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.
But I don't think it requires paying the employee during the non-compete time.
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.
> 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.