I firmly believe that prohibiting things is rarely a good idea.
Just require a business to keep paying an employee his salary and benefits during the non-compete. A business has a secrets to guard. An employee has a family to feed. All is fair.
Just require a business to keep paying an employee his salary and benefits during the non-compete. A business has a secrets to guard. An employee has a family to feed. All is fair.
It depends on how you frame the issue. Banning non-competes only prohibits courts from enforcing those terms of the contract. In other words, it removes an element of state coercion.
The rationale for state enforcement of contracts is to promote the operation of free trade. It's become quite clear that in the vast majority of situations, even as between savvy economic agents, non-competes substantially restrain the operation of free markets. They're a net loss. Why use state coercion to such an end?
Given the known facts, rather than add a bunch of exceptions limiting enforcement it's better to reverse the default rule--that is, switch from default enforceable to default unenforceable--and add affirmative exceptions for the particular situations where we know they work well. California has non-competes, they're just limited to a very small set of circumstances.
Or you could frame the enforcement of the non-compete as the government prohibiting people from freely using their labor.
I think it's not so bad that when Hal asks the government to give him the money that he says he was promised, the government just tells Hal he was a fool to expect anything from that promise. Or course that isn't a universal, there are things in contracts that absolutely should be honored, the point is that you figure out which ones as a society rather than blindly enforcing anything and everything.
Ultimately, this is not 'prohibiting' anything; this is just stepping out of the free market, which is a good thing.
For example, saying the government 'prohibits' non-competes in this arrangement is like saying the government 'prohibits' conversion to Christianity. However, there is no law stating that a person cannot sign a contract with his pastor saying he is now Christian and will remain so until he dies. That is perfectly within both of their rights. What they cannot do is ask the government to enforce that contract, but that doesn't mean it's prohibited... it just means it's legally useless, the way non-competes should be.
All that keeps these unenforceable contracts 'viable' is shame or large cultural organizations (like a church). For example, some professions start professional organizations that establish rules for members, and then the organization markets itself so that people know only to trust professionals belonging to that org (like realtors). If that org decided that there ought to be restrictions around how members conduct themselves with regards to competition and kicked out members who broke this taboo, then fine... have at it! But, the government is unnecessary ere.
I agree. Let's get rid of this prohibition of an employees ability to break these agreements for any reason at all.
Plus, there are real downsides to your approach. It puts the onus on the employee to collect from the employer, which is best-case arduous and worst-case more expensive than it's worth with most of the money going to a billboard lawfirm anyways.
Your approach might make sense in the mid six figures and up, but for low-wage or even low to mid middle class workers, outright nullification would be way more effective.
I don't think it will involve collections or anything like that. You just keep receiving your monthly paycheck.
No paycheck - no non-compete.
Anyway, isn't that just prohibiting a non compete without compensation for potentially lost income? I mean any law is arguably a prohibition from the right perspective.
You mean like prohibiting an employee from switching jobs?