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Comment by slymon99 | Hacker News Reader

> If companies actually paid employees not to compete they would be able to keep them

Why is this true? If someone is making $200k and leaving to make $350k, an employer may well be able to afford the $100k for 6 months to prevent them from immediately handing over IP, but not be able to match the $350k their new employer is offering.

> So, it's conceivable that an ex-employee could receive 6 months severance in trade for a non-compete of that length, but I doubt it's very popular.

It's quite popular in finance. Also, it's not a one time severance, its paid as a standard paycheck. A firm might "release" someone from their non compete while it is still active (basically saying it's no longer active and we are no longer paying you).

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> Why is this true? If someone is making $200k and leaving to make $350k, an employer may well be able to afford the $100k for 6 months to prevent them from immediately handing over IP, but not be able to match the $350k their new employer is offering.

Sorry, I worded that poorly. I meant companies could keep the ability to impose non-competes if they originally compensated employees who were let go.

I know it gets muddled when it comes to employees moving around for increased pay, but non-competes aren't supposed to be a mechanism for holding down salaries. They're only intended to protect vital corporate secrets that, if they were released, would be so costly to the company that they'd risk bankruptcy. The value of those secrets would likely be enough that many competitors would be hesitant to hire those employees because they might fear opening themselves up to future litigation for patent infringement or IP or whatnot.

The fact that many HR departments apply them to every single rank and file employee and don't explicitly define what constitutes a direct competitor or what explicit activities/information are protected by the NC is why they're a pretty useless legal tool in most circumstances.

And there are a ton of other reasons people change companies as well.

>an employer may well be able to afford the $100k for 6 months to prevent them from immediately handing over IP

Presumably there are other restrictions to just handing over IP but at least some of the reasoning for non-competes is that you can't really restrict the transfer of a lot of know-how even if they don't share corporate strategy decks.

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