Ive seen a few articles like this on HN. Im a shop mechanic for a small chain of auto/truck repair stores in the midwest, and it got me thinking about the fine-print I signed when I hired on. Mostly taxes and sexual harassment stuff, but reading the details over a cup of coffee this morning It seems I did sign a non-compete.
Worse yet, I asked my boss about the non-compete and she just shrugged and said she didnt know what it was for, but that HR must have put it there. I wandered over to HR and they confessed they did not know when this was added either but it must have been something the owner wanted.
The owner and I have shared a few beers together, so I tapped on his door to ask about it. After calming him down and reassuring him he wasnt about to lose me, he admitted the "non compete" was something his attorneys told him to add. They mentioned Google and Uber as examples. After a few confused questions, he agreed to call a meeting with the managers and his attorneys and figure out if we really do need a non-compete, or if the lawyers are just making work.
It's really important that you did this, and even more important that you document that you did it. I know it probably seems obvious, but an agreement is more than a piece of paper that someone has signed. Written contracts _help_ to determine intention, but they can be superseded by oral contracts if the intention of the contract changes.
I once sat as a juror on a pretty nasty trial involving a contract where both parties disputed over the signature. We had to sit through days of testimony from professional handwriting forensics specialists over who they thought had signed a particular agreement. Was the signature valid, or was it forged?
In the end, it didn't matter. The two parties acted in such a way to form a different oral contract, and it was their actions which lead to the jury determining the outcome of the trial. The contract was a piece of the puzzle, but it's not the _only_ piece of the puzzle. One party acted in a way as to misrepresent what was in the written contract, and that was used to determine fault.
Thanks. I have an attorney friend who gave similar input.
I had someone not pay me for work 10 years ago. I filed a lawsuit, and... got back 20 page document about all the reasons they said they didn't owe me.
One was we didn't have a written contract. Well, I'd signed their contract, and sent it back, but never got a countersigned copy, and they're claiming they never agreed to it.
Another was 'laches' - I waited too long. Work was done a bit in April, then I was away for a week, then wrapped up basically by end of May - maybe 6-7 weeks in total. No money in June, lies in July ("it's coming, I sent it, etc") and then I filed suit in August.
Another was I'd waived my right to payment because in an IM I told the guy I was working for that I could wait a bit until he got paid. They took that as I was waiving my right to ever be paid.
I have to go find all my paperwork and screenshots now because - 10 years later - my court date is set for Dec. I had dozens (hundreds?) of emails and IM screenshots acknowledging receipt of invoice, promising payment, saying work was done, final client approved, etc. Email threads about all the work over several weeks.
At no point during any of that working project was there any "whoah, what's the invoice for? who are you? why are you working on this project?" The totality of the working relationship was that I was working on something with the understanding that they would pay, and there are multiple assurances that they would, in fact, pay. Yes, lack of 'written contract' was one piece, but the totality of the picture will hopefully weigh in my favor (but I gotta find all my stuff and get to court now - it's in another state!).
FWIW, first invoice was submitted, and the 'contract' (which they didn't countersign) stated invoices would be paid within 3 weeks. Not unreasonable, and faster than some other places I've worked for. Problem was, the rest of the project was completed in the next 3 weeks. BIG lessons learned on this one.
Filed august 2008. This case isn't in michigan, but an attorney friend of mine in michigan said "if this case was in michigan, you'd be at least 5 years waiting". This is in NYC - even longer.
The company filed against is no longer in business, so I'm not even sure what to do at this point. It was a small individual LLC, may not be anything to do, but he was so shitty about it - couldn't pay me, but screwed over multiple other contractors I found out about around the same time, I drove up to NYC and filed a lawsuit. I didn't think it would take an entire 10 years to get a court date.
again, per my comment re: michigan attorney, he'd indicated it might be a 4-5 year wait, as things were backed up there. NYC seemed to be 10 years. but i don't know how common it is.
I've had people say "you should have gone to small claims court!" Except, the claim exceeded small claims limit ($5k). Perhaps I could have rounded it down and tried for small claims, which supposedly is somewhat faster, but how do you know ahead of time this will take 10 years to even appear in court?
Not for me. I had a small claims case in San Francisco with a court date set about a month from when I first filed, and the entire thing was resolved in less than a year.
similar jury trial for a commercial case I stood on. But this was outright fraud, in that one business partner accused the others of sending them an enitrely different document than what was read and agreed upon. The plantiff didn't read the contract for many years and didn't notice it until he found out he was missing out on a lot of profits. So yea, for things like your job contract it's worth putting the time in to know what's going on and ask questions.
If it helps you persuade them to drop the non-compete, when I worked for Google in 2011-2015 and in my earlier internship for them in 2006, Google didn't use non-competes for any of their employees anywhere in the US.
This was probably for consistency across the country, since many of their employees are based at their California headquarters where all non-competes (except for a small edge case in the context of selling a company) are disallowed by law. The same law applies to Uber's California employees, which includes those at their HQ.
I don't know if they've subsequently added a non-compete for US employees outside of California, or if they have ever used one for their international employees, but I honestly doubt both.
I wouldn't be surprised if their contractors and vendors have worse legalese where the law allows, though.
My 2007 UK contract contained a non-compete clause. Actually, this was in the confidentiality and IP assignment agreement, which was separate from the main employment contract, and as it happened I only ever signed the latter.
But you are right about "worse legalese": in 2017 I came back as a temp, and was asked to sign an agreement containing an clause asserting I was authorized to receive materials subject to ITAR. I pointed out that only Americans (citizens or permanent residents) are so authorized, and that as I was not American I could therefore not sign it. I proposed striking the offending assertion and was told that I could not start until I signed the unmodified agreement. Apparently every other UK TVC had signed this without objection.
Eventually, though contacts inside Google, I managed to get them to see sense and issue a version of the document I could sign, but this took several weeks. Mind-bogglingly, when I returned as a temp this year my start was again delayed for several weeks for exactly the same reason.
Fascinating. I guess they figured they had to have markedly different language for the UK anyway, so maybe they would take whatever they could get away with. I should clarify that the US legalese did.have a 1-year post-employment non-sovereigntist, as is the US tech industry standard, and that even the California courts would probably find a duty not to compete during employment. But there was no post-employment non-compete.
The ITAR thing sounds like a bureaucracy that simply doesn't know how to reliably fix a wording bug in this area.
I'm sure Google's FTE legalese has changed a bunch since 2007, though. Amusingly, back in 2006, they still included interns in the company retirement plan, including matching contributions; while I appreciated it, that's definitely outside the norm, and they've since dropped that. My guess is that they initially drafted the retirement plan legalese without thinking to exclude interns, and then followed their own rules until they got enough interns to make it worthwhile to revise those rules.
Wtf autocorrect - non-sovereigntist should have been non-solicit. I've been discussing Quebec politics too much in other parts of the Internet, clearly...
Totally agreed, including in this case. But just as true is that lawyers often provide contract wording that is essential for smooth resolution of disputes when they do arrive.
Lawyers should be persuaded by clients and peers to keep things as simple as fits the bill, not dropped entirely from the drafting of important contracts.
I've always thought of lawyers like software developers in this case.
If you give either of them carte blanche, they will tend to create overly complex and expensive systems. It's not even malicious or self-serving (at least I'd like to think it's not), but more that their jobs revolve around "edge cases", and without something to reel them back they will try their hardest to cover them all.
I wonder if the software development adage of "good software is defined by what it does, great software is defined by what it doesn't do" applies to law?
A lawys giving a small client a bog-standard contract form is the good kind of development -- simple off-the-shelf solution that makes minimal fuss for maximal benefit.
You might find it amusing to learn that non-competes are generally unenforceable against attorneys on grounds that it'd be denying the client the choice of her counsel...
I was once given an employment contract upon starting a new job, which I read carefully. One clause granted the company the right to use my name, voice, and likeness in any marketing material they produce. I objected, stating that I didn't want them using my name, voice, or likeness for marketing purposes at all (administrivial stuff, like work ID badges, etc. was okay and couldn't be helped). I felt strongly enough about it that I was prepared to walk out of the office and forgo the job if they didn't acquiesce.
HR drew up a new contract without the offending clause that very day.
Point being, if you don't like a bit in your contract, challenge it. They may just take it out to not have to start their hiring process over again. You have to be unafraid to lose the job, but losing the job is nothing compared to being sued over cripplingly onerous contract terms.
Some things I'm sure are more negotiable than others. That clause in particular is sort of unusual. TBH, most companies probably feel they can use the names and likenesses of their employees in connection with their business without asking anu kind of special permission. I'm admittedly in a mostly externally-facing role but I know I'm plastered all over the place and I don't think I've ever given any kind of special permission.
> After a few confused questions, he agreed to call a meeting with the managers and his attorneys and figure out if we really do need a non-compete, or if the lawyers are just making work.
I just want to say that I'm super impressed that happened at all. Nice work!
There is nobody on earth that NEEDS a non-compete. If a party can leave your business and take your customers with them they were the valuable party in the relationship and have every right to take that value with them when they leave.
Its about decreasing agency of those with more useful skills but not much money to ensure more predictable returns for those with more money than skills.
If an offer includes a non-compete, it should also include appropriate restitution to the employee for the opportunity cost involved. This means paid garden leave and also extra compensation to help employees find their next job since their skills are likely to have degraded during the fallow period.
Forced arbitration is used to rob employees of their constitutional rights and I can't believe that the practice is legal.
Lastly, non-disparagement clauses and NDAs are overly broad. I'm not opposed to NDAs with limited scope but NDAs have become blanket weapons used to cover up evidence of illegal or immoral acts by employers. This is particularly problematic when combined with forced arbitration since it means that employees subject to wage theft (for instance) are unable to join a class action suit and verdicts rendered by the arbitration court can be kept secret.
All three of these practices are basically a repudiation of both democracy and our legal system with extremely negative effects for society and representative government. I completely agree with you.
Non-competes and forced arbitration are the beginning of a new system of corporate feudalism. (Want to move? Too bad, you're stuck on the fief by law.)
What's that? Your lord wronged you? Well, appeal to the Duke and see what he says about it, forget what your peers think.
NDAs make it so that the ills and wrongs of society never see the light of day and so can't be appropriately considered by citizens at the ballot box. Kind of like it used to be a crime to speak ill of the king...Yay modern lèse-majesté.
The clauses attached to the Weinstein agreement signed by Perkins offer an insight into how egregious some NDAs can be. She was prohibited from even obtaining a copy of the agreement – she could only look at it supervised at a law firm’s office, a clause that also prevented MPs from acquiring the document. Ultimately she obtained the agreement in June through a personal data request. Its contents confirmed that she was banned from talking to a doctor, therapist or psychoanalyst about Weinstein’s alleged harassment unless they also signed an NDA and that she should not speak about the payment even if HMRC questioned her about it.
“If a therapist, for instance, broke the agreement, I would be held responsible for their disclosure. There were guns pointed from every angle,” said Perkins, who has since managed to rebuild her career as a successful associate producer.
That's a very different scenario. That was a settlement offer -- Weinstein effectively offered her a bribe to drop her complaint and cover for him. She could choose to refuse the settlement and press her case through the courts, which of course would be the same option as if there was no settlement offer. Weinstein would never agree to pay her a settlement that didn't limit his liability -- the value of that to him is $0.
It would be great to have this encoded in statute. In the US, the doctrine of consideration in contract law used to server to rein this in, but in the last century has been weakened to the point where it has become a non-factor in most contractual disputes.
i recently had a company try to have me sign a document claiming ownership of anything i create in the time i work for them; meaning the tenure
i asked for clarification and without flinching they asserted that, 'yes, that includes on your own time and your own hardware even in a field wholly disparate from the one the company was in'
i thanked the interviewer for having me in and explained that though i felt they seemed like a kind person the company they were representing was offensive and unethical
Often in the first-day paperwork, or in the employee handbook which you don't see until day one, if at all.
In days past, there would sometimes be clauses asserting ownership over all IP for rest of your life, till courts finally declared those too much, since they deprived people of their livelihoods.
Cute factoid:
Dr. Seuss (Theodore Geisel) was an advertising copywriter. He went into children's books because that was all that was permitted under his employment contract.
I remember the first time I ended an interview early. I was 19. I applied to a food factory job. The general manager interviewed me, and then asked me a question "Are you married, son? We like to support families."
I said "That's an illegal question and you should know better. Good bye."
Just as a footnote. The vast majority (90+%) of Non-Competes are basically boilerplate that are unenforceable in most circumstances. Most businesses include them as an "optical deterrent" to prevent employees from quitting and jumping ship, only a fraction of them are enforceable.
Courts have routinely taken the position that "an employment contract cannot be used to deny a worker from his livelihood in the ordinary course of business".
The NC which are enforceable are generally very specific and usually cover things like trade secrets or proprietary data (ie. secret formulas, customer list, etc).
So you leaving your current job to work at another mechanic shop is entirely unenforceable, whereas you downloading the entire customer DB and shopping yourself around to other shops (with data in-hand) probably is enforceable.
^^^^^^^^^^^^^^^^
Some of this might be correct in _red's jurisdiction but every assertion is incorrect in my state. Who knows about your jurisdiction? IAAL but IANYL
It's still concerning, because supposedly non-functional crap can still affect our legal system. Like how the court-reporter's unofficial headnote for Santa Clara County v. Southern Pacific Railroad Co. became important for the doctrine of corporate-personhood.
Much like DNA, if you leave something around there's a chance a mutation might activate it.
the contract might not be literally enforceable by the courts, but the real threat of costly litigation can both intimidate employees and companies that might hire them.
If a large company is known to be litigious with respect to non-competes, it almost doesn't matter if they rarely get judgments in their favor. The rational thing for an individual leaving that company is to either find a job that doesn't violate the non-compete or wait out the length of the non-compete.
OR create a class action of other harmed parties. People always seem to forget "organized labor" as an option these days, and that's basically the posthumous version.
>Courts have routinely taken the position that "an employment contract cannot be used to deny a worker from his livelihood in the ordinary course of business".
OTOH, I've worked in and am pretty familiar with a particular branch of market research/consulting firms in the IT industry. I've been told directly by employees and ex-employees of a couple of the largest firms that people who leave to start their own practices or go to competitors are routinely kept from doing so. I personally know people who have basically hung out "on the beach" for a year for this reason.
So, in that case, those people basically couldn't go to another firm and do the same thing as they had been doing.
I've been told that they had taken people to court and won. And, if it gets to the point that you're going to have to hire an expensive lawyer to fight a big company with uncertain prospects, I think I'd just take a year off at that point (or take a job that wouldn't be subject to the non-compete).
ADDED: Although I actually agree that, for the most part, the harm of non-competes is in the chilling effects for both workers and potential employers because no one wants the uncertainty and risk. And there are enough lawsuits in many locales to give credibility to non-compete enforceability.
They have to sue YOU for breach of contract damaging their reputation with the rest of their workforce, discouraging future hires, spending money on expensive lawyers, potentially waiting years for resolution. If their case is frivolous as it likely is you could do tens of hours of research and defend yourself pro se for nothing.
Well, that's only a problem if the employer decides to go after you. And in the vast majority of cases they won't. They likely won't even know where your new workplace is.
Yes, they could file a frivolous lawsuit against you, but this is true no matter what is or isn't in your contract.
In Taiwan, Foxconn had noncompete for all their employees and in the articles it specifies a sweeping list of fields that are prohibited for the said employee to enter after leaving Foxconn.
Foxconn infamously took one of their employees to court for being a taxi driver and the case was quickly dismissed. And recent years all non competes cases in Taiwan are thrown out except for high level managers.
oh come on, nobody is going to mistake a comment on the internet for legal advice (or if they do, it'll be a learning experience).
adding "IANAL" has gotten just as out of hand. the vast majority of the population are not lawyers and therefore the vast majority of people on the internet are also not lawyers. so why do you insist on calling this out? to draw an analogy here, it's like lawyers adding non-competes to contracts. maybe we can stop adding IANAL to comments first. enough with the ass covering.
This is my way of doubting that the post is accurate without claiming expertise myself. What do you do?
People are constantly saying things that are wrong about the law. Reminding ourselves of this and being humble about our knowledge (through the use of disclaimers) doesn't seem like a bad thing. Letting confident assertions stand does.
Unenforceable in Court, that is. If you are someone who doesn't have the money to retain an attorney, and you don't have experience with these things, then you very well may believe that it is enforceable, and therefore to you, it is.
Similar to noncompetes, forced arbitration agreements are infesting every employer/employee relationship. I recently had to pass on joining a really cool startup because their PEO insisted on an arbitration agreement. The startup offered to bring me on 1099 to work around the PEO, but I'm not really interested in the overhead of managing my own health insurance, etc right now.
Somewhat amusingly, days after settling back in at my current employer I logged in to our PEO's interface and found myself staring at fresh employment agreement... with a nasty arbitration clause smack in the middle. Fortunately current employer was willing to stand up to their PEO and get it removed company wide.
I'm loosing count of the number of situations I've walked away from because the contract included boilerplate stuff like that; AND the person who wanted me to sign the contract had no clue about the BS in the contract.
Right out of college, some guy wanted me to sign a NOLO contract that you'd use for hiring someone as a general contractor for your home. Walked away from that.
I almost bought some land where the developer set up a boilerplate HOA that restricted things like boats in a town where everyone has a boat... And my direct neighbor wasn't part of the HOA!
Yeah, they clearly aren't important for the software industry, with the success of California. Yet in Washington State all we hear is that they are really important, all big companies support them.
I'd go a step further and say that they hinder the software industry.
Letting people jump ship and start companies or find better jobs is way better for an industry's productivity than having a bunch of miserable workers faking it because there are legal barriers to finding another job.
It is good for established interests but bad for the industry. Banning all car makers except Ford would be good for them but bad for the automotive industry to give a deliberate extreme.
This is part of why I’m happy I live in Oregon. We have pretty specific laws about when a noncompete can apply[0] and Oregon tends to be more employee-friendly in general.
Huh. I hadn't read the statute before so I only knew about the two week thing.thats great to know. Thanks for the link. (Another person living in Oregon).
How would an employer react if the roles were reversed, i.e. the employer can't hire another programmer for two years if you, a programmer, leave? Ridiculous of course, which shows why it is just as ridiculous for an employee to have to agree to a non-compete.
Something like this reversal is actually the law in some countries. An employer cannot hire someone else for your position for some period of time if they "lay you off", as distinct from firing you.
Noncompetes implemented smartly are good and not a power grab over employees. I signed noncompete, but employer is required by law to pay at least 25% of my salary if he wants to enforce it. That is minimum amount, I have negotiated 50%. If he doesn't want to pay this, he can't dictate where I can work, I could go to direct competitor then.
You provide the thesis "Noncompetes implemented smartly are good and not a power grab over employees."
Then you utterly fail to support this thesis in any imaginable fashion. Most people can't survive on 25-50% of their current salary with current obligations.
Markets/relationships require information and agency to function efficiently.
It's damn near amazing that you presumably understand that consumer choice is essential for an efficient market for groceries and wrenches but you don't believe that contracts that interfere with employees choosing an optimal employer don't make for an inefficient labor market.
When you understand that ANY employer could maintain minimal turnover by paying a competitive wage/benefits just by the human nature of desiring stability it ought to be obvious that the only reason to desire a noncompete is so that you can offer less without losing employees.
Yes, I wouldn't want to survive on 25% of my salary, also I don't need to. I still can work as a programmer, just not for companies which are DIRECTLY competing. It's not like I can't work as a programmer whatsoever. Also if I had job offer from competitor, my current employer would need to pay me 50% of my pay, I could still find another job (even with better salary) AND still receive that 50%. It's non-compete, not "no work for you".
Software developers make up most of the labor force and your financial and job market position are atypical. Context of the conversation is expanding non competes to broader swaths of the working population.
There is no janitor anywhere who is in a position to negotiate a 50%-of-salary payment as a condition of signing a noncompete.
Historically, we (governments) have tended to write laws that constrain what employers can require, especially of low wage workers, because of the extreme power imbalance. Hence the existence of laws on minimum wage, overtime, mandatory breaks, paid leave, etc.
> There is no janitor anywhere who is in a position
If you count USA as anywhere then sure. My fiance is a janitor, if any company wanted to make non-compete clauses, she just wouldn't sign it. There is serious understaffing of janitors where I live, so if there was too much bullshit in her job, she would leave. And we see USA as pinnacle of freedom and job possibilities...
There are too many non-competes and many are over-broad but garden leave of probably at least 50% seems a reasonable compromise if a company feels strongly about having a non-compete for whatever reason. That should be enough that it forces a company to think about whether they really want to enforce this and, while perhaps not ideal for the employee, is likely not too onerous assuming the non-compete isn't draconian in other ways.
The majority of people can't live on 50% of wages further the person may actually be underpaid and looking for a job that pays what they are actually worth. Example the person is paid 25k at a present employer looking at getting 35k.
That person who can't choose to make 12.5k in the short run will accept 25k instead forever.
If companies can't legally implement no poaching agreements to keep employees wages down I don't see why they should be able to do so with non competes.
It isn't about making the company think about whether or not it is necessary, but making sure that when they do think it is necessary, the employee can survive. If a company feels that they truly need a non-compete from you, they should be ready to pay full wages for one year.
At a previous company I had to sign a fairly stringent non-compete, but attached to it was the constraint that if the firm chose to enforce the non-compete, they had to compensate 100% of the salary for the time that they chose to enforce it (up to one year).
This was still not perfect, since the non-salary compensation at finance firms is a non-trivial portion of total compensation, but in my mind should be the minimum required by law for a non-compete agreement.
“Good” in what way? They’re certainly good for your employer, but how are they good for employees?
I can think of exactly zero benefits to me, unless they’re paying at least 100% of my total expected income, including bonuses and other discretionary income.
I could receive that 50% and work somewhere else (still as a programmer, but not for direct competitor). But when extreme inflation hits, I will probably have other problems than my noncompete.
Presumably they would still be allowed to work for a company that does not compete with the one they worked at previously, so they would get those 50% on top of the salary of their new job.
"Direct competitor" is a rather limiting term. I can think of only one such company in my city, but there are several other with open jobs for programmers which I could consider working for (and I would not be competing so this noncompete would be inapplicable). It's not like I couldn't work as a programmer whatsoever.
Even if a non-compete is legally unenforceable in court it can still be used to bully employees or those who attempt to hire them.
I once worked at a consulting company (one of the big dot-com consulting companies) that put a clause in the contract that said no employee could leave to go work for any client of the company. That was fine when the company was small and had few clients, but when they became large it prevented us from leaving to go to any reasonably successful firm because almost all of them were clients. If anyone attempted this the company would reach out to the potential employer and warn them not to hire the person. The other company would then back down because they didn't want to jeopardize their business relationship with the consulting firm.
As the dot-com bubble burst and the consulting firm became a sinking ship they continued to enforce it. We had to wait for layoffs to be exempt from that clause.
One of the issues with this is that bosses (or their lawyers) just google search for contracts, paste them into a document, and then have people sign them without considering whether or not they are enforceable. The proliferation of these kinds of contracts also makes them less enforceable. Noncompetes are supposed to be for executives and to prevent people from sales roles from just stealing their employer's customers and bringing them to their new job.
It's not supposed to prevent the sandwich guy at Arby's from getting a job at Subway to earn an extra $2/hr. Were those kinds of contracts to be enforced consistently, it would bankrupt state courts and create a lot of confusion.
I doubt many places really do that. In the UK, for example, it only costs a couple hundred quid for a boilerplate employment contract from a proper employment lawyer that you can fill the blanks in on and re use for a long time. Copying and pasting a Google search contract would be insane. Then again, I'm a sane business owner so maybe I'm not qualified to comment on dumbass ones.
I applied for freelance work once for some sort of tech Q&A platform. It was basically answering people's one-off questions, like "how do I change my screen resolution on Windows 10" or whatever.
They asked me to sign a contract with a clause saying that I'd assign them any inventions I came up with in the course of my work, sign anything reasonably related to them pursuing patents for these inventions and grant them power of attorney to do so on my behalf if I didn't do so promptly. (There was a separate copyright clause that was itself reasonable).
I pointed out that the work wouldn't result in any inventions and that I couldn't possibly agree to sign future agreements or assign even limited power of attorney to them. They seemed genuinely confused at why I was objecting and wouldn't budge.
This one is of the fantastic things about living in California. Noncompetes are illegal here. It's not like we don't have a whole bunch of other problems, but at least this isn't one of them.
At a certain point, this is about exercising all but the power of life and death over your employees. There’s no rational economic reason to force your janitors into non-competes, the only reason is to have power over your employees for the sake of power.
I maintain that our system is trending in a neofeufal direction, with corporations replacing the lords of old. A noncompete which effectively leaves you unemployed should you quit is not quite serfdom, but it’s getting pretty close.
> There’s no rational economic reason to force your janitors into non-competes
I would argue there's a rational economic reason (reducing competition for the labour pool so you can pay them less) but not a morally acceptable nor even free-market-compatible reason. It's major abuse, and it makes me furious that we're using Cushman & Wakefield for our property management.
We need to make employment contracts non-severable so that employers can't get away with this shit. Oh, you want to put in a probably non-enforceable or illegal clause into your contract? Well then the entire thing goes down the toilet when it's found to be invalid. Otherwise employers will keep putting blanket stuff in that they know will probably fail in court to chill their employees.
I'm a consultant, and recently terminated my services for an inventor-type. Already has made his money.. he's spinning up various new endeavors and trying to hit the brass bell again.
While working on company #1, he wanted to bring me in on company #2. He told me the idea, which didn't interest me a whole lot, but there was a key issue with it, culturally speaking. I told him I wasn't sure how he would be able to scale up staff given that people may not want to spend their 40-45 hours/week working on "X". (I"m being purposefully ambiguous...)
His response? "For a paycheck, they will..."
Anyway, that defined his general management philosophy. It's pretty prevalent out there.
This is a guy who can't keep talent for more than a few months at a time... hasn't slowed him down.
I think that's what has impressed me most recently, in my consulting endeavors. The number of moneyed company owners who persist on a destructive chain of behavior in spite of how it hurts their own ambitions.
And yet, in cases like this, if you can succeed just enough, there's nothing stopping you from clamping down because you want to.
i've worked for a lot of different kinds of bosses/owners, and the "check-writer" philosophy, stated so unapologetically, has often been most closely aligned with the worst bosses, with the unhappiest employees.
so yes, he can, and no, it's not, IMO, on the more effective end of the scale.
saying that, in and of itself, is often a barometer of a shitty boss.
the good bosses might have a bit of that in them, but they have other values ahead of that statement that lead them to be better bosses, and IME, more successful in their given organizations.
I agree, the direction seems that way in our new gilded age.
However, I'm not bullish on it being able to survive/thrive. There is just too much change happening. Feudal systems thrive in static environments, not frothy ones. With the rise of Africa in the later half of this century, climate change really starting to swing, the maturation/stagnation of the digital/surveillance economy, and the coming pandora's box of CRISPR-CAS9, the social/economic environment that is giving rise to this Neo-gilded age of corporate feudalism cannot stand for much longer. Life is going to be too 'fun' for the stodgy lords/CEOs.
For the business it is. At the moment, what we're being told, is that unemployment is extremely low and it's harder to find people. Thus businesses doing what comes normal to them are going to try to leverage themselves as much as possible. (People either are convinced they have no other choice, have no idea what these mean, or lack the leverage to fight these provisions)
When I read about stuff like this, increasing surveillance of employees or all the stuff the TSA is planning with face recognition it looks like there is trend that the regular citizen will be under tight control while the ruling class will live behind walls in gated communities where they will be exempt from that control.
In order to be valid, noncompetition agreements must meet the following criteria pursuant to ORS 653.295:
- The employee is exempt from minimum wage and overtime as a “white collar” employee (i.e., he or she fits into either the executive, administrative or professional exemption);
- At termination, the employee’s annual salary and commissions exceed the median family income for a family of four as determined by the U.S. Census Bureau;
- The employer has what is called a “protectable” interest. This means that the employee will have access to trade secrets or competitively sensitive confidential business or professional information, such as product development, product launch, marketing or sales plans and strategies;
- The agreement is entered into at the beginning of employment (or bona fide advancement), and the employer has provided a written notice to the employee - at least two weeks before employment begins - that a noncompetition agreement will be required; and
- The agreement is not effective for longer than 18 months from the date of the employee’s termination.
I had a job in the past that snuck in a non-compete into the non-disclosure agreement, which I stupidly signed. Fortunately, the company went bankrupt before they had a chance, but they sent me an intimidation letter when I quit that any work I do is subject to their approval, with a photocopy of the NDA attached. It was horrifying.
> One of the central contradictions of capitalism is that what makes it work — competition
No.
Competition and Capitalism are literally antithetical. This is outlined better than I could ever explain in Zero To One by Peter Thiel, but in essence:
Capitalism is all about, including in its very name, the access to and deployment of Capital. Competition destroys Capital. In its most basic form, think of the airline industry. It's highly competitive, which forces airlines to run razer-thin margins and drop prices. This kills R&D, and while its great for consumers in the short-run, it can actually hurt consumers in the long run because it doesn't even matter if Delta would love to invest more R&D into more efficient planes, allowing them to make them roomier and cheaper; they can't, because they don't have the capital to spend on it.
In the worst case, companies abuse incumbent/monopolistic positions by sitting on their asses and doing nothing with the capital they bring in. That's why a market without competition gets a bad rep. But this isn't always the case, especially in the modern market where companies are deathly afraid of technological disruption.
Competition is necessary, but that doesn't make it a great thing. And it certainly is not a core component of capitalism; it's a core, necessary component of Free Markets.
EU resident here. It's routine to make employees sign non-compete agreements even when they're known to be unenforceable. The employer is free to sue, but it's generally understood that only managerial level people would end up in trouble.
In the US the "beauty" of unenforceable agreements is that the employee still has to be afraid of them because a lawsuit will be expensive. Not everyone has a few thousand dollars lying around for a lawyer and the time to pursue the case. This gives the company a huge advantage and an incentive to sneak in such clauses.
The problem is that smaller businesses in particular may well ask you if you have a non-compete and will simply pass if you do because they can't afford to get into litigation. I worked for a small consulting firm for a number of years and we basically wouldn't touch anyone who had a remotely applicable non-compete. It just wasn't worth the risk.
For a janitor, a non-compete would be ridiculous! As a software developer, it's annoying but survivable by switching industries. What's worse IMHO is a non-solicitation agreement. I worked at a business that was shutting down operations locally, and a bunch of people were leaving at all levels. One of the departing top execs wanted to hire our development team and we wanted to go. But due to his non-solicitation, he was afraid to even talk to us about any plans he had for at least a year. And by that time we all had to find other jobs...
There's no good reason for a maintenance, food service or custodial worker, or even most programmers (don't kid yourself about how novel the crap you work on is) couldn't work for two competing companies without a conflict of interests.
If two competitors could both outsource the service provided by the employee to the same entity without a conflict of interests then it shouldn't be subject to a non-compete.
NDAs for trade secrets and reasonable policies on use of company assets and time should be able to cover the edge cases.
Sure there wouldn't be a conflict of interests, but if I had a business, and I found out one of my employees was working for a direct competitor, it would hurt my feelings. I think it's fair to fire someone who hurt my feelings. And maybe I'm just talking about a policy instead of a noncompete contract.
It would be a bit more compelling if the articles the author referenced to support his claim that non-competes are everywhere were not all written by him.
It makes me wonder, are these common scenarios, or is the author on a crusade and has found some rare instances of it happening that he is blowing out of proportion?
Noncompetes, especially ones that seek to limit what you can do after the employ of the company are pure evil, and give absolutely no benefit whatsoever to the employees. They should be unilaterally banned.
In a feudal system the money flows up and the protection flows down - look at Putin and his oligarchs. In the US it's only the money that flows upwards.
What makes you think the feudal system wouldn't have preferred to have only money flow up and nothing flow down? The only reason feudal lords provided protection was because if they didn't, there would be no money flowing up to them.
In the Middle Ages the serfs always had the opportunity to run away, they could decamp to a city or a competing lord. Besides, the Church and later the rising merchant class provided a counterweight to the excesses of rural gentry. They may have preferred absolute power, but they couldn't have it. If you are an oligarch in Russia it seems you still have the opportunity to run off to London or Vancouver, so history repeats itself even now.
Serfs were bound to the land and not much better off than slaves. Another lord would not have welcomed a runaway serf and escaping to a city would have been an extremely risky venture as serfs had little – if any – money (subsistence farming was the order of the day, when not working for the lord on his lands). Giving up their family and wider social support network to become an anonymous beggar in a city would not have been a good move. Even if one had a skill, the city guilds controlled the ability to use skills for commercial purposes. It’s possible that a few people (e.g., gifted musicians) may have been able to escape the bonds of serfdom. I also don’t know how easy it was for a serf to join a monastery or a convent – but otherwise, I imagine the proportion of serfs who could run away to the city is likely to have been equivalent to the proportion of modern-day Mancunian kids who escape the council estate by playing for Manchester United.
"Stadtluft macht frei" and the related "year and a day" are still German proverbs. Eric Hansen made similar assertions here (popular history, but sounds plausible): https://www.amazon.com/-/dp/3596173248/
I knew the experience of European serfs varied a lot in terms of freedoms and obligations to their lord but everything I’d read until now about life in feudal Europe lead me to understand there was very little mobility – and particularly so for the lower classes. That Wikipedia article provides an interesting counterpoint so thanks for that.
I’d also only come across “a year and a day” as the pre-marriage trial period that a couple would spend together in the tradition of hand-fasting – and the old common law standard regarding attribution of cause of death. I was not aware that it also served as the length of time that escaped serfs would be legally freed if they managed to survive that long.
Well, value; in the classical feudal system the lowest classes would rarely have much money to flow anywhere, and their obligations were mostly in-kind in labor and produce, not monetary.
We have not had real capitalism in this country since the Gilded Age, when the dollar was backed by gold. Fiat currency and Keynesian economics sparked the mess that were are in today.
> We have not had real capitalism in this country since the Gilded Age
Yeah, capitalism globally fell to the mixed economy throughout the developed world, to the point that most modern references to “capitalism” refer to the mixed economy, not the original system named “capitalism”, because while people may not have been sold on the prescriptions of more radical alternatives like Communism, they broadly weren't satisfied with capitalism, either.
> One of the central contradictions of capitalism is that what makes it work — competition — is also what capitalists want to get rid of the most.
The subtext of this, that capitalism is bad (and perhaps socialism is better) is pretty disingenuous. The only reason non-competes work is because we don't have pure capitalism (I'm not arguing for that, it'd be bad, but) the government is stepping in and saying you have to follow the rules of this contract which are not in your best interest.
Au contraire: "pure capitalism" would permit two parties to sign any binding contract they wish, free from government regulations about which clauses are permissible.
I'm not claiming that "pure capitalism" prohibits a government from enforcing contracts — just that it wouldn't impose a particular restriction on non-compete agreements, as OP claims.
> Au contraire: "pure capitalism" would permit two parties to sign any binding contract they wish, free from government regulations about which clauses are permissible.
“Pure capitalism” is the exact system for which the name “capitalism” was coined, the dominant system in the developed West in he mid 19th century. It most certainly did not allow that.
What you are referring to isn't “pure capitalism” but “anarcho-capitalism”.
And, actually, nothing would be particularly binding based on agreement, as enforcement would be based on what the parties could pay enforcers to enforce, which would in practice depend on ability to pay enforcers, not on the text of documents or the evidence of whether the other party had agreed to them and violated the applicable terms.
All anarcho-capitalism means is that the entity enforcing contracts is not the state. I'm not making any claim about how contracts would be enforced; rather, about regulations on which clauses would be impermissible.
Semantics aside, the point is that non-compete clauses in contracts are very much in line with capitalism, both in theory and in practice.
> the government is stepping in and saying you have to follow the rules of this contract which are not in your best interest.
I think they may be arguing that pure capitalism would be like Mad Max - you just do what you want until the next powerful leather-clad CEO decides to change the rules and use you not as software engineer but as a blood bag.
I'm arguing that building a new social contract because the current one isn't perfect is foolish and naive in the extreme.
The author kinda touches on it later in the article, but the only reason we have these contracts and they were deemed enforceable is because we wanted to avoid a breakdown where executives would steal all their company's secrets and then go to a competitor. Slightly amended regulation is necessary, not some sorta social uprising.
> Slightly amended regulation is necessary, not some sorta social uprising.
And here I'd just broken out my leather chaps.
In that case I totally agree with you. What was once a tool for a company to protect itself against someone with leverage is now a method to discourage and oppress those at a disadvantage.
Outside of very special industries and knowledge you can blatantly ignore non competes without consequence. They are basically unenforceable for most circumstances and no attempt will be made.
For the janitor, sure. And, yes, non-competes are beyond ridiculous for janitors, fast-food workers, and the like. For senior people? It's actually a pretty small industry. If an employer actually cares, they can find out pretty quickly where an ex-employee has landed especially if they're in a visible externally-facing role.
As you say, under most circumstances most companies don't actually care even if they have some boilerplate non-compete clause. But some do, especially in places where close client relationships are important or where it's a senior person moving to a direct competitor.
At the same time, someone who signs it might not know any of that. In that case, the contract does become "valid", because no one is going to challenge the validity of it.
You and I might know these clauses are unenforceable garbage, and we might be able to get a lawyer to send a nasty letter to the former company if they attempt to use it. However, that situation is not common for everyone, and unfortunately the most vulnerable in our society are the ones who get punished because of it.
Janitors can't afford lawyers. Access to legal aid is the biggest determinant of whether a contract is enforceable or not from a functional standpoint.
The profit margin hiring janitors is thin enough that it's not worth it for anyone who's hiring to take the risk on someone who lists as prior experience a company that is known to make it's employees sign a non-compete.
It's not the employees who's actions are influenced. It's their potential other employers' actions that are influenced.
Also, what are you going to do if you're forced into an arbitration court? Your chances of winning in that environment are zero, even with competent legal representation.
I'm not a lawyer, but I think this highly depends on the state you are in. From my googling, judges in my Midwestern state are very reluctant to strike down any kind of contract made between two adults.
I live in the Midwest and have dealt with a couple non-competes. They are toothless if you simply take a strong stance from the get go. No lawyer required.
Leaving, I've been threatened about legal action and basically said I didn't care, swore a few times and moved on. They won't spend the money to enforce it. Most noncompetes I've seen were written so terribly they wouldn't have a leg to stand on anyways.
It works. Non-comepetes are basically unenforceable regardless of state. They are just used to threaten and bluff. Telling them to fuck off shows you know they have no standing.
Even by the standard of what passes for legal advice on the internet, this is especially terrible advice. I also live in the Midwest and am currently sitting out a noncompete agreement (which, since it must be paid to be enforceable in my state, has been quite enjoyable).
Like you, I’m also not a lawyer, but I did engage the services of a firm when I left. My lawyer informed me in no uncertain terms that my noncompete agreement was enforceable and cited several cases where a) their firm took employers to court to have the agreements tossed and lost and b) unsuccessfully defended people who did what you did and were sued by their previous employer.
In general, “fuck off, sue me” usually isn’t a great legal strategy.
Problem with that advice is you have to believe they won't do anything, and know that these things are garbage when you decide to start looking for another job. If you don't know that these are garbage, or think that they will try and enforce it, then you're probably going to be dissuaded from looking for other work in the first place.
Worse yet, I asked my boss about the non-compete and she just shrugged and said she didnt know what it was for, but that HR must have put it there. I wandered over to HR and they confessed they did not know when this was added either but it must have been something the owner wanted.
The owner and I have shared a few beers together, so I tapped on his door to ask about it. After calming him down and reassuring him he wasnt about to lose me, he admitted the "non compete" was something his attorneys told him to add. They mentioned Google and Uber as examples. After a few confused questions, he agreed to call a meeting with the managers and his attorneys and figure out if we really do need a non-compete, or if the lawyers are just making work.