without objection.
Eventually, though contacts inside Google, I managed to get them to see sense and issue a version of the document I could sign, but this took several weeks. Mind-bogglingly, when I returned as a temp this year my start was again delayed for several weeks for exactly the same reason.
The ITAR thing sounds like a bureaucracy that simply doesn't know how to reliably fix a wording bug in this area.
I'm sure Google's FTE legalese has changed a bunch since 2007, though. Amusingly, back in 2006, they still included interns in the company retirement plan, including matching contributions; while I appreciated it, that's definitely outside the norm, and they've since dropped that. My guess is that they initially drafted the retirement plan legalese without thinking to exclude interns, and then followed their own rules until they got enough interns to make it worthwhile to revise those rules.
I once sat as a juror on a pretty nasty trial involving a contract where both parties disputed over the signature. We had to sit through days of testimony from professional handwriting forensics specialists over who they thought had signed a particular agreement. Was the signature valid, or was it forged?
In the end, it didn't matter. The two parties acted in such a way to form a different oral contract, and it was their actions which lead to the jury determining the outcome of the trial. The contract was a piece of the puzzle, but it's not the _only_ piece of the puzzle. One party acted in a way as to misrepresent what was in the written contract, and that was used to determine fault.
I had someone not pay me for work 10 years ago. I filed a lawsuit, and... got back 20 page document about all the reasons they said they didn't owe me.
One was we didn't have a written contract. Well, I'd signed their contract, and sent it back, but never got a countersigned copy, and they're claiming they never agreed to it.
Another was 'laches' - I waited too long. Work was done a bit in April, then I was away for a week, then wrapped up basically by end of May - maybe 6-7 weeks in total. No money in June, lies in July ("it's coming, I sent it, etc") and then I filed suit in August.
Another was I'd waived my right to payment because in an IM I told the guy I was working for that I could wait a bit until he got paid. They took that as I was waiving my right to ever be paid.
I have to go find all my paperwork and screenshots now because - 10 years later - my court date is set for Dec. I had dozens (hundreds?) of emails and IM screenshots acknowledging receipt of invoice, promising payment, saying work was done, final client approved, etc. Email threads about all the work over several weeks.
At no point during any of that working project was there any "whoah, what's the invoice for? who are you? why are you working on this project?" The totality of the working relationship was that I was working on something with the understanding that they would pay, and there are multiple assurances that they would, in fact, pay. Yes, lack of 'written contract' was one piece, but the totality of the picture will hopefully weigh in my favor (but I gotta find all my stuff and get to court now - it's in another state!).
FWIW, first invoice was submitted, and the 'contract' (which they didn't countersign) stated invoices would be paid within 3 weeks. Not unreasonable, and faster than some other places I've worked for. Problem was, the rest of the project was completed in the next 3 weeks. BIG lessons learned on this one.
The company filed against is no longer in business, so I'm not even sure what to do at this point. It was a small individual LLC, may not be anything to do, but he was so shitty about it - couldn't pay me, but screwed over multiple other contractors I found out about around the same time, I drove up to NYC and filed a lawsuit. I didn't think it would take an entire 10 years to get a court date.
I've had people say "you should have gone to small claims court!" Except, the claim exceeded small claims limit ($5k). Perhaps I could have rounded it down and tried for small claims, which supposedly is somewhat faster, but how do you know ahead of time this will take 10 years to even appear in court?
I just want to say that I'm super impressed that happened at all. Nice work!
HR drew up a new contract without the offending clause that very day.
Point being, if you don't like a bit in your contract, challenge it. They may just take it out to not have to start their hiring process over again. You have to be unafraid to lose the job, but losing the job is nothing compared to being sued over cripplingly onerous contract terms.
Its about decreasing agency of those with more useful skills but not much money to ensure more predictable returns for those with more money than skills.
- Non-competes - Forced arbitration - Non-disparagement / NDAs
If an offer includes a non-compete, it should also include appropriate restitution to the employee for the opportunity cost involved. This means paid garden leave and also extra compensation to help employees find their next job since their skills are likely to have degraded during the fallow period.
Forced arbitration is used to rob employees of their constitutional rights and I can't believe that the practice is legal.
Lastly, non-disparagement clauses and NDAs are overly broad. I'm not opposed to NDAs with limited scope but NDAs have become blanket weapons used to cover up evidence of illegal or immoral acts by employers. This is particularly problematic when combined with forced arbitration since it means that employees subject to wage theft (for instance) are unable to join a class action suit and verdicts rendered by the arbitration court can be kept secret.
i recently had a company try to have me sign a document claiming ownership of anything i create in the time i work for them; meaning the tenure
i asked for clarification and without flinching they asserted that, 'yes, that includes on your own time and your own hardware even in a field wholly disparate from the one the company was in'
i thanked the interviewer for having me in and explained that though i felt they seemed like a kind person the company they were representing was offensive and unethical
first time i ever ended an interview early
In days past, there would sometimes be clauses asserting ownership over all IP for rest of your life, till courts finally declared those too much, since they deprived people of their livelihoods.
Cute factoid: Dr. Seuss (Theodore Geisel) was an advertising copywriter. He went into children's books because that was all that was permitted under his employment contract.
I remember the first time I ended an interview early. I was 19. I applied to a food factory job. The general manager interviewed me, and then asked me a question "Are you married, son? We like to support families."
I said "That's an illegal question and you should know better. Good bye."
Non-competes and forced arbitration are the beginning of a new system of corporate feudalism. (Want to move? Too bad, you're stuck on the fief by law.)
What's that? Your lord wronged you? Well, appeal to the Duke and see what he says about it, forget what your peers think.
NDAs make it so that the ills and wrongs of society never see the light of day and so can't be appropriately considered by citizens at the ballot box. Kind of like it used to be a crime to speak ill of the king...Yay modern lèse-majesté.
The clauses attached to the Weinstein agreement signed by Perkins offer an insight into how egregious some NDAs can be. She was prohibited from even obtaining a copy of the agreement – she could only look at it supervised at a law firm’s office, a clause that also prevented MPs from acquiring the document. Ultimately she obtained the agreement in June through a personal data request. Its contents confirmed that she was banned from talking to a doctor, therapist or psychoanalyst about Weinstein’s alleged harassment unless they also signed an NDA and that she should not speak about the payment even if HMRC questioned her about it.
“If a therapist, for instance, broke the agreement, I would be held responsible for their disclosure. There were guns pointed from every angle,” said Perkins, who has since managed to rebuild her career as a successful associate producer.
Courts have routinely taken the position that "an employment contract cannot be used to deny a worker from his livelihood in the ordinary course of business".
The NC which are enforceable are generally very specific and usually cover things like trade secrets or proprietary data (ie. secret formulas, customer list, etc).
So you leaving your current job to work at another mechanic shop is entirely unenforceable, whereas you downloading the entire customer DB and shopping yourself around to other shops (with data in-hand) probably is enforceable.
Here is a handy chart that describes each states approach to the issue (note: the majority match up with what I wrote)
https://www.faircompetitionlaw.com/wp-content/uploads/2018/0...
adding "IANAL" has gotten just as out of hand. the vast majority of the population are not lawyers and therefore the vast majority of people on the internet are also not lawyers. so why do you insist on calling this out? to draw an analogy here, it's like lawyers adding non-competes to contracts. maybe we can stop adding IANAL to comments first. enough with the ass covering.
People are constantly saying things that are wrong about the law. Reminding ourselves of this and being humble about our knowledge (through the use of disclaimers) doesn't seem like a bad thing. Letting confident assertions stand does.
OTOH, I've worked in and am pretty familiar with a particular branch of market research/consulting firms in the IT industry. I've been told directly by employees and ex-employees of a couple of the largest firms that people who leave to start their own practices or go to competitors are routinely kept from doing so. I personally know people who have basically hung out "on the beach" for a year for this reason.
So, in that case, those people basically couldn't go to another firm and do the same thing as they had been doing.
ADDED: Although I actually agree that, for the most part, the harm of non-competes is in the chilling effects for both workers and potential employers because no one wants the uncertainty and risk. And there are enough lawsuits in many locales to give credibility to non-compete enforceability.
If I'm 95% likely to win but it will cost me $100k and two years of stress to find out, then I'm going to have to care a lot.
And are you willing to go to court and spend years and thousands upon thousands of dollars to not have that enforced against you?
Yes, they could file a frivolous lawsuit against you, but this is true no matter what is or isn't in your contract.
Most people would drop such a suit it seems.
Much like DNA, if you leave something around there's a chance a mutation might activate it.
Foxconn infamously took one of their employees to court for being a taxi driver and the case was quickly dismissed. And recent years all non competes cases in Taiwan are thrown out except for high level managers.
Somewhat amusingly, days after settling back in at my current employer I logged in to our PEO's interface and found myself staring at fresh employment agreement... with a nasty arbitration clause smack in the middle. Fortunately current employer was willing to stand up to their PEO and get it removed company wide.
Fucking lawyers man.
Right out of college, some guy wanted me to sign a NOLO contract that you'd use for hiring someone as a general contractor for your home. Walked away from that.
I almost bought some land where the developer set up a boilerplate HOA that restricted things like boats in a town where everyone has a boat... And my direct neighbor wasn't part of the HOA!
Letting people jump ship and start companies or find better jobs is way better for an industry's productivity than having a bunch of miserable workers faking it because there are legal barriers to finding another job.
That person who can't choose to make 12.5k in the short run will accept 25k instead forever.
If companies can't legally implement no poaching agreements to keep employees wages down I don't see why they should be able to do so with non competes.
This was still not perfect, since the non-salary compensation at finance firms is a non-trivial portion of total compensation, but in my mind should be the minimum required by law for a non-compete agreement.
Historically, we (governments) have tended to write laws that constrain what employers can require, especially of low wage workers, because of the extreme power imbalance. Hence the existence of laws on minimum wage, overtime, mandatory breaks, paid leave, etc.
If you count USA as anywhere then sure. My fiance is a janitor, if any company wanted to make non-compete clauses, she just wouldn't sign it. There is serious understaffing of janitors where I live, so if there was too much bullshit in her job, she would leave. And we see USA as pinnacle of freedom and job possibilities...
Then you utterly fail to support this thesis in any imaginable fashion. Most people can't survive on 25-50% of their current salary with current obligations.
Markets/relationships require information and agency to function efficiently.
It's damn near amazing that you presumably understand that consumer choice is essential for an efficient market for groceries and wrenches but you don't believe that contracts that interfere with employees choosing an optimal employer don't make for an inefficient labor market.
When you understand that ANY employer could maintain minimal turnover by paying a competitive wage/benefits just by the human nature of desiring stability it ought to be obvious that the only reason to desire a noncompete is so that you can offer less without losing employees.
I can think of exactly zero benefits to me, unless they’re paying at least 100% of my total expected income, including bonuses and other discretionary income.
I once worked at a consulting company (one of the big dot-com consulting companies) that put a clause in the contract that said no employee could leave to go work for any client of the company. That was fine when the company was small and had few clients, but when they became large it prevented us from leaving to go to any reasonably successful firm because almost all of them were clients. If anyone attempted this the company would reach out to the potential employer and warn them not to hire the person. The other company would then back down because they didn't want to jeopardize their business relationship with the consulting firm.
As the dot-com bubble burst and the consulting firm became a sinking ship they continued to enforce it. We had to wait for layoffs to be exempt from that clause.
It's not supposed to prevent the sandwich guy at Arby's from getting a job at Subway to earn an extra $2/hr. Were those kinds of contracts to be enforced consistently, it would bankrupt state courts and create a lot of confusion.
They asked me to sign a contract with a clause saying that I'd assign them any inventions I came up with in the course of my work, sign anything reasonably related to them pursuing patents for these inventions and grant them power of attorney to do so on my behalf if I didn't do so promptly. (There was a separate copyright clause that was itself reasonable).
I pointed out that the work wouldn't result in any inventions and that I couldn't possibly agree to sign future agreements or assign even limited power of attorney to them. They seemed genuinely confused at why I was objecting and wouldn't budge.
I maintain that our system is trending in a neofeufal direction, with corporations replacing the lords of old. A noncompete which effectively leaves you unemployed should you quit is not quite serfdom, but it’s getting pretty close.
While working on company #1, he wanted to bring me in on company #2. He told me the idea, which didn't interest me a whole lot, but there was a key issue with it, culturally speaking. I told him I wasn't sure how he would be able to scale up staff given that people may not want to spend their 40-45 hours/week working on "X". (I"m being purposefully ambiguous...)
His response? "For a paycheck, they will..."
Anyway, that defined his general management philosophy. It's pretty prevalent out there.
This is a guy who can't keep talent for more than a few months at a time... hasn't slowed him down.
I think that's what has impressed me most recently, in my consulting endeavors. The number of moneyed company owners who persist on a destructive chain of behavior in spite of how it hurts their own ambitions.
And yet, in cases like this, if you can succeed just enough, there's nothing stopping you from clamping down because you want to.
That sort of thing can come afterwards, but loyalty has to be earned.
so yes, he can, and no, it's not, IMO, on the more effective end of the scale.
saying that, in and of itself, is often a barometer of a shitty boss.
the good bosses might have a bit of that in them, but they have other values ahead of that statement that lead them to be better bosses, and IME, more successful in their given organizations.
I've heard the same thing in construction jobs, and retail, too. It's everywhere.
I would argue there's a rational economic reason (reducing competition for the labour pool so you can pay them less) but not a morally acceptable nor even free-market-compatible reason. It's major abuse, and it makes me furious that we're using Cushman & Wakefield for our property management.
We need to make employment contracts non-severable so that employers can't get away with this shit. Oh, you want to put in a probably non-enforceable or illegal clause into your contract? Well then the entire thing goes down the toilet when it's found to be invalid. Otherwise employers will keep putting blanket stuff in that they know will probably fail in court to chill their employees.
I agree, the direction seems that way in our new gilded age.
However, I'm not bullish on it being able to survive/thrive. There is just too much change happening. Feudal systems thrive in static environments, not frothy ones. With the rise of Africa in the later half of this century, climate change really starting to swing, the maturation/stagnation of the digital/surveillance economy, and the coming pandora's box of CRISPR-CAS9, the social/economic environment that is giving rise to this Neo-gilded age of corporate feudalism cannot stand for much longer. Life is going to be too 'fun' for the stodgy lords/CEOs.
Totally true.
When I read about stuff like this, increasing surveillance of employees or all the stuff the TSA is planning with face recognition it looks like there is trend that the regular citizen will be under tight control while the ruling class will live behind walls in gated communities where they will be exempt from that control.
interestingly, this item:
<snip snip>
In order to be valid, noncompetition agreements must meet the following criteria pursuant to ORS 653.295:
- The employee is exempt from minimum wage and overtime as a “white collar” employee (i.e., he or she fits into either the executive, administrative or professional exemption);
- At termination, the employee’s annual salary and commissions exceed the median family income for a family of four as determined by the U.S. Census Bureau;
- The employer has what is called a “protectable” interest. This means that the employee will have access to trade secrets or competitively sensitive confidential business or professional information, such as product development, product launch, marketing or sales plans and strategies;
- The agreement is entered into at the beginning of employment (or bona fide advancement), and the employer has provided a written notice to the employee - at least two weeks before employment begins - that a noncompetition agreement will be required; and
- The agreement is not effective for longer than 18 months from the date of the employee’s termination.
</snip snip>
As a comfort, at least the sandwich makers and delivery drivers aren't covered.
No.
Competition and Capitalism are literally antithetical. This is outlined better than I could ever explain in Zero To One by Peter Thiel, but in essence:
Capitalism is all about, including in its very name, the access to and deployment of Capital. Competition destroys Capital. In its most basic form, think of the airline industry. It's highly competitive, which forces airlines to run razer-thin margins and drop prices. This kills R&D, and while its great for consumers in the short-run, it can actually hurt consumers in the long run because it doesn't even matter if Delta would love to invest more R&D into more efficient planes, allowing them to make them roomier and cheaper; they can't, because they don't have the capital to spend on it.
In the worst case, companies abuse incumbent/monopolistic positions by sitting on their asses and doing nothing with the capital they bring in. That's why a market without competition gets a bad rep. But this isn't always the case, especially in the modern market where companies are deathly afraid of technological disruption.
Competition is necessary, but that doesn't make it a great thing. And it certainly is not a core component of capitalism; it's a core, necessary component of Free Markets.
There's no good reason for a maintenance, food service or custodial worker, or even most programmers (don't kid yourself about how novel the crap you work on is) couldn't work for two competing companies without a conflict of interests.
If two competitors could both outsource the service provided by the employee to the same entity without a conflict of interests then it shouldn't be subject to a non-compete.
NDAs for trade secrets and reasonable policies on use of company assets and time should be able to cover the edge cases.
https://web.archive.org/web/20181018173502/https://www.washi...
It makes me wonder, are these common scenarios, or is the author on a crusade and has found some rare instances of it happening that he is blowing out of proportion?
"Stadtluft macht frei" and the related "year and a day" are still German proverbs. Eric Hansen made similar assertions here (popular history, but sounds plausible): https://www.amazon.com/-/dp/3596173248/
I’d also only come across “a year and a day” as the pre-marriage trial period that a couple would spend together in the tradition of hand-fasting – and the old common law standard regarding attribution of cause of death. I was not aware that it also served as the length of time that escaped serfs would be legally freed if they managed to survive that long.
Well, value; in the classical feudal system the lowest classes would rarely have much money to flow anywhere, and their obligations were mostly in-kind in labor and produce, not monetary.
Yeah, capitalism globally fell to the mixed economy throughout the developed world, to the point that most modern references to “capitalism” refer to the mixed economy, not the original system named “capitalism”, because while people may not have been sold on the prescriptions of more radical alternatives like Communism, they broadly weren't satisfied with capitalism, either.
The subtext of this, that capitalism is bad (and perhaps socialism is better) is pretty disingenuous. The only reason non-competes work is because we don't have pure capitalism (I'm not arguing for that, it'd be bad, but) the government is stepping in and saying you have to follow the rules of this contract which are not in your best interest.
I think they may be arguing that pure capitalism would be like Mad Max - you just do what you want until the next powerful leather-clad CEO decides to change the rules and use you not as software engineer but as a blood bag.
The author kinda touches on it later in the article, but the only reason we have these contracts and they were deemed enforceable is because we wanted to avoid a breakdown where executives would steal all their company's secrets and then go to a competitor. Slightly amended regulation is necessary, not some sorta social uprising.
And here I'd just broken out my leather chaps.
In that case I totally agree with you. What was once a tool for a company to protect itself against someone with leverage is now a method to discourage and oppress those at a disadvantage.
One could contemplate a private mercenary force which enforces contracts but what actually distinguishes that from a government?
“Pure capitalism” is the exact system for which the name “capitalism” was coined, the dominant system in the developed West in he mid 19th century. It most certainly did not allow that.
What you are referring to isn't “pure capitalism” but “anarcho-capitalism”.
And, actually, nothing would be particularly binding based on agreement, as enforcement would be based on what the parties could pay enforcers to enforce, which would in practice depend on ability to pay enforcers, not on the text of documents or the evidence of whether the other party had agreed to them and violated the applicable terms.
Semantics aside, the point is that non-compete clauses in contracts are very much in line with capitalism, both in theory and in practice.
By "get go" do you mean time of signing or when you're leaving? And if the latter, what does that look like at the time you're leaving?
That's different than "totally". It's harder for a janitor, who might not have the means to fight back, to try and call that bluff.
Like you, I’m also not a lawyer, but I did engage the services of a firm when I left. My lawyer informed me in no uncertain terms that my noncompete agreement was enforceable and cited several cases where a) their firm took employers to court to have the agreements tossed and lost and b) unsuccessfully defended people who did what you did and were sued by their previous employer.
In general, “fuck off, sue me” usually isn’t a great legal strategy.
The point is that is is quite easy to get a job, and just not tell your previous employer.
And they don't want to waste time paying a lawyer, either.
You'll almost certainly get away with it, regardless of what your contract did or did not say.
As you say, under most circumstances most companies don't actually care even if they have some boilerplate non-compete clause. But some do, especially in places where close client relationships are important or where it's a senior person moving to a direct competitor.
You and I might know these clauses are unenforceable garbage, and we might be able to get a lawyer to send a nasty letter to the former company if they attempt to use it. However, that situation is not common for everyone, and unfortunately the most vulnerable in our society are the ones who get punished because of it.
It's not the employees who's actions are influenced. It's their potential other employers' actions that are influenced.