I go back and forth on that. It seems like the free market ideal would be to allow them and if people didn't like them they wouldn't sign them. No one telling anyone what to do.
It certainly hasn't panned out that way though.
The idea is well known for hundreds of years, but here's a particularly salient quote for your line of thinking.
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"In so far as the reduction of costs of production and distribution thus achieved is reflected in reduced prices, society as a whole ultimately benefits from the use of standard contracts… The use of contracts has, however, another aspect which has become increasingly important. Standard contracts are typically used by enterprises with strong bargaining power. The weaker party, in need of the goods or services, is frequently not in a position to shop around for better terms, either because the author of the standard contract has a monopoly (natural or artificial) or because all competitors use the same clauses. His contractual intention is but a subjection more or less voluntary to terms dictated by the stronger party, terms whose consequences are often understood only in a vague way, if at all."
F Kessler, ‘Contracts of Adhesion--Some thoughts about Freedom of Contract’
In your opinion, is there a reason why something like a union couldn't be used to negate or modify non-compete clauses?
I think part of me just laments the fact that previous generations took a much bigger risk to form unions and modern generations have largely let it fall to the wayside.
> I think part of me just laments the fact that previous generations took a much bigger risk to form unions and modern generations have largely let it fall to the wayside.
I agree, and it's frustrating not just here but in the political realm as well. I think the Greatest Generation came back from the war and took hold of, and created instutitions: universities, the FDA, the CDC, the FAA, the MacArthur Foundation (just a random thing that came to mind), and importantly unions that protected workers rights and living standards. In the political realm I recently volunteered as a poll worker - it was a ton of fun, truth be told albeit a long day. But many people, friends, family, etc. thought it was a bit weird. We can't have nice things if we don't take care of them or do the hard work of democracy (or unionization, or maintaining valuable institutions) if we don't actually do it.
I'm not sure where this apathy and angst crept in, but I bet suburbanization and social media helped create and subsequently accelerate it to the point where we have some serious problems that need to be addressed.
This is interesting. Can you expand on the how you think this changed the overall sentiment of civic responsibility?
I sure hope there is parking at the protest
Basically non-compete negatives for the worker don't outweigh the costs & downsides of forming a union -for just this issue-. Forming a union, negotiating, membership, etc all have transaction costs. Also unions come in a bundle with negative effects too (corruption, forced to go along with decisions where you are in the minority opinion, etc).
So if there was a super light weight union that only focused on non compete, then maybe it could level bargaining power. But since unions have a cost and come with downsides, it's not used in practice today.
Especially since health care is tied to employment.
It's a privileged position if you can 'just say no' to a company that has non compete clauses - the majority of workers cannot.
My issue (and probably yours) is the way non-competes get handled by employers * Every non-compete I've signed has been sprung on me while filing out paperwork on my first day. What am I supposed to? Walk out and be unemployed while I look for a new job? * What do I actually get for a non-compete clause? Judges routinely rule that continued employment is enough consideration for near-anything including non-competes. But if some companies don't have non-competes, to me that isn't true consideration. Me signing a non-compete that isn't worded in this-for-that like standard contract clauses should be should be treated as a gift on my part by the courts that can be revoked * Many states have restrictions on non-competes but most non-competes for national companies are boilerplate and often too broad. Combine this with a mandatory arbitration agreement and employers are doing an end-run around state labor laws either through arbitration or just strong arming employees
I don't think that's the free market ideal. Let's switch away from employers vs. employees and ask, "Would an ideal free market allow companies to collude to fix prices? Would an ideal free market allow consortiums of companies to set up exclusivity contracts with vendors to block competition from entering the market? Would an ideal free market allow companies with profits in a monopoly to run other businesses at a steep loss to prevent competition?"
"Freedom from regulations" is a very thorny problem, it rarely leads to what people imagine are "free" markets.
I'd argue that falls way short of being useful and still screws over employees.
People switch jobs because they get better offers, and being forced to not only forego better offers but also get stuck with the same income while your offers get taken away from you hardly seems something that's in the worker's interests. In fact, it looks an awful lot like plain old unemployment benefits.
If you get a written offer from company B while working for company A under a non-compete, A must either:
- Allow you to leave unopposed
- Keep you in your current role by negotiating a more attractive offer
- Pay the value of offer B to put you on gardening leave for the non-compete period or 12 months, whichever is longer, and also compensate B for their recruitment costs
Would never happen, but it would be amusing to watch CEOs pitch a fit about it on Twitter.
But I don't think it requires paying the employee during the non-compete time.
> No one telling anyone what to do.
Sounds like a good way to get mafia.
I’ve grown to learn that arguments on labour markets and free market ideals tend to be very simplistic and, knowingly or not, always boil down to victim blaming.
When we’ve unemployed and actively looking for a job, if we have bills to pay and our budget is tight, our goal is to get a source of income as soon as possible. Consequently, we are vulnerable for unscrupulous conditions, such as non-competes. This does not mean that the job market finds them acceptable or encourages them. It just means employees that push these abusive conditions upon their new hires are abusing their dominant position to exploit workers, specially those in vulnerable positions.
This only works with a robust social safety net where a worker can have no job and still be ok. Otherwise you're usually going to be choosing the lesser of several evils when it comes to employment contracts.
It's hard to be a true free market libertarian when the initial conditions aren't really that free...
But none of that matters when most people still don't understand profit vs economic profit.
I'm not saying these things are necessarily good or bad. Just saying that most laws around income, taxes, and land have their roots in feudalism. And of course the ruling class still make themselves well to do off of the hard work of their subjects, just not to the same degree as kings. And yes, I know, people today have "choices" via voting. Even if those choices are between a shit sandwich and a shit sandwich without the bread.
Nonsense. Contributing back to society doesn't even register as a concern when your employer can force you to not have any alternative to work for him under his term, and apply harsh penalties to you and your loved ones if you step out of line. These nonsensical anarchist tropes only come in play to pull the focus away from the one-sided social arrangement between employers and employees in the US which his highly exploitative and outright resembles feudalism.
How is what I said "nonsense"? Do you not see that if the government decides to zone your land as conservation so you can't build on it that is one sided? Or if they use eminent domain. Even if it's in the best interest of society it's certainly one sided for the affected individual. And if they decide not to comply, you can bet the punishments will be much harsher than a non-compete.
You see, in this example society and company can be largely interchangeable - a group of people imposing something on an individual. Yeah, sure, most of the time society is acting in everyone's best interest. However, you have to remember that isn't always the case, such as with salvery or segregation. There are still injustices today.
If you reread my original comment, I never said those activities were good or bad, merely that many of our laws have their historic roots in feudalism. In many cases, those activies can be applied to either good or bad ends. There are examples of eminent domain being abused, and others which have provided benefits to society and generously compensated the owners. The important tie in to feudalism is that in either case the government is the one who owns the land while the "owner" holds the title of deed. You can hold the land as long as you abide by the rule of the government. Violate that rule (not paying taxes, use it for committing criminal activity, violate zoning) and they can take that land back, fine you, imprison you, etc.
I think non-competes for workers should be banned. But I'm just saying there are other more feudalistic examples (good or bad) that exist.
I dunno, they seem pretty spot on for the US.
In the US, "free market" generally means one of two things... 1 - a fictional market with no externalities and perfect information symmetry. Ayn Rand fans think it's real, but it only exists in an ECON-101 textbook.
2 - code for "rules for thee, not for me" as said by the billionaire class. Or, really anything that keeps them rich and the rest of us beholden to them for basic life necessities.
Edit - I prefer a phrase like "functioning market" to "free markets". Or maybe "fair market"? Not sure. The current labor market in the US is dysfunctional, at least when considering the share of increased productivity seen by the working classes (vs business owners).
Edit2 - changed "perfect information asymmetry" to "perfect information symmetry"
We should especially work on reducing information asymmetry. Big examples are salary negotiation and US healthcare. There we have parties (employers, hospitals, insurances ) that have almost all information and then the employees/patients that have almost no information. The old rule is that whoever has the least information in a negotiation will lose.
In short, we have quasi state-sanctioned hegemons that have undue negotiating power.
There are two solutions: nerf the barriers or buff the workers through more targeted regulation. There's no single regulatory body that can do the former, so the only option left is the latter.
But, if the problem is the much smaller/simpler "remove barriers to job changes", this is a pretty significant change in policy. Not as significant as divorcing medical coverage from employment, but still pretty big.
FTFY. I believe that is what you meant to see or
> perfect, no information asymmetry
I've long been a proponent that capitalism is not just about the economy but is instead a larger force more akin to feudalism.