I'm interested to see how this hits finance firms – I know people who were forced to take a year off between jobs (although they were compensated the whole time). Always thought that would be a pretty sweet deal.
> With respect to garden leave agreements, as noted previously, commenters used the term “garden leave” to refer to a wide variety of agreements. The Commission declines to opine on how the definition of non-compete clause in § 910.1 would apply in every potential factual scenario. However, the Commission notes that an agreement whereby the worker is still employed and receiving the same total annual compensation and benefits on a pro rata basis would not be a non-compete clause under the definition, because such an agreement is not a post-employment restriction. Instead, the worker continues to be employed, even though the worker’s job duties or access to colleagues or the workplace may be significantly or entirely curtailed. Furthermore, where a worker does not meet a condition to earn a particular aspect of their expected compensation, like a prerequisite for a bonus, the Commission would still consider the arrangement “garden leave” that is not a non-compete clause under this final rule even if the employer did not pay the bonus or other expected compensation. Similarly, a severance agreement that imposes no restrictions on where the worker may work following the employment associated with the severance agreement is not a non-compete clause under § 910.1, because it does not impose a post-employment restriction.
If this survives the Supreme Court, wouldn't a company would have to put in your employment contract that you/they must give x months notice to end employment if they wanted to restrict you? Otherwise you could give one days notice and they wouldn't be able to put you on gardening leave.
It's less "end of at-will" and more "if you want effective non-competes, it's going to cost you".
I think you're right that negotiated gardening leave will happen but I can also see companies baking in the gardening leave at the start of employment (so no longer at will) as being cheaper.
Those are illegal in at-will states.
I worked at a hedge fund in NYC. I gave my 2 week notice. HR said that the employee contract that I signed when I joined stated a minimum of a 4 month notice period. This would have completely killed my next job which I already accepted.
I should have known this was in the employee agreement, but I didn't know they they would threaten lawyers on me if I didn't stay 3 months.
I have no idea why the recruiter was willing to put this in writing, and thankfully, I was able to find other work instead.
I know it's not a non-compete, but there are other ways that companies can illegally form cartels to suppress labor.
You passed on a juicy class action lawsuit.
It's also career limiting to be the person that sued their employer. I didn't have any monetary damages, as I was able to find alternatives.
The "class actions never make money for the plaintiffs" refrain is 99.8% true. The people who get a postcard mailer about their eligibility usually get shit. The 0.2% outlier are the people who put themselves at risk by providing the testimony that wins the case, and they're rewarded for it. And the blood-sucking lawyers of course.
I think everyone should make 2-3x the poverty level income (we can debate exact numbers), and everything after that is bonus. So long as the company pays a bonus most years it means in a bad year you have enough to live on and don't need to find a new job, while in a good year you have a nice bonus to buy nice toys.
In finance you make more money, but work more hours and have more stress per hour typically. Still probably a good deal, but it's not a Pareto efficient deal.
(These numbers are typical of finance industry compensation and non-compete terms.)
> In finance
If a company wants to pay someone not to work for a year, they're free to do that whenever they want. Maybe without noncompetes, they'll have to pay more to make it worth it for the guy being paid to sit around!
EDIT: Er, the FTC explicitly does not comment on garden leave:
> With respect to garden leave agreements, as noted previously, commenters used the term “garden leave” to refer to a wide variety of agreements. The Commission declines to opine on how the definition of non-compete clause in § 910.1 would apply in every potential factual scenario. However, the Commission notes that an agreement whereby the worker is still employed and receiving the same total annual compensation and benefits on a pro rata basis would not be a non-compete clause under the definition,350 because such an agreement is not a post-employment restriction. Instead, the worker continues to be employed, even though the worker’s job duties or access to colleagues or the workplace may be significantly or entirely curtailed. Furthermore, where a worker does not meet a condition to earn a particular aspect of their expected compensation, like a prerequisite for a bonus, the Commission would still consider the arrangement “garden leave” that is not a non-compete clause under this final rule even if the employer did not pay the bonus or other expected compensation. Similarly, a severance agreement that imposes no restrictions on where the worker may work following the employment associated with the severance agreement is not a non-compete clause under § 910.1, because it does not impose a post-employment restriction.
My guess is that garden leave will be offered, but in right-to-work states there will be no way to enforce that the employee remains employed.
For me, the full cost of my current employer’s health plan is about $1800/month, and a comparable plan from the healthcare exchange is $2200-3000, depending on the plan. So if I were to lose my job, it’d be significantly cheaper for me to use COBRA than get a plan from the exchange.
Yeah. Remember this when you go to vote in November. Elections matter.
Washington (Democrat led), I think, most recently passed a non compete ban for those under a certain salary, but I cannot think of any Republican led states that have advanced such legislation, or espoused views that they want to.
It falls in line with similar worker friendly legislation passed by Democrat led states such as longer family leave, paid sick and family leave, higher unemployment benefits, higher minimum wages and minimum salaries for exempt workers, eliminating non tipped minimum wages, and publishing of salary ranges on job listings.
Edit to respond to below:
Is it partisan in California? If anything, I would have thought the California non compete ban is the most un-partisan issue since it has been in place since 1872, so neither of today's parties would be credited with it.
> The vote on the final rule, which fell along party lines, with three Democratic commissioners voting in favor and the agency’s two Republicans voting against
https://www.forbes.com/sites/mariagraciasantillanalinares/20...
That's literally their job.
The same thing happened with Roe; it is not the job of the Supreme Court to enact public policy. That is for the legislature to do. If you talk to anyone in law, they will tell you that, regardless of their personal opinion on abortion, Roe is perceived as one of the worst court rulings ever because it was specifically designed to “legislate through the court”. Here we are in the same position again, with a non-legislative body enacting public policy; we don’t learn.
"Under this Act, as amended, the Commission is empowered, among other things, to (a) prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce; (b) seek monetary redress and other relief for conduct injurious to consumers; (c) prescribe rules defining with specificity acts or practices that are unfair or deceptive, and establishing requirements designed to prevent such acts or practices; (d) gather and compile information and conduct investigations relating to the organization, business, practices, and management of entities engaged in commerce; and (e) make reports and legislative recommendations to Congress and the public."
Noncompete acts are an unfair method of competition (see (a)), which Congress granted the FTC the power to define and restrict (see (c)). It is, quite literally, their job.