Hacker News Reader

> Despite this, almost all the company that I worked for in France had non-applicable non-competes agreement in their contract.

Legal intimidation. There should be a law against this, like "If a company is notified that part of the contract they wrote is illegal, and they keep knowingly pushing the illegal version, they get fined. And they have to send updated versions with the illegal clauses stricken to everyone that signed the old version."

Nope, prison sentences for lawyers/HR. This is the only thing people give a shit about. When I was working in finance nobody gave a shit about fines, the only thing people gave a shit about was the prison sentences potentially handed to people for fucking up AML.

You can't ask an employee to do something that could put them in prison, but you can absolutely ask an employee to do something that risks the company to be fined.

Punishments for lawyers, sure, but I think for HR is a bit harsh. Lawyers should hold responsibility for contracts, and if HR are sending contract without lawyers involver, senior/c-suite should be responsible for allowing such a process.

> nobody gave a shit about fines

Much like doctors (I imagine) fines are inseparable from insurance, and or capital held/made from some activity. Fines covered by the money you made doing whatever you did are symbolic - they need to ramp up each time or they become meaningless.

> You can't ask an employee to do something that could put them in prison

Yes you can. If you think of a company as a collective, prison is an easy way to encourage scapegoating.

I think a better way is license suspension. Break some trading law? You are no longer allowed to trade, all trading business now non-profitable. Required to supply some information proving you aren't up to no good? 30 days to provide it or your business license is suspended, all new business is illegal until resolved.

target business activity and it's harder to do BAU in the face of penalties.

Just fine the company equivalent to one years income for deliberately breaking the law

The problem with that is a company can have many parts - fining the entire company for one dept will discourage large corporations. They'll just restructure and push all the risk to 3rd-party/contactors.

Another notable penalty option in finance (though I don't know how strong a disincentive it is in practice) is "You, personally, will be barred from working in the industry." Disbarring lawyers who do things that they know won't hold up in court seems like an interesting policy option here.

Also, one complexity is that you want to phrase it in a way that respects the power differential. It is basically expected in the adversarial system that you raise all the arguments you think might work, and one potential way this plan could rot is "Public defenders get disbarred/imprisoned for making good-faith arguments that ended up not convincing a judge."

That's why I phrased it as only taking effect after a legally-valid notification/warning (or maybe a couple). That way honest mistakes or ignorance of the law doesn't get you in trouble, and penalties can slowly escalate. There's little harm in the occasional illegal clause slipping through, after all - it's the norm that we want to change.

You don’t need the threat of prison sentences for lawyers. All you need is the threat of disbarment. Lawyers will absolutely refuse to do anything that risks them being disbarred.

IANAL, but i think its very similar in canada (even pre the new ontario law). Non-competes are more a threat to hang over workers head than actually legally binding. I think the big benefit of the new law is it removes the threat of a non compete which is present regardless of how legally enforcible they might be.

Again, ianal

The compensation aspect is known as garden leave in the UK (probably elsewhere too), although you'll only find it in certain industries or at certain positions in the org.

In a previous job (Belgium), I had a non-compete clause, correctly written except that the "compensation" part was missing. To my understanding, when leaving, I could either:

- claim the clause null and work wherever I wanted

- follow the clause obligations and ask for half of my salary for the 3 years of non-compete

Moreover, when quitting, if they did not explicitly waive the clause, I could also ask for those 3 years of compensation... but they did not forget that when I left ;(

> - There has to be a financial compensation.

This is very common in finance, the issue often is that in finance you'll often have a low salary that is made up for by a large bonus and capital gains from investing the hedge fund you work for.

So when it comes time for your garden leave the company can just keep paying your salary and not your prorated "total comp" which is often many multiples of your salary for the 6-12 month period you sit out.

Same in Sweden. I have found employment contracts to have such a clause, and for it to be very wide ranging, but the law limits how it can be enforced. To enforce it in court, the employer has to:

- have a specific reason about why you can't work for the new company - you can't just "non-compete" working for another company in an industry, it has to be that you had access to specific know-how that your old employer wants to keep secret from your new employer.

- have the non-compete time-limited, according to how long the know-how is relevant for.

- offer financial compensation (apparently normally the difference between the salary they would have got if there was no non-compete, and the one they did end up getting at another company)

My understanding is that it sometimes happens for people higher-up in the org-chart, and doesn't really happen so much at the individual contributor level. (I'd be really interested to hear other interpretations, anecdotes or case law though!)

Some management, some sales people, some consultants (where there can be a "don't go work for a client you have been recently placed at, for N months after leaving" clause). Mostly, I have seen it done through gardening leave, though.

But, as I understand it (but, then, I have NO legal training), if the no-compete is baked into your employment contract, it is null and void after your employment is over. To actually be valid, it needs to be a separate contract. I would double- and triple-check that before relying on it, though.

It's similar in Denmark. I basically got three months pay in compensation when I changed jobs while under a non-compete - which ironically incentivizes finding a new job.

In Spain is the same, but the financial compensation has to be a significant part of salary, around >30% minimum. I've gotten out of some NC's because the extra compensation wasn't fully detailed or wasn't enough.

Well as you said, the clauses that go over the law are simply thrown away by courts, so I happily sign - it's their problem they don't know their rights.

What constitutes financial compensation? Can they just claim it's included in the salary?

Edit: Cool! Thanks all.

It has to be a financial compensation during the period covered by the non-compete. I think it also has to match your salary (otherwise it would be easy to exploit), but I'm not 100% sure.

No, it has to be paid after the work contract ends, either in one go or monthly. From what I could read the amount must be "reasonable": between 1/3 and 2/3 of the salary depending on how wide the non-compete is (https://www.village-justice.com/articles/montant-contreparti...)

This is hard to say and I am not a lawyer. As I understand, the non-competes financial compensation has to be given when the contract end, therefore, it cannot be included in the salary.