NLRB acting general counsel rescinds non-compete labor policy
natlawreview.com
natlawreview.com
https://www.nlrbedge.com/p/acting-general-counsel-rescinds-l...
IMO noncompete clauses have no place in a free flowing market.
/s
/s
Company even tried using the state he was living in versus the state the company was registered with because the ladder had more strict non-compete causes and the former recently pass laws against non-compete.
Sorry but a person's lively hood should not be revoked because they left their former employer that treated them like shit.
Of course it equivalent to a SLAP suit and nothing of value came of it. It cost both parties loss of income. Game theory was a loose loose outcome resolution. The case did help other leave the company with impunity and no court case because of the loss.
Lucky his next employer fitted the bill if he stayed on for four years.
I thought only California bans non competes. Washington almost did, but then their leaders took bribes from the tech companies to exclude higher earners.
https://www.mmmlaw.com/news-resources/minnesota-becomes-yet-...
North Dakota and Oklahoma as well, according to this map:
https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=3737&C...
When non-competes are allowed they are limited to 18 months, and if you get laid off they are void unless the employer continues to pay your base salary during the duration of the non-compete.
This seems like a good and sensible thing. Most other employment law issues are regulated at the state level. If banning noncompetes was popular enough to get passed by the federal government, surely there are at least 20 or so states that would want to ban them locally.
If the suggestion is "anything shy of complete chattel slavery", people get worried.
Two of those justices currently sit on the Supreme Court.
It failed.
If you think the US completely banned slavery, or that slavery is unpopular, you’re misinformed.
Want to keep your employees, compete in the market.
this is just flat-out not true. look at the NLRB [0] and OSHA [1] for the two most obvious examples of the federal government regulating employment conditions.
there is certainly lots of employment regulation that also happens at the state and local level, but why is that an argument in favor of not doing federal regulation?
eg, if I'm working in North Dakota and get injured on the job, then yeah the state government will adjudicate my worker's comp claim, and generally speaking the feds don't need to get involved.
however, if the company I work for in ND requires me to sign a non-compete contract that supposedly applies in all 50 states, and might prevent me from moving to South Dakota or another state - how is that not a concern of the federal government? this is interstate commerce, which the constitution very explicitly gives the federal government power to regulate.
0: https://en.wikipedia.org/wiki/National_Labor_Relations_Board
1: https://en.wikipedia.org/wiki/Occupational_Safety_and_Health...
My point is that while many like these changes, others definitely didn’t expect it to go this far. So let’s not act like most Americans actually want this.
I see a lot of people acting as if the aims of Trump are some big departure. In fact they have been mainstream R goals for a long time.
"Republican Pressure to Disband OSHA Rises Amid Sweeping Trump Orders": https://www.inc.com/kit-eaton/republican-pressure-to-disband...
"NLRB Lacks Quorum to Exercise its Authority Following President Trump’s Removal of Member; The President Also Dismissed NLRB General Counsel Abruzzo": https://www.stinson.com/newsroom-publications-nlrb-lacks-quo...
Non-competes are anti-competitive nonsense, which is why the oligarchs love them.
"freedom of contract"
"work makes you free"
It's a playbook to misdirect with language like that.
maybe they'd know with execs where their occupation is public, but for line employees it just seems like a scare tactic. I kind of doubt they're going to drop thousands of dollars on a lawsuit because some associate SWE hops from amazon to microsoft
I had been doing all the selling for my tech startup, this, on top of handling all product engineering, manufacturing and, well, everything else. It was time to get a sales person to take-on that role.
I put it out there that I was looking for someone. I interviewed many. Most with a good deal of experience in the industry. One of my resellers called and asked if I would consider hiring his outgoing marketing guy. Zero experience in sales. He also lacked in-depth domain knowledge. Tabula rasa, if you will.
Well, I did. And I also paid him above average as well as commission and benefits.
What followed was approximately a year of intense training to get him up to speed on not just our products, but the science and technology of the relevant domain. We sold to very technical people, mostly engineers, so you had to be know what you were talking about.
A bit over six months after "graduating" he took a job as sales manager with one of my largest competitors. He probably got a nice boost in pay. He used me --quite literally, me, because I was the only one who could train him-- to learn and go from his resume being utterly irrelevant for the position, to being valuable enough to hire.
This wasn't about money. He was making double what our engineers were making. He told me why he did it: He did not want to work for a startup. He wanted to work for an established company.
That absolutely fried my brain. Of course, there was no non-compete. The investment in time and money to get this person up to speed easily exceeded a million dollars at the time. Him leaving also caused damage across more than one front. First, I had to replace him. That took time and money. Second, he took everything I taught him and everything he knew about us and used it against us in his new role working for a competitor. I don't know if I can quantify the damage twenty years later.
The consequence of that one event was simple: I have never again hired someone that required a significant amount of training. Nope. Not doing that shit again. They can go learn somewhere else. Because there are people out there who will gladly use you to move a few steps up the ladder and not have any sense of loyalty or gratitude at all. In a self-funded startup you sometimes do things like pay salaries using credit cards when things are rough (which I have done a couple of time). In other words, this can be very personal.
Again, I do not personally like non-competes and I would not advise anyone to sign one. In fact, I recently did exactly this with my son, who got an offer from --oddly enough-- a YC-funded company who wanted him to sign a non-compete. I told him "fuck no".
However, as I said, I fully understand why some businesses feel there's a need for it. My solution is to never again be "Professor Martin" (a term that stuck in my head when a friend warned me not to do that). My guess is that lots of companies avoid hiring inexperienced <insert role> because the cost to train isn't trivial and being used as a stepping stone in this way is more costly than just the raw financial cost of training.
If your training is so valuable, why aren't you charging for it? I'm sure your competition would be willing to pay lot's of money to have their people upskilled from 0.
It is obvious from your simplistic comment that you need to acquire a much broader perspective before being able to interject with value in a conversation on this topic.
It is clear from your original comment that you both missed the point and likely do not understand the matter enough to, well, make the comment you made.
Go hire someone who isn't qualified. Spend a year and a million dollars training them. Then see them go work for your competitor. Then, maybe then, you could have an opinion worth listening to.
Here's another one: Go use credit cards to pay salaries and take out a second mortgage to keep your business afloat during an economic depression (both of which I had to do in 2008) and then come back and see if you understand.
To simplify it for you, one of the things I said was that non-competes MIGHT (not DO, MIGHT) create a feedback mechanism that cause companies to avoid hiring people who need to be trained, for the simple reason that the training is valuable in time and money and the last thing they want is for those employees to jump ship as soon as they have gone through such training.
It's a simple matter of survival: If you are a small company or a startup, it would be suicidal. You are not in business to train people for your competitors or the industry. That's just a simple fact. You do that too many times and you are out of business.
And, again, to be clear, I don't like non-competes and advise everyone who asks not to sign them (if they live somewhere where they might be legal). It's a bad idea. However, once again, I understand why a small to medium organization might thing them to be essential when hiring people who need to be trained for the job.
If only employee retention were not an inscrutable black box. What are the poor job-creators to do in the face of ungrateful, capricious employees who can at anytime for unfathomable reasons like "more remuneration", "recognition", or "better working conditions". Perhaps one day someone in the social sciences will do research in this uncharted corner of human psychology, and 50 years later, employers will know what to do.
I've seen colleagues uproot their lives by moving across the country and be laid off before they got their 3rd paycheck. I have worked under a toxic manager brought in at a startup for the express purpose of increasing attrition, amd afterwards looked at his linked in an realized that was his speciality: a contractor brought in to shake engineering teams to see what falls. The power imbalance, and rate of abuse between employers and employees are clear to me.
Most employees are not evil, incompetent or undesirable. And the same is true of most companies. As is always the case in the real world, a few bad players cause all the problems.
A simple example of this are police forces. The overwhelming majority of people are good, law-abiding citizens and most of us never interact with police in the context of criminal matters. Policing and many of the laws they have to enforce, exist because of a very small number of criminals and idiots that fuck it up for everyone else.
It's the same in the employer-employee relationship. There are a small number of shit companies and a small percentage of shit employees, and that's where friction happens. That's where laws and some of what is being discussed in this threat is a necessity.
Another example from personal experience. We manufactured hardware products. In this context, we had very expensive manufacturing equipment and tools. For example, we had a whole series of specialized crimping hand tools for various connectors. These tools range in cost from $400 to $1,200.
I cannot tell you how many tools were stolen by our own employees over time --tens of thousands of dollars.
Once again, it's a few jerks that cause the problems. You could trust most people with your life, all it takes is one or two idiots to change things. And change they did. We had to institute a sign-out system. We setup surveillance cameras in the assembly areas. In some cases we had to buy full kits of tools, assign them to individual workers and make them sign for them (meaning, they are financially responsible if anything goes missing).
So yes, a few jerks, both companies and employees, are responsible for loads of shit nobody likes, including, to go back on topic, such things as non-compete requirements.
I don't like it. I just happen to understand why these things exist because I have held many of these cats by the tail. A reference to my favorite saying: "A man holding a cat by the tail learns something he can learn in no other way" by Mark Twain.
One should never presume to understand anything until one has the experience to grab onto that tail and hold on for dear life. It is very easy to have opinions from an external perspective, in fact, everyone has them and they are all sure they are right.
Think about the risks that the employees take for the company (they are not just time risks). They have to relocate themselves, and even worse move their entire family and kids away from their friends & schools, sell their houses often at loss / break leases, and then join your venture with just at will employment contract, which means that at any-time you can just tell them to go f themselves.
So no your complaint is not calibrated. Sorry.
Well, you are wrong.
I'll start with your last comment. Go read my post again and understand the degree of the example given. This was an extreme case. This individual required a little over a year of training and knew virtually nothing about the job coming in.
Everyone needs to learn something at every new job, of course. In many ways that's what makes it fun. There's a distinction between learning something and having to be trained for a year. And that distinction is huge both in terms of the time and money invested on that person.
> Spending time to train an employee is an expected cost for the employers.
Of course.
> It is not that they steal from you corporate secrets that the competitors would leverage against you.
Not sure where this comes from, I didn't say this.
> It is a minimal time risk that the employer takes, to make productive an employee for them.
The key word there is "minimal". Once again, in my case, we invested a year and a serious amount of money training the person. It was a mistake to hire him. Plain and simple.
That's the point that readers seem to miss. Let me try to do a better job spelling it out:
Without a contract that obligates an employee to stay for a specific length of time, there's a limit function on how much you can invest on that employee in the short term due to the risk of the employee leaving your company for a competitor.
Would you buy a used car that required constant work to fix it for a year and yet the engine isn't guaranteed to last more than a year? Likely not. Same thing.
Because of this, companies will generally avoid hiring "newbies" unless they have to or have a value proposition that's sexy enough that they will likely stay. For example, SpaceX is full of 25-ish year old engineers who are truly excited to work there. They come to the company with very little --if any-- experience. They need to learn everything. Some leave. The vast majority stay. Lots of them pull the ejection cord at the 5-year vesting point.
So, it is a training ground, yet, there's a reasonable assurance that perhaps 80% of the newbies will stay. There are only so many sexy companies like that. Most small to medium businesses do not carry that clout.
In that context, one can understand why an non-compete with a limited term can make sense in the eyes of an employer. Before I am verbally eviscerated, I have already said, multiple times, that I don't like them and do not advise anyone to accept one. I am simply saying that I understand at least one scenario under which they might make sense.
> Think about the risks that the employees take for the company (they are not just time risks). They have to relocate themselves, and even worse move their entire family and kids away from their friends & schools, sell their houses often at loss / break leases, and then join your venture with just at will employment contract, which means that at any-time you can just tell them to go f themselves.
Once again, these are things I did not say.
The employee I was referring to had to drive 30 minutes. In fact, our office was closer to him than his prior job, which was one hour away.
The vast majority of jobs do not require such extreme measures. In the case of most small to medium businesses, they cannot afford to trade in the relocation markets. That's an entirely different dynamic and one that I am very sensitive to.
I have someone right now who has to move his family from Arizona to join us. We are renting a house for him and his family for an entire year and covering all related expenses. I have insisted that they do not sell their home until they are sure this move will make sense to them long term. Being in CA, there is no non-compete, and I am perfectly fine with it because I am not hiring a newbie that will require a massive amount of training before they can add value to the organization.
There are degrees.
The point you and others missed is the idea that there are scenarios under which non-compete agreements could find some justification. I will generalize one to be an apprenticeship position. The end result of not having this as a legal tool is that there are entire classes of businesses who have to --out of self-preservation-- take the position of "let someone else train them". That's just reality, like it or not.
Next time you read job postings where you say "Damn! I know I can do that job, but they want 5 years of experience and I only have 2!" think about the possibility that they are thinking "We cannot spend the time or money to train someone". If, on the other hand, they had the legal ability to offer newbies the ability to learn on the job in exchange for committing to a minimum and reasonable term of employment, the job specification might change.
If before, why not find another job? Is anyone forcing you to accept a job with noncompete?
If after, they should be banned.
If every job has a noncompete, the alternative option is to starve.
Jobs with noncompete clauses now include things like fast food counter work (https://thecounter.org/biden-targeting-non-compete-agreement...).
Alternative is to start your own company and don't use noncompete.
Ignoring all the other details, if someone waves the magic wand and makes it legal you can use it, when someone waves the magic wand and it's not legal, then the agreement is just void at that point. There's no retroactive consequences.
Even if they don't intend to go through the trouble to enforce them, they have a chilling effect.
We need stronger enforcement all around
Unions, without the strong backing of government, seem to be the way to go.
I don't think enough business people understand that having a well-defined legal framework for labor disputes is beneficial for their own safety and security, unless their expectation is that government ought to intervene on behalf of business but never on behalf of labor.
Joking aside a lot of LLM's won't even let you ask critical questions about unions. They may have become more lenient in recent versions, but I know early llama and chatgpt models wouldn't answer questions about decertification of unions, or whether they could taxed. You could never get an LLM to say anything critical of a union just by using system prompts.
I'm highly skeptical of the idea there are a bunch of conservative bots running around, you would, at a minimum, have to retrain an existing model to get them to argue in favor of most right-wing topics. You certainly couldn't do it with system prompts.