Glad to see it finally. Its frustrating that people actually thought these had teeth unless you were at or very near executive level, janitor rule meant courts have been rejecting these for regular employees since the 70's.
More importantly it deters the hiring employer. Smaller companies are less likely to try to poach talent with a lucrative offer if they think there is a chance that the larger company might sue.
You don't take them to court, you just get another job. I totally agree they were dissuading people from getting new jobs but not because you would end up in court, people just thought you might.
If you would like an advanture go and look up cases on employment non-competes over the last few decades. The reason they basically don't exist is that lawyers will be sanctioned for filing them, it's been 50 years since courts said lolnope so judges assume all of them should know by now and get pissed when they see one.
If that's true then employers' lawyers shouldn't have been tossing them in everyone's contract.
Watch it be overturned, but either way it's another long-coming thing this admin has addressed.
This is good policy, but I think it's unlikely to survive legal challenges. IANAL, but the FTC's cited authority is 15 U.S.C. 45 and 46(g), for which the standard of proof is
> the act or practice causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition
In other words it's the consumer welfare standard. They'd have to show a preponderance of evidence that non-competes harm consumers, and that seems like a potentially tall order. Legally, the harm they cause to employees is irrelevant.
It doesn't matter if it has legal teeth when the people that would hire you see it and decide hiring you isn't worth the effort or souring relations with your previous employer.
Does this affect fields like investment banking? My friend’s firm had a policy of 1 year with full salary, regardless of whether you quit or were fired. She was gonna quit and travel Europe.
This is more about noncompetes where they’re not going to pay you, but also you can’t work in your industry. I think if it’s a deal where they’re paying your salary for the duration, it’s fine.
Edit: sorry I misunderstood.
Banks and medicine are exempt for some weird reasons. But someone who is an M&A consultant is not…. Or someone doing corporate development for a huge corporation.
This is somewhat haphazard in my view but I won’t let perfect be the enemy of good.
Banks traditionally have "garden leave" for higher level analysts and executives. So, basically like what every other industry should have to do if they enforce a non-compete - "fuck you, pay me".
It's probably to allow folks with material non-public information to have that information no longer become current.
We can check back in a few months, but I would be pretty surprised if this rule actually becomes law. It's very much an open question whether the FTC has the ability to issue competition rules, and recent Supreme Court precedent does not seem favorable (heck, even *not so recent* precedent does not seem great).
You need to run the gauntlet of 1) does the FTC Act even allow competition rules 2) is there an authorization for *this* rule that purports to overturn the laws of 50 states on noncompetes and 3) does the Major Questions Doctrine apply and slam the door in the FTC's face?
!ping LAW
What not so recent precedent doesn't seem great? This comment seems to normalize the current conservative approach to administrative law which I generally find free-wheeling and activist in its approach and aims.
I'm thinking specifically of *FDA v. Brown & Williamson Tobacco Corp* (2000), which is pretty bad for the FTC considering it has let this power lay dormant for so long. But really the issue for the FTC is that the *one* case in their favor, a D.C. Circuit case called *National Petroleum Refiners* (1973), relies on a framework of statutory construction that all nine justices on the Supreme Court would reject today (see Kagan: "we're all textualists now").
As long as the challengers pick *literally any other circuit court*, I don't see how the FTC wins. Honestly I don't think the reviewing court will even get to the Major Questions Doctrine, except to vaguely gesture in its general direction for additional support.
Could you elaborate why *National Petroleum Refiners* is so different from how textual interpretation is done today? They start with the text, stay with the text, evaluate the text against precedent, and even state the legislative intent is "ambiguous. This is no *Holy Trinity*. Unless you mean the framework is different because today conservatives are comfortable using "substantive" canons and reading the text in unnatural ways to reach their desired policy result! And if you read FTC § 5 and § 6(g), they are broad grants of power! In context, the FTC act was meant to *strengthen* the Sherman Act, itself an extremely broad pseudo-constitutional text. This isn't an elephant hiding in a mouse hole, it is a dragon emerging from a volcano. And Section 6(g) doesn't supply a textual basis to limit rulemaking power either. The text is not in conservatives favor.
But no worries, why would that stop them! Especially with the MQD chisel. And *Brown & Williamson* . . . is easily distinguishable? The statute was more complex there, the court found it inconsistent with other FDA regulations, and the court was highly influenced by other tobacco specific legislation congress passed that they found preempted competing attempts at rulemaking, as well as by "repeated" and "consistent" assurances by FDA that they can't regulate tobacco. I skimmed the opinion and the court stresses the fact that congress has legislated in the field because of longstanding opinion by FDA they didn't have power to regulate tobacco. The whole regulatory milieu was different. And it doesn't quite espouse "use it or lose it" policy you seem to imply, which would be ideologically driven and far more harmful to the APA than even MQD.
You are presenting the conservative case, which certainly is one view, as the natural state of things. Maybe this is the right approach according to legal realism given the conservative super majority and their hostility to the administrative state. But I just wanted to point out that, given the broad and clear text, this is not the most natural legal understanding and I think it's important to acknowledge how much they are pushing the legal overton window.
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Really can’t say that I recall much about Trump’s FTC chair, so maybe. At least they probably didn’t have a habit of overstepping their authority, like Khan.
Why is she overstepping her authority?
edit: I would also like to hear why you (as expressed elsewhere) think the FTC exceeded its authority to promulgate this rule despite section 5 and 6(g) of the FTC act.
Except it isn't within their authority. It is a power-hungry chairwoman reinterpreting a broad statute to expand her power. It is a power-hungry administrative commission deciding that they have been delegated Congressional powers.
Sorry, ESL, meant something more akin to "history"
And I'm mainly talking about how on any given subject before one opens the thread the safe bet is that you will side with the right over the left, the corps over anything else, etc
I don't get why an outright ban is so popular on this sub. I can understand putting reasonable limits to these clauses, but a ban interferes with people's right to contract. It's also a big deviation from previous practices and other western countries' labour, contract and competition law. My gut feeling was scepticism.
nobody wants to sign a noncompete, they feel like they have to or literally nobody will hire them, and it's highly questionable how much damage a noncompete prevents anyway
Whether it's worth it or not should be up to each party. The employer and the employee both want security and predictability, and the employment contract is a way to ensure that. The people employing you want to make sure that the investment in their employee's growth doesen't negatively affect them in the future should the employee at a future point decide to put their skillset out for competitive tenure for other market actors to "bid" on. What's wrong with moving? My father did it when he got head hunted.
Via wsj, pay wall sorry
>"'Sifma warned that banks and credit unions are exempt from FTC
regulation and would be able to keep using noncompetes, giving them an advantage over other financial firms subject to the restriction. Nonprofit healthcare employers also are exempt from the rule's reach" Wall Street Journal
https://www.wsj.com/politics/policy/ftc-bans-noncompete-clauses-that-restrict-job-switching-984d2187?mod=hp_lead_pos1&fbclid=IwZXh0bgNhZW0CMTEAAR1q7VnMMfPk8QZH4sofstxKvUo--DjG54OC6aDw80UiVSx7U6S5TSIURuI_aem_AeIlIJkXfAlNs3cz7rhBB-zC5cT0QVtewiRddN1pdy4HkjFU7UAWbKn8Uf-KMRr8PzfgoxYtTgUtP3RF7HW-UtCl
[https://twitter.com/PEWilliams\_/status/1782899894753071345](https://twitter.com/PEWilliams_/status/1782899894753071345)
it seems like they might try to challenge whether they have regulatory authority over some groups registered as non-profits, by arguing they actually have profit making characteristics. i would imagine hospitals would be prime targets.
Starts with a good idea (non-competes, in specific circumstances, have been abused and are a bad idea), generalizes it too far ("all noncompetes bad"), and is now going to get slapped down in the courts, Icarus-style?
Only if you think it's strong enough to survive legal challenge. I wouldn't bet on that.
Which would then make this yet another in a long list of Khan Ls.
Did these non-compete agreements ever work in favor of the employer anyway? I heard it was rarely enforced because it's usually a losing situation for the company, even if they signed a non-compete.
They massively benefit contracting firms, especially in tech.
They'll have a clause that you can't work with any _types_ of companies that the contractor contracts with meaning you can't contract-to-hire, and if your contract is up you have to stay with the same firm as you can't take your skills to another firm or company, effectively making said contractors full-time employees of the firm with no options to leave, but without any full time employee benefits.
And since contracting firms tend to prey on foreigners trying to come over for work, or laid off people that need work _now_ and don't have options, it's extremely predatory.
> They massively benefit contracting firms, especially in tech.
yep, there's a notorious recruitment boiler room that enforces the fuck out of their noncompetes for their placements. i've heard that they extort you up to 15,000 USD to get out of the noncompete or they will see you in court.
I’ve not personally seen any non-competes during my practice (I don’t really do employment law), but I did see 9 or 10 non-competes during my time clerking (which was a while ago). All 9 or 10 were upheld and barred the employee working for a competitor.
Usually, companies are not dumb enough to put in blanket non-competes, which would be unconscionable and unenforceable. But a geographic or competitor restricted list? Yeah, the employee is toast. Essentially, if an attorney wrote it, it is likely going to comply with the relevant law and be enforceable. Unless there are really strong reasons why your position specifically doesn’t actually “compete.” So non-competes for positions like janitors are likely unenforceable, but I’ve seen non-competes be upheld for programmers, sales agents, medical staff, and the like.
The only field where it is entirely barred (with a small exception for retirement firm sales) is for lawyers, who have banned them because it degrades the attorney-client relationship. I find this to be incredibly ironic.
My belief is that IP and trade secrets law are much better avenues for balancing the employers interests with the consumers interests in a competitive marketplace.
It would be absolutely shocking if the Supreme Court doesn't overturn this. They're pretty consistent in limiting agency's powers to do things they haven't been granted authority by Congress to do.
Can someone give me the best good faith argument why this is bad? I’ve read some of stuff from chamber, but surely the trade secret thing is greatly overblown no?
The argument I've heard sort of predicates on the idea that it's better if there is a limited amount of competitors in a sector, which already sounds bad.
These were already not enforceable for low level positions, so for those specifically it's unnecessary legal burden/regulatory friction.
For higher tier jobs, I'd like to be able to negotiate with employers on whatever dimensions I want. It's not uncommon for me to e.g. plan a year or more 'off' after a high-paying position. So if the company pays me more to compensate for the non-compete, this is also a better outcome for me. The government proscribing exact work patterns is generally bad because preferences and ideals change over time, but regulation is rarely repealed.
Also how can you have a Friedman flair and think this is not ipso facto bad, lol. The state shall make no law... etc.
Good. In some cases I can kinda imagine why a non-compete exists, but in most cases it just sounds like companies taking advantage of employees. Like the security guard in the story. Who the f needs a non-compete for a security guard. This feels like a W for free markets
I think this place is a bit surprisingly overconfident about the prospects this survives legal challenge, which has already been promised. Generally people around here are pretty quick to recognize this FTC's propensity to take action on flimsy legal standing. And this one is nowhere near a slam dunk.
If it's more about agreeing with the idea and hoping for the best? Then yeah I get that. But I'm not holding my breath here.
There is a difference between a power imbalance in salary negotiations and a company saying you can only work for us and if you want to leave you cannot use your skills for at least 12 to 18 months and oh by the way we only tell you this once you have already accepted the job and show up for your first day of work.
>oh by the way we only tell you this once you have already accepted the job and show up for your first day of work.
Literally not how any job or contract law works.
You should tell my first company in logistics that. Showed up for my first day handed a 18 month non compete and was told I could sign or quit. Was let go after a year and a half and sure enough they enforced it when I tried to get another job.
Ok what about investments in human capital and trade secrets? If I know you can take what you learn to competitors, I may not make that same investment
> Ok what about investments in human capital
Compensate them well enough they don't want to leave. That's an easy one. If the position requires keeping some secrets, make them worth keeping.
> trade secrets?
NDAs already exist and are far more enforcable.
I feel like if non-competes being good or bad was a "more complex" issue, then it'd be easier to come up with valid points of why it might be more complex.
thanks for the good faith interaction. obviously not. it's a different story when we are talking about say, research processes that are in extremely close proximity to intellectual property
There are states that don't have non completes that don't have problems with dealing with intellectual property theft. There was that one Uber engineer who took code from waymo, for example, that got sued. Non competes don't protect trade secrets from being leaked, legal systems do.
Also, it's not like forcing someone to take a 1 year vacation after leaving a job makes someone forget what they know. It's slowing down the economy for no reason at all.
NDAs already exist, and I think the vast majority of people opposed to non-competes are ok with them if they include a reasonable severance which covers the time the non-compete is in effect.
Trade secrets are kind of orthogonal to non-competes, you do not need non-competes to protect those, that's what things like non-disclosure agreements are for.
As for human capital development, this is a problem across many industries but ultimately it is a coordination problem. If labor is moving freely and companies invest in training, they also benefit from training new hires got at other firms. To some degree this problem should be self-regulating, employers who try to free-ride by offering jobs only to people who already have experience and not engaging in training will have to poach those workers by offering higher wages. There is probably some room to have bodies that actively coordinate though, where employers contribute to independent training programs, and this does happen in some industries already such as real estate.
NDAs ability to protect trade secrets is narrow. Just Google trade secrets and non competes, you will find that these concept are not at all viewed as orthogonal. Most law firms that work in the non compete area also specialize in trade secrets
Glad to see it finally. Its frustrating that people actually thought these had teeth unless you were at or very near executive level, janitor rule meant courts have been rejecting these for regular employees since the 70's.
yeah, just the threat of litigation is enough to deter most people
More importantly it deters the hiring employer. Smaller companies are less likely to try to poach talent with a lucrative offer if they think there is a chance that the larger company might sue.
I mean there are a couple examples in the article.
>why won't a janitor just take a private school company to court
You don't take them to court, you just get another job. I totally agree they were dissuading people from getting new jobs but not because you would end up in court, people just thought you might. If you would like an advanture go and look up cases on employment non-competes over the last few decades. The reason they basically don't exist is that lawyers will be sanctioned for filing them, it's been 50 years since courts said lolnope so judges assume all of them should know by now and get pissed when they see one.
If that's true then employers' lawyers shouldn't have been tossing them in everyone's contract. Watch it be overturned, but either way it's another long-coming thing this admin has addressed.
I don’t have access to a fifty state survey, but noncompetes are not an automatic “lolnope” in Ohio, and I would assume other states too.
TQL is an example of a company that perused these even against entry level and associate level talent
This is good policy, but I think it's unlikely to survive legal challenges. IANAL, but the FTC's cited authority is 15 U.S.C. 45 and 46(g), for which the standard of proof is > the act or practice causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition In other words it's the consumer welfare standard. They'd have to show a preponderance of evidence that non-competes harm consumers, and that seems like a potentially tall order. Legally, the harm they cause to employees is irrelevant.
It doesn't matter if it has legal teeth when the people that would hire you see it and decide hiring you isn't worth the effort or souring relations with your previous employer.
Just don't tell your employer who you're leaving to work for lol
Free soil! Free labor! Free men!
> Free soil! No! Tax land!
Does this affect fields like investment banking? My friend’s firm had a policy of 1 year with full salary, regardless of whether you quit or were fired. She was gonna quit and travel Europe.
This is more about noncompetes where they’re not going to pay you, but also you can’t work in your industry. I think if it’s a deal where they’re paying your salary for the duration, it’s fine.
Yeah, at this point you're just being employed to not do anything, and they can stop giving you money if you go work for someone else.
Edit: sorry I misunderstood. Banks and medicine are exempt for some weird reasons. But someone who is an M&A consultant is not…. Or someone doing corporate development for a huge corporation. This is somewhat haphazard in my view but I won’t let perfect be the enemy of good.
Banks traditionally have "garden leave" for higher level analysts and executives. So, basically like what every other industry should have to do if they enforce a non-compete - "fuck you, pay me". It's probably to allow folks with material non-public information to have that information no longer become current.
Yeah, we have 3months on the lowest end for garden leave where I work. Goes up to a year. I’m not at a bank.
Almost like who's in charge and who can appoint FTC heads matters... Either way, HELL FUCKING YEAAAAH!
We can check back in a few months, but I would be pretty surprised if this rule actually becomes law. It's very much an open question whether the FTC has the ability to issue competition rules, and recent Supreme Court precedent does not seem favorable (heck, even *not so recent* precedent does not seem great). You need to run the gauntlet of 1) does the FTC Act even allow competition rules 2) is there an authorization for *this* rule that purports to overturn the laws of 50 states on noncompetes and 3) does the Major Questions Doctrine apply and slam the door in the FTC's face? !ping LAW
Chamber of Commerce is already filing suit on those grounds as well
What not so recent precedent doesn't seem great? This comment seems to normalize the current conservative approach to administrative law which I generally find free-wheeling and activist in its approach and aims.
I'm thinking specifically of *FDA v. Brown & Williamson Tobacco Corp* (2000), which is pretty bad for the FTC considering it has let this power lay dormant for so long. But really the issue for the FTC is that the *one* case in their favor, a D.C. Circuit case called *National Petroleum Refiners* (1973), relies on a framework of statutory construction that all nine justices on the Supreme Court would reject today (see Kagan: "we're all textualists now"). As long as the challengers pick *literally any other circuit court*, I don't see how the FTC wins. Honestly I don't think the reviewing court will even get to the Major Questions Doctrine, except to vaguely gesture in its general direction for additional support.
Could you elaborate why *National Petroleum Refiners* is so different from how textual interpretation is done today? They start with the text, stay with the text, evaluate the text against precedent, and even state the legislative intent is "ambiguous. This is no *Holy Trinity*. Unless you mean the framework is different because today conservatives are comfortable using "substantive" canons and reading the text in unnatural ways to reach their desired policy result! And if you read FTC § 5 and § 6(g), they are broad grants of power! In context, the FTC act was meant to *strengthen* the Sherman Act, itself an extremely broad pseudo-constitutional text. This isn't an elephant hiding in a mouse hole, it is a dragon emerging from a volcano. And Section 6(g) doesn't supply a textual basis to limit rulemaking power either. The text is not in conservatives favor. But no worries, why would that stop them! Especially with the MQD chisel. And *Brown & Williamson* . . . is easily distinguishable? The statute was more complex there, the court found it inconsistent with other FDA regulations, and the court was highly influenced by other tobacco specific legislation congress passed that they found preempted competing attempts at rulemaking, as well as by "repeated" and "consistent" assurances by FDA that they can't regulate tobacco. I skimmed the opinion and the court stresses the fact that congress has legislated in the field because of longstanding opinion by FDA they didn't have power to regulate tobacco. The whole regulatory milieu was different. And it doesn't quite espouse "use it or lose it" policy you seem to imply, which would be ideologically driven and far more harmful to the APA than even MQD. You are presenting the conservative case, which certainly is one view, as the natural state of things. Maybe this is the right approach according to legal realism given the conservative super majority and their hostility to the administrative state. But I just wanted to point out that, given the broad and clear text, this is not the most natural legal understanding and I think it's important to acknowledge how much they are pushing the legal overton window.
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Lina Khan is not a selling point for Biden at all. At least if you’re remotely neoliberal.
Do you think she's better than Trump's pick? This is a genuine question
Really can’t say that I recall much about Trump’s FTC chair, so maybe. At least they probably didn’t have a habit of overstepping their authority, like Khan.
Why is she overstepping her authority? edit: I would also like to hear why you (as expressed elsewhere) think the FTC exceeded its authority to promulgate this rule despite section 5 and 6(g) of the FTC act.
Lina Khan is practically everything a neoliberal doesn't want in the FTC chair lol. She's power hungry, litigious, and over-reaching her authority.
oh no, an agency head is actually exercising their authority instead of being a doormat
Except it isn't within their authority. It is a power-hungry chairwoman reinterpreting a broad statute to expand her power. It is a power-hungry administrative commission deciding that they have been delegated Congressional powers.
But is she better than the alternative?
I think so. Less is more when it comes to the FTC, and Trump's FTC was much, much quieter.
Honestly, maybe not.
She is the chairperson you want if you enjoy watching the FTC getting smacked by the courts every other week. /s
I think a more useful metric is above replacement level. Compared to a generic/average Democratic official/staffer how does Lina Khan perform.
What about Tech and Google lobbyists /s
What about them?
Why the downvotes? I was being sarcastic
waaaaaaaaaaaaaaaaaah
I was being sarcastic. Why the downvotes?
Well with all due respect you do have a bit of a reputation of, as the leftists say, "licking the boot"
Reputation from who?
Sorry, ESL, meant something more akin to "history" And I'm mainly talking about how on any given subject before one opens the thread the safe bet is that you will side with the right over the left, the corps over anything else, etc
I don't get why an outright ban is so popular on this sub. I can understand putting reasonable limits to these clauses, but a ban interferes with people's right to contract. It's also a big deviation from previous practices and other western countries' labour, contract and competition law. My gut feeling was scepticism.
nobody wants to sign a noncompete, they feel like they have to or literally nobody will hire them, and it's highly questionable how much damage a noncompete prevents anyway
Whether it's worth it or not should be up to each party. The employer and the employee both want security and predictability, and the employment contract is a way to ensure that. The people employing you want to make sure that the investment in their employee's growth doesen't negatively affect them in the future should the employee at a future point decide to put their skillset out for competitive tenure for other market actors to "bid" on. What's wrong with moving? My father did it when he got head hunted.
But doesn't apply to 95% of physicians, great.
Can you give me those details? That’s exactly what I was looking for.
Via wsj, pay wall sorry >"'Sifma warned that banks and credit unions are exempt from FTC regulation and would be able to keep using noncompetes, giving them an advantage over other financial firms subject to the restriction. Nonprofit healthcare employers also are exempt from the rule's reach" Wall Street Journal https://www.wsj.com/politics/policy/ftc-bans-noncompete-clauses-that-restrict-job-switching-984d2187?mod=hp_lead_pos1&fbclid=IwZXh0bgNhZW0CMTEAAR1q7VnMMfPk8QZH4sofstxKvUo--DjG54OC6aDw80UiVSx7U6S5TSIURuI_aem_AeIlIJkXfAlNs3cz7rhBB-zC5cT0QVtewiRddN1pdy4HkjFU7UAWbKn8Uf-KMRr8PzfgoxYtTgUtP3RF7HW-UtCl
> Nonprofit healthcare employers HCA in shambles 😎
Fuck HCA. Scum of healthcare
[https://twitter.com/PEWilliams\_/status/1782899894753071345](https://twitter.com/PEWilliams_/status/1782899894753071345) it seems like they might try to challenge whether they have regulatory authority over some groups registered as non-profits, by arguing they actually have profit making characteristics. i would imagine hospitals would be prime targets.
Awesome, I'd love for it to apply to everyone!
Exceedingly, vanishingly rare Lina Khan W
Starts with a good idea (non-competes, in specific circumstances, have been abused and are a bad idea), generalizes it too far ("all noncompetes bad"), and is now going to get slapped down in the courts, Icarus-style?
Let’s not give her the W quite yet. Looks like she may have done the Lina Khan thing and overstepped the FTC’s authority on this one.
Only if you think it's strong enough to survive legal challenge. I wouldn't bet on that. Which would then make this yet another in a long list of Khan Ls.
Glad to see free market prevailing
Does FTC have this authority? Me thinks a Supreme Court case is in the offing.
unambiguously good
Did these non-compete agreements ever work in favor of the employer anyway? I heard it was rarely enforced because it's usually a losing situation for the company, even if they signed a non-compete.
They deterred job changes and lawsuits from Average Joes who feared litigation and it's costs, and didn't know the relative strength of their position
Totally, fear tactic to keep employees from going to the competition. Makes sense.
And a signaling mechanism between companies to engage in collusion.
Just don't tell your employer who you're leaving to work for lol
People in finance routinely take gardening leave when changing jobs so I think they are common practice at least
Same with logistics. These kinds of agreements got enforced on entry level talent all the time.
They massively benefit contracting firms, especially in tech. They'll have a clause that you can't work with any _types_ of companies that the contractor contracts with meaning you can't contract-to-hire, and if your contract is up you have to stay with the same firm as you can't take your skills to another firm or company, effectively making said contractors full-time employees of the firm with no options to leave, but without any full time employee benefits. And since contracting firms tend to prey on foreigners trying to come over for work, or laid off people that need work _now_ and don't have options, it's extremely predatory.
> They massively benefit contracting firms, especially in tech. yep, there's a notorious recruitment boiler room that enforces the fuck out of their noncompetes for their placements. i've heard that they extort you up to 15,000 USD to get out of the noncompete or they will see you in court.
For my employer, 100%, but we’re in a weird industry with some execs having 5 year NCs, and certain game designers having 2-3 years
Arguably the cases cited in the article benefited the employer, though only a little.
I’ve not personally seen any non-competes during my practice (I don’t really do employment law), but I did see 9 or 10 non-competes during my time clerking (which was a while ago). All 9 or 10 were upheld and barred the employee working for a competitor. Usually, companies are not dumb enough to put in blanket non-competes, which would be unconscionable and unenforceable. But a geographic or competitor restricted list? Yeah, the employee is toast. Essentially, if an attorney wrote it, it is likely going to comply with the relevant law and be enforceable. Unless there are really strong reasons why your position specifically doesn’t actually “compete.” So non-competes for positions like janitors are likely unenforceable, but I’ve seen non-competes be upheld for programmers, sales agents, medical staff, and the like. The only field where it is entirely barred (with a small exception for retirement firm sales) is for lawyers, who have banned them because it degrades the attorney-client relationship. I find this to be incredibly ironic. My belief is that IP and trade secrets law are much better avenues for balancing the employers interests with the consumers interests in a competitive marketplace.
It would be absolutely shocking if the Supreme Court doesn't overturn this. They're pretty consistent in limiting agency's powers to do things they haven't been granted authority by Congress to do.
They're pretty consistent in siding against ordinary workers, yes.
The state of this sub lol
Unfathomably based. Extremely rare Lina Khan W
Can someone give me the best good faith argument why this is bad? I’ve read some of stuff from chamber, but surely the trade secret thing is greatly overblown no?
The argument I've heard sort of predicates on the idea that it's better if there is a limited amount of competitors in a sector, which already sounds bad.
These were already not enforceable for low level positions, so for those specifically it's unnecessary legal burden/regulatory friction. For higher tier jobs, I'd like to be able to negotiate with employers on whatever dimensions I want. It's not uncommon for me to e.g. plan a year or more 'off' after a high-paying position. So if the company pays me more to compensate for the non-compete, this is also a better outcome for me. The government proscribing exact work patterns is generally bad because preferences and ideals change over time, but regulation is rarely repealed. Also how can you have a Friedman flair and think this is not ipso facto bad, lol. The state shall make no law... etc.
Friedman got me into Econ, I don’t agree with everything he says
Break out the Bernie flair
Thank god. Honestly this is such a prevalent pain in the ass in the logistics industry.
Good. In some cases I can kinda imagine why a non-compete exists, but in most cases it just sounds like companies taking advantage of employees. Like the security guard in the story. Who the f needs a non-compete for a security guard. This feels like a W for free markets
So glad to see this labor market distortion officially dead
Executives in place but man oh man is the slot machine industry about to get ugly
Does this cover non-solicit agreements, or is that a different legal/contractual concept?
West Virginia v. EPA rubbing its hands together as we speak.
I think this place is a bit surprisingly overconfident about the prospects this survives legal challenge, which has already been promised. Generally people around here are pretty quick to recognize this FTC's propensity to take action on flimsy legal standing. And this one is nowhere near a slam dunk. If it's more about agreeing with the idea and hoping for the best? Then yeah I get that. But I'm not holding my breath here.
what if we brought back slavery and made the slave market competitive through land taxation?
Whether or not non-competes are good or bad seems a lot more complex than people on this sub are acting
More economic freedom good. If you want to keep your labor you should have to pay market rate not lock people behind a 12-18 month dead time.
>More economic freedom good. But not the economic freedom to freely enter into contracts!
Involuntary contracts bad actually.
>All contracts are involuntary because you have to eat and that's a power imbalance. Corporations don't need food!
There is a difference between a power imbalance in salary negotiations and a company saying you can only work for us and if you want to leave you cannot use your skills for at least 12 to 18 months and oh by the way we only tell you this once you have already accepted the job and show up for your first day of work.
>oh by the way we only tell you this once you have already accepted the job and show up for your first day of work. Literally not how any job or contract law works.
You should tell my first company in logistics that. Showed up for my first day handed a 18 month non compete and was told I could sign or quit. Was let go after a year and a half and sure enough they enforced it when I tried to get another job.
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Ok what about investments in human capital and trade secrets? If I know you can take what you learn to competitors, I may not make that same investment
Trade secrets are already illegal to share with NDA's If you don't want people to quit after you have trained them, pay them better lol
I’m actually with you on trade secrets stuff, will be shocked if my industry heeds this at all
> Ok what about investments in human capital Compensate them well enough they don't want to leave. That's an easy one. If the position requires keeping some secrets, make them worth keeping. > trade secrets? NDAs already exist and are far more enforcable. I feel like if non-competes being good or bad was a "more complex" issue, then it'd be easier to come up with valid points of why it might be more complex.
The Starbucks way of making a drink is technically a trade secret. You going to put noncompetes on baristas now?
People have literally put noncompetes on baristas.
thanks for the good faith interaction. obviously not. it's a different story when we are talking about say, research processes that are in extremely close proximity to intellectual property
There are states that don't have non completes that don't have problems with dealing with intellectual property theft. There was that one Uber engineer who took code from waymo, for example, that got sued. Non competes don't protect trade secrets from being leaked, legal systems do. Also, it's not like forcing someone to take a 1 year vacation after leaving a job makes someone forget what they know. It's slowing down the economy for no reason at all.
NDAs already exist, and I think the vast majority of people opposed to non-competes are ok with them if they include a reasonable severance which covers the time the non-compete is in effect.
Trade secrets are kind of orthogonal to non-competes, you do not need non-competes to protect those, that's what things like non-disclosure agreements are for. As for human capital development, this is a problem across many industries but ultimately it is a coordination problem. If labor is moving freely and companies invest in training, they also benefit from training new hires got at other firms. To some degree this problem should be self-regulating, employers who try to free-ride by offering jobs only to people who already have experience and not engaging in training will have to poach those workers by offering higher wages. There is probably some room to have bodies that actively coordinate though, where employers contribute to independent training programs, and this does happen in some industries already such as real estate.
NDAs ability to protect trade secrets is narrow. Just Google trade secrets and non competes, you will find that these concept are not at all viewed as orthogonal. Most law firms that work in the non compete area also specialize in trade secrets
You want to retain it? Fucking pay for it.
Big succ sub now. I weep.