Ex-workers at Temu owner PDD suffer surveillance and ruin over non-competes | Hacker News Reader

Ex-workers at Temu owner PDD suffer surveillance and ruin over non-competes

ft.com

> A few months after starting a new job, in November 2023, he received a summons for a Shanghai labour arbitration case. Pinduoduo had submitted video evidence of Yao walking in and out of a rival’s office for a week.

> Last month, the arbitrator ruled in Pinduoduo’s favour, ordering Yao to pay his former company damages, lawyers’ fees, and return the Rmb11,000 he had earned in gardening leave pay. Altogether he owes Pinduoduo Rmb438,000 ($61,000).

Wild.

I’m surprised people use temu at all. I was surprised to see it air ads on the Super Bowl.

I’m not surprised most Americans or really any people use it.

Most people stop thinking after they see a price. Quality and supply chain implications are ignored with willfulness.

It's not like shipping at the mall means that I'm going to get higher quality or a more ethical supply chain. There's plenty of very low quality $200 sweaters/shoes/belts/jeans/etc at established retailers. I'm not whattaboutism'ing -- it's just that people seem to criticize Temu far more than it earns.

If you can afford to shop exclusively at Patagonia, that's wonderful! But I often feel like the western brands are mad at Temu primarily for giving consumers back all the middle-man markups, so billionaires like Lawrence Stroll stop getting their cut when people buy from Temu instead of Ralph Lauren (and just keep the extra money that those owners are used to capturing).

Anything Chinese in the news gets pulled into the current zeitgeist of anti-China fear.

If that's also useful for undercutting competition or scoring some other political/economic points, you can pretty much count on it.

It is not anti-chinese fear that these companies are using literal slave labor. Visit r/fucknestle to see that same disgust for non-chinese companies. There is actually an amount of this disgust for clothing brands in general, as they often routinely end up employing literal slaves as well, however it is unfocused, as the non-transparency of supply chains purposely makes it hard to know who is or isn't using slave labor, and how much plausible deniability they have implemented.

Do we get calls to outlaw Nestlé every time it's campaign season? Hershey would love it.

Hating Nestlé is niche. Hating the Russians is partisan. Hating the Chinese is mainstream consensus.

Consider how confident you are in the slave labor accusation, for example. This was a thread about a non-compete dispute.

Apple used child slave labour. https://www.businessinsider.com/apple-knowingly-used-child-l...

What's your point? As the great philosophy show house of cards suggested: when the tits that big, everybody gets in line.

So all companies will use slave labour if it makes them more money. There is no moral high ground anywhere.

If I'm shopping at a retail store, even Walmart, there is a certain floor I expect to the quality of goods. If I move up to Target or a Ralph Lauren store that expectation goes up. Someone somewhere that cares about the brand has made some kind of attempt to vet the product. That's not always a guarantee of the best product but a brand that isn't in a death spiral has some incentive to protect their brand.

I've significantly reduced my spending on Amazon, do not plan on renewing Prime this year, and would never use Temu because there is just too high a chance of getting bottom of the barrel crap from a nonsensically named Chinese company that will shut down and restart with a new name after it becomes obvious they sell only garbage.

You get some companies like Anker that are rising above the crap but I don't have the time to learn about the few Chinese companies doing good by the consumers and don't want to have to spend hours vetting whether my tooth brush holder has lead or the brushes will tip over because it's not actually tall enough to properly hold a toothbrush. I'll just buy from Target.

If I'm going to roll the dice or know of a trustworthy brand from China I'll just use AliExpress.

>If I'm shopping at a retail store, even Walmart, there is a certain floor I expect to the quality of goods.

You also get to inspect things a bit before you buy them. My girlfriend tried Temu, I explained what she was likely going to get, she insisted that the price was so good "we would be losing money by not buying it", the order arrived (late) and was the quality I expected, she realized it wasn't worth it and deleted the app. If we went to Walmart and saw the same things for the same price, she wouldn't have even wanted to touch them. There's no guarantee a shirt you get from Walmart will last, but you at least know the fabric is thicker than toilet paper before you buy.

Temu has free returns and pays for return shipping.

They do, but it was clear being in a loop of ordering garbage and sending it back was not a good use of time.

I've ordered over 50 items from Temu and have generally been happy with the quality. There have been one or two complete duds, but I just write that off as you get what you pay for. Not worth sending anything back. The only things I still order from Amazon are consumables - coffee pods, vitamin gummies and cough syrup.

>has free returns

>pays for return shipping

They're the same picture.

In reality they told me keep their garbage and they’ll give me my money back. After an hour investment of my own time - of which has to be on their online chat website which you of course cannot close in the meantime.

No, I want you jerks to pay UPS to fly this crap back to you, but they won’t. We all need to standup against the infiltration of Chinese poisoned goods. Demand they take them back and your expense. The post service needs reform too, why is it cheaper to ship from China than ship across your own city? It’s ridiculous.

That was our experience as well, although it only took a few minutes (because we didn't try to argue with it?).

>The post service needs reform too, why is it cheaper to ship from China than ship across your own city?

This Planet Money episode talks about it (although from 2018): https://www.npr.org/sections/money/2018/08/01/634737852/epis...

You have WAY more confidence in Target/Walmart than I do. Most of it falls apart super fast. Even Christian Dior belts are made of some kind of “leather” that falls apart after a year.

> some kind of “leather” that falls apart after a year

It's vinyl and it's awful. That fake leather degrades really fast if you expose it to the sun. Thrift stores especially end up with a lot of second-hand products made of it already shedding. I'm not a huge fan of leather, but at least it lasts almost forever.

In Aus, target is considered middle-low tier but not bottom of the barrel, Ralph lauren appear to sell $800 sweaters.

Is American target substantially different from Australian target?

Middle-low sounds about right in the US too. Better than Walmart.

Target is the same, definitely not on the level of Ralph Lauren, but definitely a step above Walmart. OP referred to Ralph Lauren like its easy to find equally quality good on Temu.

Ralph Lauren does sell $800 sweaters, but in America most (not all though) of the "nice" brands have significantly diluted their quality, so in addition to the $800 sweaters, Ralph Lauren also sells "$150" sweaters which are "marked down" to $80 and are really not very good quality, you could roll the dice and maybe get something comparable on temu for like $15.

The brands don't really do this dilution in other countries yet, and temu is still a diceroll, but I broadly agree with the GP

What you're referring to has been a thing for a very long time and exist outside of the US.

The Nikes you get at a department store have always been terrible compared to what you get at Foot Locker for example. Nike won't even allow certain sneakers to be sold depending on the level they judge the store to be.

The Ralph Lauren flagship store in Tokyo or NYC will generally have a better selection than the department store. A Macy's in Chicago will have a far better selection of a brand than a Macy's in a mid tier suburb. In college, I went to a mall serving an extremely rural community and a major college, and nearly everything in the casual section of the department store was extremely cheap and camo.

Its just market segmentation.

Online, the clothing brands I buy from directly tend to be of the quality I expect. Buying a polo from Amazon will be just as much of a crap shoot as buying from Temu, but the online store will generally have the quality shirt you've been buying.

Are the bikes at both stores the same SKU and/or effectively the same style+model just with lower quality materials?

What’s this practice called?

Not the same. Literally different products.

Market segmentation

> If I'm shopping at a retail store, even Walmart, there is a certain floor I expect to the quality of goods.

I once got a badminton birdie from Walmart that, when hit with a racket, rather than bounce and fly off across the court, fell rather lazily to the ground.

The floor for Walmart is pretty darn low.

To be clear, I’m not just talking about temu. As you say, it’s a problem with fast fashion and many retailers. It’s a race to the bottom issue.

But it’s not a binary choice between “luxury” logos and sketchy random quality junk on temu and Amazon. Simple mindfulness when purchasing things would benefit everyone - including the person doing the buying.

> giving consumers back all the middle-man markups

Temu is often selling stuff to Americans at a loss, to be fair, and even that bleeding is staunched by their access to low-cost shipping agreements. But yeah, even if you did factor in those costs, the final product would still be a fair bit cheaper than the same version sold in US retail stores.

> Most people stop thinking after they see a price

The first time. Then they learn. Assuming the consumer is stupid is part of what downed Wish [1].

[1] https://ir.wish.com/news-releases/news-release-details/wish-...

It took them _years_ to get that bad. Remember, these kinds of business are short lived, yes, but you are only for the short while, not long term.

My girlfriend gets temu packages regularly. You get stuff that's unusable, but most of it is.. Fine. And the stuff that isn't was so cheap it's not worth bothering about refunds.

So that’s paying others to create garbage that takes resources to ship around, and was manufactured with bottom barrel labor and environment standards and also likely contains high levels of formaldehyde or other contaminants. And in many cases rips off American IP and undercuts places that aren’t cutting all the corners.

Yes it’s a “fine” if a few million Americans support that… no issues at all.

> I’m surprised people use temu at all. I was surprised to see it air ads on the Super Bowl.

Not surprised at all. The prices are too good to ignore for the average American. Amazon's quality is also a dumpster fire these days so there is no point paying higher prices.

Shareholder-extraction-driven companies like Amazon just cannot compete with market-capture-driven companies. Amazon NEEDS to keep prices high to return value to shareholders. Temu doesn't need to yet.

>>> Why surprised?

How is the average consumer supposed to know that Shanghai/chinese labor laws are this incredibly abusive. and isn't that the fault of the legal system over there? I don't think any profit seeking western company would ever think twice about abusing the legal system if it can profit from it: just look at the entire industry of patent litigation, ISPs, insurance quoting, the list goes on, etc!

As for cheap goods. I've ordered quite a bit from that platform. they have very very good return policy, i can assure you. You just need to be smart about only ordering things where quality isn't the highest concern. For example, garden labels. you can't mess those up. Electronics are a bit iffy. but irrigation supplies, i've had good luck with.

I mean its just superior to Amazon in every way?

you get the same trash you get at amazon for a lower price. Why pay Bezos the middleman cut? of course people should avoid both. if politicians put up blocks on either seller, they would have my vote.

PDD's strategy here is to get entry level workers in the door and have then sign a non-compete which would make it impossible for that person to survive if they left the company, once they are stuck there they work them to the bone with 996.

Needless to say this is so so fucked up but it's China so go figure.

Sadly, it's a fairly common practice all over Asia, and a major reason decent talent will attempt to move to opportunities abroad.

Techniques to constrain labor mobility are ever evolving.

https://www.cnet.com/tech/tech-industry/apple-google-others-...

  Apple, Google, Intel, and Adobe will shell out $415 million to put to rest an antipoaching civil lawsuit that accused the companies of conspiring not to hire each other's employees.

  ..Email exchanges among such top executives as late Apple co-founder and CEO Steve Jobs and former Google CEO and now executive chairman of Alphabet Eric Schmidt revealed how requests were made not to hire certain employees away from each other.

  One email exchange recounted how Jobs asked Schmidt to stop Google from trying to hire one of Apple's engineers. "I would be very pleased if your recruiting department would stop doing this," Jobs wrote to Schmidt on March 7, 2007.

  Schmidt then sent the request on, saying "I believe we have a policy of no recruiting from Apple and this is a direct inbound request. Can you get this stopped and let me know why this is happening? I will need to send a response back to Apple quickly so please let me know as soon as you can."

https://www.financialadvisoriq.com/c/2042553/239943/morgan_s...

  ..defecting FAs must choose a strategic and nuanced path — or otherwise face liabilities, Ichter warns. During their "garden leaves," he says, "they can only talk to the clients about the same thing they were talking about while they were employees of their old company. They cannot attempt to move the clients [or] solicit the clients" or they will risk triggering claims that they failed their duties of loyalty to their employe.. [but] ..retaining clients these days is not as hard as sometimes portrayed, since clients' personal loyalties frequently surpass their institutional ones

Not great but incomparable to the above poster.

A more comparable situation is H1Bs (where being able to transfer is not guaranteed) and other foreign workers whose residence status and that of their family is tied to their employer. I pity those engineers trapped at companies like Twitter/X.

Also foreign workers with limited English proficiency, serving large firms at arms length via contract agencies.

Lots of those employees have begun leaving to the home country for that reason.

Working as an H1B is fine for a couple years, but if you're looking at multi-decade long backlogs for a chance at naturalization, it makes sense just to return after leveling up enough, especially because you can demand EU level salaries in most of Asia after a couple YoE in the US.

Koreans, Japanese, and Taiwanese did this in the 90s and 2000s, Chinese in the 2000s and 2010s, and increasingly Indians post-pandemic.

Most Indian H1Bs and F1 OPTs I know at Twitter and FAANG (from NCG to seniorish Eng and PM) have made amends with eventually returning to India in 5 years or becoming a Canadian citizen and using the TN backdoor, just like how a lot of Chinese talent began seriously considering starting their own startup back in China in the 2010s.

-------------

This is actually one of the major pluses of American soft power - a lot of talent will get mis-bucketed in hierarchical systems in Asia (there are plenty of diamonds in the rough in Tier 2/3/4/5 programs) but they won't get placed at top programs.

As such, those kinds of people end up emigrating abroad and do fairly well in the US, or when they return to the old country.

If you treat foreign workers well, when a portion of them inevitabely return to their home country, they will have decently pro-American views.

Plenty of younger Chinese who returned to the Mainalnd from the US are strongly in favor of normalized relations, and even the elite like Xi Jingping still send their kids abroad (Xi's daughter is still in Cambridge MA for example and all his blood relatives in Australia)

In china an employer is required to pay something like 30% of your salary if it elects to enforce a non-compete. If the company doesn't pay you, then it's non-enforceable. Assuming you were at some decent compensation, this can actually be quite a bit of money. So if these workers took that pay cheque, they get to enjoy the timeoff during the non-compete and go party or start a family or whatever. The downside of the non-competes in China though is that because you are being paid to NOT work, if you start moonlighting or doing something sketchy the penalties are way more severe. I actually kind of like this approach to non-competes and it is in some ways better than how it works in many US states.

https://goglobalgeo.com/blog/non-compete-clauses-in-china-re...

The big problem with this system is not the penalties for breaking it, but the fact that it can sabotage you if you get hit too early in your career with a big gap. On the other hand, it gives you a nice opportunity to take a year or two off to start a family, spin up a new business or go back to school.

FTA:

“Yao’s agreement prohibited him from working for rivals for nine months, during which time he would receive Rmb3,700 ($513) a month. It was too little to live on, Yao said.”

Yeah, and it's very weird to bring a non-compete down on an entry level worker like this. Under what circumstances is it even worth it for PDD to spend the resources to enforce and monitor this kind of an agreement? I wonder if there's more to this story than the FTA?

Also keep in mind this guy could have easily gotten a different job while still collecting the non-compete pay at a non-rival company, even still doing programming. Something about it doesn't quite add up to me.

> Under what circumstances is it even worth it for PDD to spend the resources to enforce and monitor this kind of an agreement?

Do you know that the marginal cost for monitoring an extra ex-employee is that large? If they catch someone like him, it seems like it has to pay for itself.

30% of an entry level job is not a living wage, let alone a lot of money.

This guy was getting about $6k per year for his non compete, and has been sued for $60k. This has effectively destroyed the prospects of this guy’s entire life. He couldn’t mentally endure what they were demanding, and then they gave him a non living wage while simultaneously forbidding him from finding employment.

> they get to enjoy the timeoff during the non-compete and go party or start a family

On one hand, you have a guaranteed income for a few months, but I wouldn't be starting a family or partying if was living somewhere where I expected to make over 3x more. Here, rent alone is expected to a third of your income.

> 30% > Assuming you were at some decent compensation

Assuming your compensation was well above average and you lived quite frugally and well below your means.

There are countries in Europe where you can claim unemployment even if you left on your own and that would pay more so it doesn’t seem like a very good system at all. Of course nobody would really expect a “communist” country like China to not have garbage tier workers rights..

https://archive.is/qYnhE#selection-1583.0-1583.85

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