FTC adopts a comprehensive ban on new noncompetes with all workers | Hacker News Reader

FTC adopts a comprehensive ban on new noncompetes with all workers

ftc.gov

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Giant ongoing discussion:[0](834 points, 331 comments)

[0]: https://news.ycombinator.com/item?id=40136010

"Existing noncompetes with workers other than senior executives are not enforceable after the effective date."

Going forward, new no new non-competes are allowed, even for senior executives.

Isn’t that quite saying the opposite? Or are you clarifying something the article got wrong?

New non-competes will not exist for anyone, including senior executives. Existing non-competes will only exist for senior executives. Both statements are true.

From the article "For existing noncompetes, the final rule adopts a different approach for senior executives than for other workers. For senior executives, existing noncompetes can remain in force. Existing noncompetes with workers other than senior executives are not enforceable after the effective date."

Thanks

Yeah, it was meant to clarify the title, but it looks like the title got changed after I posted that.

Forgive my shortsighted thinking, but how does this lower healthcare costs? It was mentioned as a main point, but I'm not sure how banning noncompetes would impact that.

My best guess: if you want to switch jobs and you are under a non-compete, you have to wait for a period of time before starting a new job at a competitor (typically 6-12 months, fairly common in finance). During that in-between period while you are waiting for the non-compete to expire, you aren’t covered by health insurance. And not being covered by health insurance usually increases healthcare costs.

Incorrect, due to COBRA

https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/...

Do people actually sign up for COBRA? Last time I quit a job it was like $3000/month. I took my chances instead.

COBRA is simply the full price of the plan plus a small (~2%) premium. The “better” your coverage was while employed, the more expensive your COBRA plan payment would be because you’re paying for the whole thing.

Not quite, you pay a lot more because it's not deductible.

Only stupid people like me. I paid tens of thousands for cobra coverage. Never again.

Nearly ruined me

What’s your other option? Are equivalent plans on the health care marketplace any less expensive? Or, would you go without? The latter might work ok if you’re young, single, and don’t have much to lose. For a parent, with a mortgage, and a spouse, and whatever else, that’s a giant risk to take.

Employers don’t pay for COBRA, and employees rarely choose to do so.

COBRA is retroactive and you have up to 60 days to opt in, so for the people bridging a gap between 2 jobs it isn’t worth paying in advance. Having the paperwork ready in case you need it is enough.

COBRA is almost universally more expensive for individuals because they have to pay both their premium and whatever premium the company was paying.

The company was also paying its share of the premium with pre-tax dollars whereas the ex-employee has to make that share up with their post-tax dollars.

The cost of COBRA is whatever your plan's premium was plus an optional 2% administrative fee. So yeah, you're not getting your employer's subsidy but you're not paying two premiums.

That's only if the company chooses to continue paying your premiums, and I've never seen that after leaving a job.

I'm my experience, you'll pay 1.5-3x what you were paying while with the company.

Employer gets to pay with pre-tax dollars. The ex-employee does not. So, for most of us, that’s a ~30% increase in cost for the amount the employer previously covered.

Why do you claim that what I said was incorrect? I am well aware of COBRA, but have you seen how much it costs?

The previous job I quit a couple years ago, I actually checked the numbers to see how much it would cost me to keep. I think I would rather go without paying close to $2k/mo for a single person insurance. Doubly so, if i actually had to not work for a period of time.

Your claim:

  During that in-between period while you are waiting for the
  non-compete to expire, you aren’t covered by health insurance.

Is completely untrue. You have options for health insurance, including remaining on your existing plan via COBRA. In some states leaving your job may qualify you for an ACA plan. Forgoing health insurance is a choice, not a given.

Most people off work can’t afford COBRA because the full cost of US health care is so high. COBRA: Nice idea, but useless in practice.

I had the same question.

As best as I can figure it out, it's "cost to worker" not overall cost.

I -assume- it's based on the perception that employer pays for Healthcare, so from a worker perspective it's "free". You leave the job, but the non-comptete means you're unemployable, hence pay your own Healthcare, or insurance.

It presumes a fair bit. Firstly that non-competes mean "you can't work at all". It's also unclear if the calculation assumes you get your own insurance while unemployed or not.

Personally I'm against non-competes (and I say that as an employer that's had employees leave and open something in direct competition to us, AND take customers with them.) IMO they're outside my personal ethical boundaries. So I like the rule.

Yeah, that was a weird one. I could speculate but that claim feels enough like a non-sequitur that I would expect a justification in line even in a quick summary like this.

It sounds like noncompetes are fairly common between doctors and their practice groups. So if there’s a demand and a shortage those who can move can demand higher pay. Perhaps they think this will reduce compensation for MDs.

It mentions reduced spending on doctors. My thinking on the mechanism is that freeing doctors from noncompetes makes it easier for them to leave big practices and start small ones. Small practices have less bargaining power with insurance companies and will have to charge lower rates.

Big practices feel like patients should remain loyal to the practice, not the individual provider with which they have established a trusting relationship.

[dupe]

Discussion on official release: https://news.ycombinator.com/item?id=40136010

These have been illegal for ever in New Zealand, unless you (employer) pays for it

But nobody used to know that. They were routinely part of employment contracts, unenforceable, but it's what you believe that counts

Bad, mad, low life scum

Next step to level the playing field: eliminate patents.

Getting rid of non-competes is a matter of levelling the playing field in free market capitalism, no?

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