[HN Gopher] New York may ban noncompete employment agreements an...
___________________________________________________________________
New York may ban noncompete employment agreements and Wall Street
is not happy
Author : pg_1234
Score : 515 points
Date : 2023-11-18 08:17 UTC (14 hours ago)
(HTM) web link (fortune.com)
(TXT) w3m dump (fortune.com)
| zaptheimpaler wrote:
| God bless Lina Khan our based monopoly busting, employee
| supporting FTC queen.
| nxm wrote:
| She has not been very successful at it judging by her record
| delfinom wrote:
| The FTC isn't the org with much power over employee rights.
| That's the DoL.
| latency-guy2 wrote:
| It's not uncommon for various government orgs to overstep
| beyond their stated mission, goals, or purpose. Khan seems
| like the kind of person to abuse their power indeed.
| Lev1a wrote:
| > Wall Street isn't happy that employees will have more freedom
| in their choice of employer
|
| "In other news, water continues to be wet."
| quickthrower2 wrote:
| Wall street should be half happy half sad. It is a wall street
| company poaching off another wall street company.
| chiefalchemist wrote:
| True. But the way The System works isn't WS v WS, it's WS v
| Everyone Else. WS doesn't want to waste time and energy
| hurting themselves. They know better. They behave more like
| starlings. No conspiracy per se, just mutual interests that
| align strategy, tactics, direction, etc.
|
| https://youtu.be/V4f_1_r80RY?si=e-niFwrb-QeE4oDU
| plagiarist wrote:
| Needs to be national policy. Non-competes compensated at full
| pay or they are illegal.
|
| Let's get mandatory binding arbitration as well.
| fkarg wrote:
| Non-competes shouldn't be a thing for most employees.
| eru wrote:
| Unemployment in eg the US is fairly low. So you can pick
| companies which have less stringent non-competes (or non at
| all).
| AlchemistCamp wrote:
| When I go back to the US, I pick states by which have limited
| non-competes.
| SenAnder wrote:
| Limiting yourself to voting with your wallet/feet, while
| corporations use every trick in the book, is like trying to
| win at chess using only pawns.
| neilwilson wrote:
| Jobs on offer are fewer than number of unemployed.
|
| Therefore jobs are scarce.
|
| Only when there is a vast surplus of jobs will competition do
| the work. Until then you need regulation.
| sophacles wrote:
| And regulators that dont cite "low unemployment" when they
| raise interest rates.
| marcus0x62 wrote:
| Or we could not allow unconscionable contract terms.
| toomuchtodo wrote:
| Labor rights shouldn't be governed by employment metrics.
| hulitu wrote:
| > New York may ban noncompete employment agreements and Wall
| Street is not happy
|
| I though capitalism (Wall Street) was about competition. /s
| eru wrote:
| It's about voluntary contracts, too.
| neilwilson wrote:
| It can only be voluntary if _everybody_ has an alternative
| job to go to.
|
| While firms only hire if there is a profit to be made, and
| people have to earn to eat the 'no deal' stand off isn't an
| option.
| Paul-Craft wrote:
| Agreements between parties of vastly unequal power and
| alternatives are not voluntary.
| cj wrote:
| If they aren't voluntarily, they wouldn't be enforceable in
| court.
|
| What you're trying to say is there's limited alternatives.
| (The most obvious alternative is to not take the job)
| Paul-Craft wrote:
| No. What I'm saying is "take a job with a non-compete or
| starve" is not a situation in which a worker can make a
| voluntary choice, "enforceable in court" be damned. Not
| to mention, such agreements are often not stated up front
| as part of the job description.
| cj wrote:
| I hear what you're saying, but it's hyperbole. I think
| there's zero percent of you starving over your
| unwillingness to sign a non-compete.
|
| Pretending like the situation is that extreme isn't
| helping anyone.
| Paul-Craft wrote:
| Why should I believe you? You don't offer an argument. It
| is _entirely_ plausible that one could be faced with a
| situation of losing one 's home, health insurance,
| ability to exist in modern life, and, oh, one's actual
| _life_ due to unemployment. I know this because _it
| happens._ Non-competes, by definition, make this problem
| worse by reducing the number of jobs available to a
| person. What 's _your_ justification?
| cj wrote:
| I'm not going to debate or justify non-competes. I'm also
| not advocating for them.
|
| All I'm doing is calling you out that when you join a
| company, you're voluntarily signing all of the contracts.
| It's not some kind of involuntary act of slavery. A
| responsible adult is presented a contract and chooses to
| sign it. That's the opposite of involuntary.
|
| Your argument is it's involuntary.
|
| That's what we were debating. I wasn't debating the
| contents of the contract. I personally don't see a major
| need for non-competes and is overkill in almost all
| cases.
|
| I'm simply tired of the "I'm a victim!" mindset of
| blaming others for their own actions. It's your fault if
| you signed a shitty employment contract. Next time read
| the fine print, or don't sign it.
| Paul-Craft wrote:
| Absolutely none of that is necessarily voluntary. You
| have missed the point entirely. A choice between "X or
| die" is not a choice. That is a very real scenario, which
| you have not even acknowledge. Instead, you're saying I
| should be an expert in contracts.
|
| I am not making the situation "extreme," either. If
| anything, the situation is even more extreme than I am
| making it out to be.
| acdha wrote:
| This is too simplified a position:
|
| 1. A company can usually go without hiring people than a
| worker can go without making mortgage payments or issuing
| rent. In the United States, that includes basic access to
| medical care.
|
| 2. Companies have large legal departments advising them
| on how to craft language and the boundaries of the law.
| Most workers don't even want to pay a lawyer to review a
| contract knowing that they'll almost always be told it's
| standard and there are no exceptions.
|
| 3. People join a company when the relationship is good,
| and aren't thinking about how it could be sour. This
| often includes verbal assurances about things like this
| which are not written into contracts, and a change in
| management which provides reason to leave also
| invalidates all of your assumption about who you entered
| into the agreement with. If you signed with "only a
| direct competitor" that probably seemed more reasonable
| at the time than when the new boss / acquiring company
| decides that since you work on software anyone else who
| works on software is a competitor. A lot of open source
| developers went through this with IP grabs which were
| agreed to cover only their new employer's direct business
| but then a change in ownership meant that someone was
| trying to claim their hobby game or even non-software IP.
|
| Yes, ideally everyone would know about this and refuse to
| deal with abusive companies but the reason we have laws
| is because that's not how the works has ever worked.
| Providing clear boundaries is useful both because because
| society is healthier if even people who make minor
| mistakes or trust the wrong person are protected and
| because it levels the field for everyone. If the law says
| no non-competes, people don't need to generate millions
| in revenue for lawyers telling them why company A is
| offering less than company B, and company C is not going
| to try to bully their existing employees into accepting a
| worse deal. It's the same reason we say "your boss can't
| demand sex" / "teachers can't have sex with students"
| because that avoids having to individually litigate each
| case to decide whether some power gradient was crossed.
| Simple boundaries are enormously useful, and in this case
| there's really no downside (New York would love it if
| banning non-competes devastated their economy into
| California's).
| lordnacho wrote:
| I think the issue here is what voluntary means.
|
| It's not black or white. You don't have to be held at
| gunpoint for something to be involuntary, and nobody is
| ever so free of concerns that everything they do is
| entirely voluntary.
| caddemon wrote:
| Wall Street non-competes are only enforced if they pay
| you your base salary during the period. They can also opt
| to not do that and waive the non-compete, in which case
| you can work anywhere. I think it's ridiculous that
| Subway has non-competes, but with regards to the article
| I doubt anyone is forced to choose between working for a
| trading firm and starving. There also are some firms that
| do not do non-competes. So it's closer to voluntary than
| involuntary I'd say, though very few decisions are truly
| 100% personal choice.
| jounker wrote:
| In the USA fast food companies are requiring non competes
| for burger flippers.
| cj wrote:
| I whole heartedly think that burger flippers should not
| have to sign a non-compete.
|
| But HCE's who deal with intellectual data (not burgers)
| all day long? Maybe, maybe not.
|
| The point is it's a choice to sign these contracts. Not
| every company makes you sign one. If it's important to
| you, ask about it upfront in the interview process so it
| doesn't turn into a "life or death" decision after you've
| accepted a verbal offer.
| louwrentius wrote:
| Not like that! They mean competition in the sense of how much
| wage theft is possible to get away with
| ajb wrote:
| After noncompetes, they should go after non-solicitation. Entire
| teams that work well together should be able to defect from
| shitty employers. It kind of happens anyway but on the quiet,
| inefficiently - I'd love to see a job website where you can list
| an entire team.
| cj wrote:
| Non-solicits also include not soliciting customers.
|
| Which is particularly relevant at consultancies where the
| product is a service.
|
| If you join a consultancy group, and 2 months later quit with
| the client roster... is it really OK to poach all their clients
| to start your own consultancy?
|
| All of these contracts are time limited, FWIW. E.g. non-
| solicitation doesn't mean you can never work your your
| colleagues again. It protects against someone leaving and then
| immediately poaching all employees within 12 months. After 12
| months you're welcome to poach as much as you'd like.
|
| Edit: Furthermore, non-solicits don't ban your colleagues from
| quitting with you, as long as you're not directly asking them
| to quit. If they make the decision independently without being
| lobbied by a former employee, it's not in violation of non-
| solicit.
| izacus wrote:
| > If you join a consultancy group, and 2 months later quit
| with the client roster... is it really OK to poach all their
| clients to start your own consultancy?
|
| Yes. It's called free market competition and it's great for
| the society and economy. NYC bankers should be first in line
| to understand that.
| cj wrote:
| What you're advocating for is normalizing the stealing of
| company IP.
|
| The way you solicit clients from a prior company is
| downloading the client list, exporting to a personal drive,
| quitting, then using the list to poach.
|
| I'm fine if that's your intention, but let your employer
| know upfront that you won't protect confidential company
| data.
| izacus wrote:
| > What you're advocating for is normalizing the stealing
| of company IP.
|
| I am not.
|
| > The way you solicit clients from a prior company is
| downloading the client list, exporting to a personal
| drive, quitting, then using the list to poach.
|
| Which part of this is "IP"?
|
| The whole concept of "stealing IP" is something that was
| lobbied in to prevent market competition and establish
| monopolies. Calling a list of clients that might choose
| to vote with their wallets for better service "IP" is one
| of the most ridiculous claims I've seen here lately and
| pretty much proof of how this term has become a problem
| for modern free market society.
|
| While IP protection itself is critical for some
| innovation, the way you all wield it to defend
| monopolization and entrenchment is a main reason to
| rethink what IP and protection actually gives to american
| economy.
| cj wrote:
| > Which part of this is "IP"?
|
| I should have said conditional customer data. (Client
| lists, phone numbers, email addresses - basically
| whatever you can export out of Salesforce)
|
| In order to poach your old company's customers, you'll
| need confidential data from your prior employer, assuming
| that your employer doesn't publish their client roster
| publicly.
|
| The debate is being dragged from poaching customers to
| how IP protections enable monopolies. That's too big of a
| leap to be relevant in this thread (sorry for saying IP
| rather than confidential data)
| felipelemos wrote:
| My email is not your confidential data. My phone number
| is not your confidential data.
|
| If your company can only exist by blocking other
| companies from competition with your customer, then your
| company should not exist in first place.
| cj wrote:
| We're talking about an insider who has insider knowledge
| about accounts and maybe also a personal relationship
| that they were paid to develop with a client.
|
| Also, it's a 100% fact that companies consider client
| rosters confidential. It's fun to say no one can claim my
| name or phone number as confidential data... but that's
| not how things work.
| acdha wrote:
| > Also, it's a 100% fact that companies consider client
| rosters confidential. It's fun to say no one can claim my
| name or phone number as confidential data... but that's
| not how things work.
|
| It is how things work legally. What you are confusing is
| the distinction between individual bits of information
| and a database: if a salesperson leaves and calls their
| old client, nobody reasonably expects them to forget
| about that relationship or be unable to look up a phone
| number.
|
| If there's an entire lead database, that might be a
| different story if it includes non-public data and the
| company can show that it's treated as a valuable asset
| (limited access, confidentiality agreements, etc. ). If
| it's something you could recreate with a few Google
| searches, you'll have a hard time convincing a judge that
| there's substantial value in its secrecy.
| willcipriano wrote:
| I claim my browsing history is confidential, the only
| difference is I don't have the government enforcing my
| wishes. On a moral level "stealing" one is the same as
| the other.
| briandear wrote:
| My list of your email is confidential data. The fact that
| I am talking to you is confidential. If you choose to
| disclose it, that's your business, but a client list is
| absolutely confidential data.
| BobaFloutist wrote:
| Is it ok if you just memorize it and recreate it?
| fsloth wrote:
| You are thinking about stealing the rolodex. That would
| be probably theft. But personal relations and reputation
| is NOT company IP.
|
| If you steal the rolodex, it's questionable for sure.
|
| If you leverage your network and reputation, that's
| something that free market should never limit.
| cj wrote:
| Agreed. I misspoke, should have said confidential data
| (like a Rolodex) rather than IP.
| mdorazio wrote:
| IP protection is an entirely separate thing and has a
| huge body of case law around it already. Non compete and
| non solicitation do not allow employees to take IP with
| them, as evidenced by the many cases against tech
| employees who tried to do that.
|
| And no, taking a client list with you is not how this
| works in consulting. You take the client you currently
| work for and have a relationship with and offer them a
| better deal to work with you independently. After that
| you're on your own to solicit and win new clients.
| lordnacho wrote:
| This is an invented crime, meant to protect the
| incumbents.
|
| If I'm a waiter in a restaurant there should be nothing
| to stop me telling the customers that I'm going to a
| better restaurant and they should come and try it. Will
| the boss be annoyed? Yes. Should he be allowed to stop
| me? No.
|
| In the real world there is no salesman who thinks of the
| clients as belonging to the company. They all know that
| sales relationships are personal. The contracts may say
| one thing, but the reality is different. The law ought to
| be to allow free association. Customers lose out when
| they are not offered better deals.
| cj wrote:
| FWIW, I agree with the scenarios and examples using
| workers making minimum wage. Waitresses, etc.
|
| On HN we're talking about tech employees who make 5-10x
| the median US salary.
|
| We can have stricter rules and stricter contracts for the
| 5% top paid employees. Obviously a waitress shouldn't be
| sued for talking about another restaurant with a
| customer.
| lordnacho wrote:
| Making 5-10x because they are forced into arrangements
| that deprive them of 10-15x.
|
| If a waitress shouldn't be sued, why should a dev or a
| PM? We should all be equal under the law, there shouldn't
| be a "oh well you make enough money" clause. If anything,
| freeing high-productivity workers is the bigger win for
| society, far outweighing the benefit from better
| restaurants.
| makapuf wrote:
| We're talking about employees making 5x median salary vs
| companies making how many times median company profit ?
| cj wrote:
| In an ideal world companies would share profits with
| employees.
|
| In an ideal world, employees would also share in the
| losses when companies aren't profitable (forgo a
| paycheck).
|
| ...everyone wants the first scenario, but absolutely not
| the 2nd! When will people realize that one of the value
| props of working for a company (as opposed to starting
| your own) is you're guaranteed a stable income regardless
| of whether profits are going up or down.
|
| (You can say it's not guaranteed because you can be
| fired. Fair. But the point still stands, it's nice to
| have a stable paycheck that doesn't wildly fluctuate up
| and down)
| meindnoch wrote:
| My email address is not your "IP".
| acdha wrote:
| > What you're advocating for is normalizing the stealing
| of company IP.
|
| This is categorically untrue - if some past employer told
| you that, you might want to ask what their motives for
| lying to you were. Your knowledge of who you worked for
| is not corporate IP.
|
| The actual legal standards vary from state to state but
| in some states it come down to three things: does that
| list have economic value on its own, would it be hard to
| recreate, and does the company make an effort to keep it
| secret? That probably won't apply to your personal memory
| of who you worked for since that's highly unlikely to be
| an independently valuable resource - typically that would
| be a big list of non-public information like people who
| signed up to preorder a product, people with a certain
| need or interest, etc. - and it definitely wouldn't
| include anything listed on their website, press releases,
| or someone's C.V. If you dump the CRM on the way out,
| yes, you might be in trouble but there's no legal
| standard expecting you to be mind-wiped on the way out.
| polygamous_bat wrote:
| No one is more afraid of the free market and competition
| than the biggest capitalists. They are always trying to
| pull up the ladders behind them that helped them get where
| they are.
| FFP999 wrote:
| They want a free market _for everyone else_. What's the
| point of being rich and well connected if you can't
| socialize your losses and keep your profits?
| madeofpalk wrote:
| I don't see the problem with this.
| Xelbair wrote:
| >If you join a consultancy group, and 2 months later quit
| with the client roster... is it really OK to poach all their
| clients to start your own consultancy?
|
| If your company didn't pay you enough to keep you, nor did
| provide good environment ans support? absolutely yes.
| ajb wrote:
| I'm talking only about soliciting co-workers. It should be
| within the ability of legislators to ban only that - they are
| clearly distinguishable, as they have different contractual
| relationships. I don't really have an opinion about
| soliciting clients.
|
| It's true that multiple people can quit at the same time, but
| non-solicitation clauses significantly impedes the process
| otherwise companies wouldn't bother to write the them. If you
| have worked for a shitty company, what delays quitting? Often
| team loyalty is a big part of that. I think it would
| massively speed up the decomposition of bad workplaces if
| entire teams could move in one go. It would be highly
| efficient for the acquiring company as they get a complete
| team that already works together, for only slightly more
| effort than hiring a single employee. It would also be huge
| disincentive to tolerating bad managers.
| ghaff wrote:
| Non-solicitation clauses are typically mostly about client
| lists. Companies may get a bit grumpy if a bunch of
| employees leave to go work for a former manager elsewhere
| but AFAIK there's not much they can do about it. Who is to
| know who even initiated the reaching out assuming a bare
| minimum level of discretion?
| ajb wrote:
| When you reduce the cost of something by a large factor,
| it is often gamechanging. I think that being able to move
| a whole team _openly_ could reduce the cost to the new
| employer by a factor of three or more, which would be a
| significant change in the employment market, and change
| employer behavior.
|
| Here is how I see it working out:
|
| Lets say that Foosoft is a rapidly expanding unicorn, and
| Microgle is a cash cow which is going nowhere, and the
| employees are being squeezed by bad managers brought in
| by private equity. Foosoft is wants to expand rapidly to
| take advantage of their huge opportunity, so the are
| setting up entire new teams. Right now, they have to do
| so at a cost of X per employee, so ~6X per team, which
| includes the cost of recruiter fees, time of
| interviewers, team-setup time, and the initial
| inefficiency as the team learns to work together. X is
| going to be a substantial fraction of 1 year salary. The
| cost is going to be pretty similar if a team migrates
| using the whisper route, as they won't all migrate
| across, the interview process is the same, there will be
| some new members, etc. X might be a bit smaller as you
| will have probably have fewer interviews as you found it
| easier to source candidates once your first hire made it
| in. But the your first hire might not have been from the
| team wanting to move.
|
| Now instead suppose that the team from Microgle listed
| themselves on PoachMyTeam.com. Foosoft only has to check
| that the team is a good fit (it's a backend team, say,
| with capabilities they want). Then they interview the
| team lead and do group interviews of the team as a whole.
| Probably your interview process is 2X rather than 6X -
| you don't need to repeat everything for each candidate,
| because they already trust _each other_. Fundamentally,
| you don 't need to check the capabilities of each
| employee individually, just the capabilities of the team.
| Also, X will be smaller because there will be less team
| setup, etc. So, a cost reduction of more than 3, at a
| guess. That degree of change is likely to change the
| employment market as a whole, at least in those areas
| where teams moving is likely to be practical.
|
| But today, Microgle would sue PoachMyTeam.com for
| tortious interference. So PoachMyTeam.com cannot exist
| under current law. This is an economic friction caused by
| (private) regulation of the market.
|
| As regards non-solicitation being mostly about clients,
| my most recent employment contract had a separate clause
| against employee solicitation as well as client
| solicitation.
| ghaff wrote:
| I don't think I've ever been in a circumstance where I
| would have had any interest in moving to another company
| with an entire team. I admittedly haven't moved jobs a
| lot but I don't really imagine it's especially common
| that everyone on a team would be ready to jump ship and
| come to terms doing the same type of job with a new
| employer, likely in a different location. I'm sure it
| happens but I can't believe it's the norm.
| ajb wrote:
| Fair enough. I doubt it would become the norm, but I
| could see it being common among failing companies.
| lordnacho wrote:
| > All of these contracts are time limited, FWIW. E.g. non-
| solicitation doesn't mean you can never work your your
| colleagues again. It protects against someone leaving and
| then immediately poaching all employees within 12 months.
| After 12 months you're welcome to poach as much as you'd
| like.
|
| For me that doesn't change anything. You should be allowed to
| tell your customer to come with you to a new business, the
| next day.
|
| Companies know perfectly well that most of that value of the
| relationship is gone if you have to wait a year, so they
| pretend that time limiting is somehow reasonable.
|
| The free market actually needs to be free.
| cj wrote:
| Say you join a startup. They get some early traction and
| they have 5 customers paying $5m/yr for a technology
| platform. Let's say it took $20m in R&D and marketing to
| get the product built and to land those 5 multi-million
| dollar accounts.
|
| Without a non-compete and without a strong IP clause, a
| handful of employees could very easily steal the IP and
| steal the client list, start a new company, offer the same
| product for half the price, and convince the 5 clients to
| come over to the new "half price" company. Putting the
| original company out of business. The new company employees
| are excited because they stuck it to the man by burying
| their prior employer. Fast forward 2 years, and the same
| stunt is pulled against the new company, and the cycle
| continues.
|
| What happened was the stealing of IP and customers that
| cost $20m to acquire, but because you stole it you didnt
| have to pay that $20m in R&D and can offer the price for
| half off to get clients (whose contact and details have
| been stolen from the prior employer) to follow you to the
| next company.
|
| Assuming you think this scenario is ethically wrong (maybe
| you don't?), can you explain the type of contract the
| original company should have with their employees to
| disincentivize this scenario? If everything is left
| unchecked, there's huge incentive and easy pathway to screw
| over employers for short-term gain.
|
| Hell, if we take it to the extreme and get rid of NDAs,
| what's stopping a random call center employee from selling
| a company's client roster to the highest bidder?
|
| Free market, yes. Unquestionably free market with no
| regulation, not going to work.
| acdha wrote:
| > Without a non-compete and without a strong IP clause, a
| handful of employees could very easily steal the IP and
| steal the client list, start a new company, offer the
| same product for half the price, and convince the 5
| clients to come over to the new "half price" company.
|
| How would it be "the same product" without taking actual
| IP like source code or trade secrets for manufacturing?
| No company where the value is solely in a particular
| concept is going to last very long because a competitor
| can do the same thing. If you've discovered some novel
| physical process, chemical compound, or created a useful
| gene sequence, it's unlikely that you could remember
| everything but what you want are patents.
| deezleguy wrote:
| > Free market, yes. Unquestionably free market with no
| regulation, not going to work.
|
| I agree with what you're saying, but non-competes are an
| example of free market not a counterexample. The employer
| is willing to give you x amount of compensation in return
| for your labor and for an agreement not to compete for
| some period of time when employment ends.
| lordnacho wrote:
| If the company is making something of actual value, it
| will be hard to replicate. Just as you can't recreate
| that McDonald's taste just because you worked there, most
| businesses have some sort of intrinsic IP that you can't
| steal. There will always be some risk that a team could
| leave and fail to recreate the thing elsewhere. In my
| line of business this happens all the time (quant
| trading). People think they know why their strat works
| and when they transplant it, it mysteriously doesn't
| work.
|
| The solution to this is to compensate people so that they
| don't take the chance and leave. "I'm already making X
| here, why would I want to risk that?". This naturally
| distributes wealth a bit more evenly between the workers
| and the owners.
|
| You also need to think about your scenario. If the
| employees are able to make the same thing at half the
| price to the customer, that is a HUGE gain for the
| customer. If another breakout crew does the same, that's
| half the gain again. The customer wins, but it can't go
| on forever, at some point it's not worth the breakout
| risk.
| bluecalm wrote:
| Your argument works with IP alone and without client
| lists. You very much want to put a company's client list
| in the same bag as IP but it just doesn't belong.
| Protecting one (arguably) allows people to invest in
| developing something that is easy to copy when it already
| exists. Protecting the other is just anti-competitive
| practice and should be banned.
|
| >>Assuming you think this scenario is ethically wrong
| (maybe you don't?), can you explain the type of contract
| the original company should have with their employees to
| disincentivize this scenario? If everything is left
| unchecked, there's huge incentive and easy pathway to
| screw over employers for short-term gain
|
| "You can't use our IP if you leave, feel free to go to
| the clients and offer them your own product".
| Libcat99 wrote:
| If you can entice the customer base to leave so easily, it
| sounds to me like you're offering them a better product and
| should be allowed to.
| ThunderSizzle wrote:
| > If you join a consultancy group, and 2 months later quit
| with the client roster... is it really OK to poach all their
| clients to start your own consultancy?
|
| If those clients are willing to jump ship that fast, then
| yes. Realistically, that won't happen without a good
| justification.
| mbesto wrote:
| > If you join a consultancy group, and 2 months later quit
| with the client roster... is it really OK to poach all their
| clients to start your own consultancy?
|
| I've been part of 5x consultancies in my career now, so this
| is a very heated debate.
|
| - First, if you "steal" a client roster, then this is very
| clearly a trade secret and sits under different terms ("IP")
|
| - Second, if I can do the same job (e.g. that don't require
| access to trade secrets) then why do I need the consultancy's
| benefit anyway? If the consultancy's brand/operations don't
| provide enough value to its clients already then maybe they
| (the consultancy) are doing something wrong. It's a
| consultancy's job to create value for its clients,
| consultants and it's partners, otherwise it's just a body
| shop.
|
| - Third, "is it really OK?" by whose definition? Are you
| saying ethically?
|
| > If they make the decision independently without being
| lobbied by a former employee, it's not in violation of non-
| solicit.
|
| Why does it matter whether the employee is lobbied or not?
| The employee ultimately has free will.
|
| If we believe that the free movement of jobs is a net benefit
| (both in terms of wage normalization and societal innovation)
| then aren't those things we would want as a society?
| ElevenLathe wrote:
| > If you join a consultancy group, and 2 months later quit
| with the client roster... is it really OK to poach all their
| clients to start your own consultancy?
|
| Seems fine to me. If the only value the "company" brings to
| the table is a client list, maybe they should just be in the
| business of selling leads.
| felipelemos wrote:
| > If you join a consultancy group, and 2 months later quit
| with the client roster... is it really OK to poach all their
| clients to start your own consultancy?
|
| If the clients prefer to leave with the then 2 month-old
| employee, then the consultancy is doing something very wrong.
| sgift wrote:
| > If you join a consultancy group, and 2 months later quit
| with the client roster... is it really OK to poach all their
| clients to start your own consultancy?
|
| Yes, of course. Neither the employees nor the clients are the
| property of the consultancy. Maybe next time they provide a
| better service so employees and/or customers don't see a
| reason to go to a competitor.
| golergka wrote:
| It is always cheaper to buy off a team that has developed
| internal knowledge and cohesion with higher salaries than
| invest in a few years of forming such a team. Same with a
| junior who have been mentored and trained. Regardless of
| whether the previous employer was shitty or not.
|
| If you make companies unable to protect something, they will
| stop investing in building it. I don't blame you, people almost
| never think about second order consequences for things they
| propose. But banning non-compete and non-solicitation will mean
| that companies will be much less willing to invest into their
| teams and non-senior employees.
| ajb wrote:
| Ok, the argument that giving employees more bargaining power
| vs their employers will somehow make the bargain they end up
| with poorer. This is not convincing, and nor is your
| unjustified patronising assumption about how much I have
| thought about this.
| mzi wrote:
| In Sweden all non-compete clauses that has been challenged by a
| court has been thrown out. Unless they have been backed by
| compensation. Too few cases has been tried to establish a floor
| for this compensation, but numbers thrown around indicate that
| you should be prepared to pay around 60-80% of the salary during
| the non-compete period.
| paulgb wrote:
| On Wall Street it is typical to get full salary for the non-
| compete period, but in some cases that may be a modest fraction
| of total compensation including bonus/other incentives.
| 23B1 wrote:
| I'm always happy to sign a noncompete - and add a line about how
| the company will pay my full rate for the duration.
| causi wrote:
| Non-competes should, at minimum, be banned for anyone not making
| in the top 10% of salaries.
| tzs wrote:
| Washington does something like that. Non-competes can be valid
| but the employee has to be making $100k/year or more in 2020
| dollars.
|
| Also, if the employee is laid off then it is not enforceable
| unless the company pays the ex-employee during the term of the
| non-compete the difference between what they had been paying
| them and whatever the employee earns in whatever non-competing
| jobs they take during that time.
|
| For consultants as opposed to employees to be enforceable the
| contractor has to be earning $250k (again in 2020 dollars).
|
| The law also has something to say about employers that don't
| want to let employees have other jobs, or do contracting, or do
| self-employment. Employers can only prohibit that if the
| employee is making at least twice minimum wage, unless that
| other work could cause safety issues or interfere with the
| reasonable and normal scheduling expectations of the employer.
| F-W-M wrote:
| Non-competes can work out if the rules actually favor the
| workers. I had one while working for a HFT in Germany and would
| sign it again.
| qwerty456127 wrote:
| I've heard about a good compromise option existing in a country
| in Europe: noncompete agreements are not banned completely but
| are limited to last just half a year after the employee leaves
| the company. It can also last much longer in case the employer
| agrees to keep paying half the salary to the former employee.
| tpm wrote:
| Don't know about that but a compromise option always exists
| when the two parties are willing to compromise. E.g. in our
| country noncompetes are outlawed but if your company is willing
| to pay for your gardening leave for a year, then you might be
| willing not to compete with them for that time. Happened to my
| boss (at 100% salary).
| dudul wrote:
| Sounds like a terrible compromise to me.
|
| Why do I need to spend 6 months without pay and then more time
| with only 50%?
| Drakim wrote:
| In what universe is it a good compromise that fast food workers
| aren't allowed to work at another fast food restaurant for 6
| months after they quit, without any compensation?
|
| It incentivize companies to add it to their contract just
| because it makes it harder for employees to quit bad working
| conditions and low pays since they might not land a new job and
| be able to pay rent. It doesn't protect any sort of
| intellectual property, it's simply there to screw over the
| little guy.
|
| The word "compromise" usually implies that both sides are
| getting something. What part of this would be a compromise?
| qwerty456127 wrote:
| Well, it didn't even come to my mind that a fast food worker
| might have a noncompete agreement. I thought this only is
| about engineers, scientists, managers etc - people who
| actually have knowledge which is reasonable to prevent from
| leaking to a competing company too quickly. Applied to a
| fast-food worker any noncompete agreement sounds really wild.
| Do fast-food companies actually require this? Sounds crazy.
| ghaff wrote:
| >Do fast-food companies actually require this?
|
| It has happened although it's probably a "man bites dog"
| sort of thing that made it into the news.
|
| I'm not sure it's good policy in general to discourage
| people from working--especially in the area they presumably
| have some expertise in.
| Drakim wrote:
| It is happening, Walmart was doing it to their cashiers,
| and why shouldn't they? It's a huge boon to companies to
| make it difficult and expensive for people to quit their
| jobs in favor of something better, it means they can push
| wages down further, give worse working conditions, without
| needing to worry about people quitting.
|
| Back when it was allowed, some companies would pay in fake
| company money called "scrip" that you could only use in
| their company store to buy food. They also owned the houses
| so you could only rent if you were an employee. Wanna quit
| your job? Good luck also losing your house and not having
| actual money to go anywhere else.
|
| You gotta understand that if you have something that can be
| abused for profits, then it will be abused for profit. Even
| if a company is has a heart of gold and decides not to do
| this, they will be out-competed by companies who are
| willing to do evil things and thus be more profitable.
| Abuse will happen by logical necessity.
| walidthedream wrote:
| New Yorks leads the pack as usual. If you want to understand why
| continental European salaries are mostly low , don't only look at
| the social security cost, but also at the labor law which is a
| middle aged indentured servitude heritage wrapped with worker
| rights bullshit : in France, 3 months notice period, up to 8
| month of trial period, non competes with ridiculous comp. are
| very common for startups and Mid Sized businesses, same as non
| sollicitation, exclusivity clauses (generally all in a combo).
| Plus you get shunned if you job leave your master too quickly (ie
| less than 1 or 2 years depending on sector). And if you get fired
| be prepared for the Wild West of reference checking (nothing that
| can legally protect you from an ex bully who wants you to pay the
| price of daring leaving), loosing full health cover, and so on.
| ResearchCode wrote:
| Does French law mandate trial periods or 3 month notice
| periods? You can usually negotiate those away. Reference checks
| or trial period but you should really not require both, that's
| an employer problem.
|
| Europe pays lower than the US but pays better than other
| regions. There are many countries with low pay and poor labor
| rights. We should try to have high pay and better labor rights.
| dudul wrote:
| Yes the 3 months notice is legally enforced in France with a
| few cases where it can be waived - including both the
| employee ans employer agreeing to skip it.
|
| Note that this notice goes both ways: when an employee
| resigns or is let go.
| hsbauauvhabzb wrote:
| What's a New York noncompete look like? In australia as far as I
| can tell it discusses associated entities - I can't go and work
| for my employers major client directly if I was involved with
| that client during my tenure, but if I've had no association, I
| think I can. There's also caveats around 'right to earn a living'
| if your skillset or specialty limits you to people associated
| with your employer, but as far as I can tell you can go and work
| for a competing company to your former employer, assuming the
| competitor was not your employers client.
| epc wrote:
| I've been under two. One prohibited working with any existing
| clients for a calendar year after my termination date. A second
| prohibited working in a similar role in the US for a year. Both
| applied to employment and not other actions one might do such
| as shorting the former employer's stock.
| vgatherps wrote:
| Quant firms at least are one of the few places where noncompetes
| can make sense. It's an extremely IP sensitive industry with
| stupendously high pay where the employee is going to someone
| probably competing very directly with you, for the same/similar
| opportunities. Actual code + NDAs banning literal
| reimplementations of stuff aren't that valuable, the knowledge
| and ideas will stay in the head of the employees.
|
| The two main issues I have with them are that firms tend to give
| them to just about everybody (instead of just to folks working
| very directly with real IP), and they only pay base salary, not
| something closer to actual total compensation (often multiples of
| the base pay).
|
| Having said that, the quant firm is relatively unimportant and
| not a good reason to prevent a total noncompete law. It's
| probably better to just ban them then try and make allowances
| that aren't full of loopholes.
| gmerc wrote:
| Why does it make sense. Pay employees for their work and
| they'll stick around.
| chiefalchemist wrote:
| To your point, it's ironic that firms who push a free market
| ethos don't actually want to compete. Instead, they want a
| thumb on the scale that tilts the advantages in their
| direction.
|
| Welcome to Crony Capitalism (which should not be confused
| with traditional capitalism).
| js8 wrote:
| The absence of "traditional capitalism" from history makes
| it really hard not to confuse it with "crony capitalism".
|
| Perhaps you mean liberalism, as an ideology of capitalism.
| chiefalchemist wrote:
| Perhaps. But, for example, we didn't always have The Fed.
| We didn't always have WS. We didn't always have "too big
| to fail". We didn't always have taxpayer financed
| bailouts. We didn't always have a top heavy (Fed)
| government (that has more influence than it has common
| economic sense).
|
| At yet all those entities verbally champion "free
| markets" and "capitalism being a superior economic
| paradigm", Etc. Minds get lulled into the repetition of
| the words and stop checking the action. Reminders to turn
| on your BS detectors add some balance. Not much, but
| some.
|
| Fwiw, I'm speaking freely and in broad strokes. If
| liberalism would be a better word then sure, whatever
| helps cut through the BS. Thanks.
| js8 wrote:
| Sounds like you are, in "broad strokes", longing after
| 1870s or something. I think you forgot how crony (or
| crappy?) it was.
|
| What I am saying, if you really want this "traditional
| capitalism", which never really existed, you need some
| mechanism of how to avoid rich getting richer and
| becoming cronies (as they always did). I don't think you
| have an idea what such a mechanism should be.
| chiefalchemist wrote:
| To clarify, crony capitalism is when "regulation" and
| "oversight" are euphemisms for thumb-on-the-scale rules
| that result in a less than level playing field. The
| winners? The cronies.
|
| And back to my previous point about The Fed, etc. We're
| told that those are "for the greater good" (words) but -
| and to your point - the rich are not only getting riche
| (actions),the rate of that wealth transfer (to the top)
| is accelerating.
|
| We can call it whatever you want. And I'm not saying I
| want anything. I was simply pointing out that the
| majority of those - at the top of the financial food
| chain (e.g., WS) - who advocate for "free markets" are
| full of shit. They're lying. So maybe to make you happy
| we shoukd just say: Less Bullshit Capitalism? Will that
| satisify you??
| golergka wrote:
| Offering a contract with whatever stipulations to a
| potential counterparty that he can sign or not sign on his
| own accord is competing. Forbidding your counterparty from
| putting certain stipulations in their contract by using
| government intervention is not.
| chiefalchemist wrote:
| If they limited the vendor's (i.e., employee's) options,
| how is the being competitive?
|
| And if the market colludes to handcuff vendors (to the
| benefit of the hiring companies) how is that being
| competitive?
|
| Employment is already at will, and that is mutual to both
| parties. Why should one side be allowed to purposely
| disadvantage the other side? How is that being
| competitive?
| Xelbair wrote:
| exactly this. Pay them well, and treat them well and they
| will stay. This is just another tool that employers use to
| nickel and dime their employees.
| thedufer wrote:
| The argument against this is that a company spends millions
| of dollars in research to learn something valuable, and
| anyone who didn't spend that money can trivially outbid for
| the employee that knows the results, since they can pay the
| employee some significant portion of the cost of the research
| that they didn't have to do and still come out ahead. I'm not
| sure I entirely buy this, but it's a lot more nuanced than
| "just pay your employees well".
| convolvatron wrote:
| this is the kind of noise you get when you decide that an
| idea is something that can be owned
| cortesoft wrote:
| Then maybe the conclusion is don't spend millions to
| research that type of thing.
| gosub100 wrote:
| Free market for me (to trade securities), but not for thee
| (to trade your skills).
| smabie wrote:
| Free markets allow contracts that are upheld by the
| government though?
| gosub100 wrote:
| I meant "free market" in the sense of open trades on an
| exchange. Except for exigent or criminal cases, it's very
| difficult to undo trades. The "That's not fair"-argument
| doesn't work except for exigent (circuit breaker halt) or
| criminal cases.
| saagarjha wrote:
| What kind of sensitive IP do quants have? How is it different
| than the tech industry?
| infecto wrote:
| General strategies of trading on financial markets. Entirely
| different than working at Google.
| izacus wrote:
| And what benefit does the economy and society get by
| allowing monopolization of these strategies by a single
| company at the expense of basic right for workers to switch
| jobs to the ones that pay them the most?
|
| It sounds so profoundly anti-capitalist - if the knowledge
| of certain strategy is so important, the employee should be
| retained by paying them more and giving them better perks
| instead of enforced labor contract.
| infecto wrote:
| I am not defending for or against not sure why you
| replied to me.
|
| But I think it is slightly silly reading your statements
| knowing that the individuals in that hyper specific
| industry are top earners already and educated to know
| what they are signing up for.
| lordnacho wrote:
| This is exactly the right question. If quant firms make
| the world a better place by tightening spreads - a common
| justification - then wouldn't we get an even better place
| if everyone knew about these strategies?
| durumu wrote:
| A counterargument here is the effects on internal
| transparency. If a quant firm knows its employees can
| leave and join a competitor tomorrow, they will be less
| forthcoming with IP. The lack of openness could lead to
| lower productivity within the firm, as work gets
| duplicated and teams can't share their insights with each
| other.
| eszed wrote:
| As long as we're throwing around generalized hypotheses,
| a company that shared internal IP freely, _and also_
| compensated people such that they didn 't leave, would
| gain a lasting competitive advantage.
| golergka wrote:
| If you can't protect your IP, you don't have a reason to
| develop it in the first place.
| burnerburnson wrote:
| The benefit to society is the same as patents or
| copyright. Companies will be more likely to invest in
| developing new technology if they are confident their
| competitors won't be able to use the result.
| latency-guy2 wrote:
| > It sounds so profoundly anti-capitalist
|
| Only if you have an extremely vague and poorly defined
| definition of "capitalist", which I don't blame you, most
| people are ignorant, and we live in a society that
| prefers to throw out opinions like they're reality.
| tomp wrote:
| I'd say it's the opposite, non-competes (or similar
| agreements) actually _prevent_ monopolisation.
|
| Otherwise, the biggest firms (e.g. Millenium, Citadel)
| could simply "buy out" any already-successful researcher,
| offering them more money (either in terms of % of profit,
| or - more importantly as it scales with size (for many
| strategies) - offering more capital to trade with.
| Dylan16807 wrote:
| > if the knowledge of certain strategy is so important,
| the employee should be retained by paying them more and
| giving them better perks
|
| This particular suggestion breaks down fast when you have
| multiple employees that need to collaborate. If you have
| a million dollar strategy, you can pay half a million to
| an employee as a retention bonus. But you can't pay half
| a million each to 8 employees.
| vgatherps wrote:
| Most tech work is not particularly novel at a technical
| level. Very few services have any sort of massive advantage
| in the technical IP. Some of them might have advantage in
| customer/data analytics, but most advantage is in the idea
| itself as well as being gaining the market and brand. Another
| firm can't just go "Ah, today we'll knock out X new app and
| take 50% of the market"
|
| This is not true in trading. If I go take my
| strategy/forecast and go to a competitor, I can just outright
| take the same opportunities that the other desk was taking
| (to a fairly good approximation). There's no real
| branding/network effect - it's a pure quality of execution
| business.
| xvector wrote:
| Why is that the employee's problem? Pay the employee well
| and they will stick around.
| gorbachev wrote:
| The compensation model in investment companies is such
| that they will not be able to pay employees well compared
| to how much value they bring in, unless you're a partner.
|
| Furthermore the industry attracts the sort of people who
| are never satisfied with what they got, and are always
| looking for more.
|
| Not that I'm advocating for non-competes, just saying
| that you can't address the concerns non-competes are
| attempting to address by "paying employees well".
| Kamq wrote:
| > The compensation model in investment companies is such
| that they will not be able to pay employees well compared
| to how much value they bring in
|
| There's definitely an argument here that those companies
| deserve to be out-competed then.
|
| I'm not saying to ban any of these practices, but the
| legal system doesn't have to guarantee the feasibility of
| companies.
| esafak wrote:
| Why will they not be able to pay them well? Why can they
| not measure it unless you are a partner?
| blueboo wrote:
| If it doesn't make sense in California's Silicon Valley, how
| can it be justified in NYC
| vgatherps wrote:
| Lack of noncompetes is _the_ reason that most trading firms
| have opened offices everywhere except SF
| ffgjgf1 wrote:
| > how can it be justified in NYC
|
| Wouldn't it make a whole lot more sense considering what kind
| of business they are in?
| bachmeier wrote:
| > Quant firms at least are one of the few places where
| noncompetes can make sense. It's an extremely IP sensitive
| industry with stupendously high pay where the employee is going
| to someone probably competing very directly with you, for the
| same/similar opportunities.
|
| So the solution is that employees should only be able to work
| for one employer in their career? I wouldn't disagree with this
| argument if the noncompete came with a payout in the tens of
| millions of dollars.
| infairverona wrote:
| I feel like the solution is to force the company to pay full
| TC (average of previous years + inflation or something?) for
| the duration of the noncompete.
| arrrg wrote:
| In Germany non-competes have a max duration of two years
| and compensation has to be at least 50%.
| caskstrength wrote:
| Living two years on half the salary sucks though.
| ghaff wrote:
| Realistically though, you're never going to have a system
| where it's generally more attractive financially to spend
| a couple years on the beach than to keep working. That's
| a perverse incentive.
|
| But, yes, that's the thing with gardening leave. There
| are certainly some people who would be fine with taking a
| year off at significantly reduced pay--but not the
| majority.
| F-W-M wrote:
| It's a great start into freelancing though. They have to
| pay you 60% of your former salary upto 110% of it.
| vgatherps wrote:
| > I feel like the solution is to force the company to pay
| full TC (average of previous years + inflation or
| something?) for the duration of the noncompete.
|
| It absolutely has to be something like this at a bare
| minimum. The whole "We pay full base" argument is nonsense
| when the TC is multiples of base.
| lordnacho wrote:
| But bonus depends on how the team did plus individual
| perf... politics.
|
| How do you establish what the person would have gotten
| paid?
| snovv_crash wrote:
| Take the average over the last years? If the employer
| doesn't want to pay that then the employee can always go
| work for a competitor, right?
| eszed wrote:
| That's why he suggested "average of preceding years".
| Maybe you allow companies to appeal to reduce the amount
| based on a decline in profits leading to reduced bonuses
| for employees on identical schemes, but... Meh. If they
| want to use non-compete clauses I think they should bear
| that risk. It will make companies think hard about on
| whom they should impose them, which in my opinion is the
| point of creating restrictions.
| stephencanon wrote:
| Right. They can always release them from the noncompete
| if they find it onerous.
| michaelmrose wrote:
| Even this doesn't work because its often the case that an
| employee leaves for a higher salary elsewhere. Instead of
| trying to add epicycles to a stupid system it makes more
| sense to shit can it. There are about 338 million people
| who would benefit whereas the people who truly have
| anything to gain from such a system could all attend an
| event together.
| dan-robertson wrote:
| It's reasonably normal to be more like garden-leave where the
| employee is paid some high percentage of their base salary
| for some amount of time when they may not compete. This can
| still be very expensive for employees who will often have
| bonuses that are a large multiple of their base and so going
| down to base for the duration of the garden-leave.
|
| Some places won't compensate for the noncompete at all,
| others won't compensate if the person works at a non-
| competitor. Some have a mix, eg up to a year of (paid) garden
| leave followed by up to a year of (unpaid) noncompete. If
| someone does leave one firm for another, there is often some
| negotiation, eg maybe the hiring firm agrees not to have the
| person work on certain things for some amount of time
| (potentially longer than the noncompete) and in return they
| can get them sooner.
|
| So one solution is to allow noncompetes so long as employees
| are fairly compensated. It seems hard to discuss improving
| the rules around fairness there if you're a politician
| because quant firm employees are not very sympathetic - it
| looks bad to say they are mistreated when they make many
| times more than lots of other professionals, even though by
| allowing that mistreatment you're effectively giving the
| money to their even-better-off bosses instead.
| amelius wrote:
| > It's reasonably normal to be more like garden-leave where
| the employee is paid some high percentage of their base
| salary for some amount of time when they may not compete.
|
| Some would use that money and time to start a competing
| company :)
| auntienomen wrote:
| Lawyers will advise you not to do this. It exposes you to
| accusations of IP theft and barred competition.
| iancmceachern wrote:
| It worked out for the traitorous 8
| vgatherps wrote:
| > So the solution is that employees should only be able to
| work for one employer in their career?
|
| Yes, I very definitely made this anything remotely resembling
| this argument in my post.
|
| Regardless, it would be a beyond-amazing deal for most
| employees if they got lifetime yearly TC from a quant firm
| only on the condition that they didn't work for a competitor.
| Mindblowingly, shockingly, amazing.
| ffgjgf1 wrote:
| > So the solution is that employees should only be able to
| work for one employer in their career?
|
| What makes you suggest that? If I understand correctly after
| you leave one of the quant firms you end up having to spend X
| months not working in the industry getting base pay. Which
| seems like a very reasonable deal.
| lokar wrote:
| I've seen "hostage exchanges" where two firms wave the
| noncompete (for people already on garden leave) so they can
| start right away. Seems to undermine the idea that sensitive
| IP is at risk.
| hackerlight wrote:
| Non-competes should be regulated so the person is paid a full
| salary (or paid the equivalent of the last year's total comp)
| if the employer wants to enforce it, and have a max duration
| say 1 or 2 years. I don't see a problem if it's done like
| that.
| dragonwriter wrote:
| > Non-competes should be regulated so the person is paid a
| full salary if the employer wants to enforce it, and have a
| max duration say 1 or 2 years. I don't see a problem if
| it's done like that.
|
| That's just employment, so its effectively the _status quo_
| in places with a ban on noncompetes. You can absolutely
| hire someone as an employee, when their only job duty is
| _not_ to compete with you. You can even contract such
| employment for a set term. The problem, of course, is that
| employers want noncompensated noncompetes and at-will, no-
| set-term employment.
| matwood wrote:
| Non-competes have only ever made sense where the employee is
| compensated for signing. Codifying this change would
| immediately make companies stop with blanket non-competes, and
| only have them on key people.
|
| While not impossible, non-competes without compensation are
| already hard to enforce as judges don't look kindly on
| preventing people from earning a living. The problem is the
| asymmetry of power let companies bully and intimidate ex-
| employees.
| vgatherps wrote:
| I mean yeah that's the point I made? FWIW, trading firm
| noncompetes are almost always compensated with the base
| salary and they're still blanket applied. A major contributor
| is that the employer is only paying a fraction of the true
| employee compensation, making it easy to blanket apply and
| creating a form of golden handcuffs.
| thedufer wrote:
| They're not applied as widely as it may seem. The terms are
| typically "up to" the length of time, and in practice firms
| waive 50-100% of the non-compete length pretty frequently,
| which is a decent sign that the cost is non-negligible. It
| is a bit tricky not knowing until you quit how long you'll
| be held to it, though.
| bdowling wrote:
| If judges start to throw out non-compete agreements that
| don't have separate compensation (apart from usually
| salary/experience), then you will just see companies
| explicitly write their contracts such that that X dollars are
| explicitly for the non-compete agreement.
|
| At least in some industries, however, there is a consumer
| protection/public policy argument against non-compete
| agreements, where: (1) there is no legitimate property
| interest to protect (e.g., the "trade secrets" held by the
| companies aren't trade secrets at all because every company
| in the industry knows them), and (2) it is bad for
| consumers/against public policy to allow companies to use
| non-compete agreements to stifle competition where there is
| no legitimate property interest to protect.
| bumby wrote:
| Some states create salary thresholds. For example, Illinois
| law states they won't enforce non-competes for anyone
| making less that $75k or non-solicitation for anyone below
| $45k. However, companies are still protected by non-
| disclosure agreements for important trade secrets.
| diob wrote:
| Yeah, they should be obligated to pay for the length of the
| non-compete. 1 year? Okay, you're paying me for a year.
| amadeuspagel wrote:
| Isn't the same true for SV companies, and aren't they doing
| fine without noncompetes?
| iancmceachern wrote:
| It's often stated as one of the reasons SV exists at all.
|
| So many stories, start with thr traitorous 8
| jampekka wrote:
| Of course can be beneficial for individual companies, isn't
| hoarding up IP an impediment for progress in general?
|
| In this specific industry tough one could argue that impeding
| progress is a good thing for the wider society.
| mhh__ wrote:
| It's hard to forget how this stuff works though. It's just
| theatre.
|
| You obviously shouldn't be able to walk off with a model but
| especially with hindsight I could bang out some models I've
| worked on very quickly as long as the infrastructure was
| amenable
| davedx wrote:
| Eh. Firms quants work for compete with the public market not
| each other. Writing an automated trading strategy isn't
| targeting specific actors, it's trying to convert alpha into
| profit.
|
| I guess there's a weak argument to make for the HF part of HFTs
| Hizonner wrote:
| So they only make sense in an industry that probably shouldn't
| be allowed to exist in the first place?
| caskstrength wrote:
| > Quant firms at least are one of the few places where
| noncompetes can make sense. It's an extremely IP sensitive
| industry with stupendously high pay where the employee is going
| to someone probably competing very directly with you, for the
| same/similar opportunities.
|
| Cry me a river. If knowledge of some particular employees worth
| so much to the quant firms, then they should pay them not to
| leave accordingly.
| sesuximo wrote:
| People sometimes leave and take less money. Plenty of other
| reasons to change jobs.
| helicalmix wrote:
| ...sorry, how much exactly do you think quants make?
| KRAKRISMOTT wrote:
| Mid 6 to low 7 figs usually. They are usually one "tier"
| above SWEs i.e. an average new quant would make the same
| amount as an average mid-level NYC software engineer, in
| absolute monetary terms of total compensation. The high end
| firms like Jane Street and Two Sigma pay the equivalent,
| scaled to FAANG levels. Overall performance of the firm is
| a key factor in the compensation too.
| hamandcheese wrote:
| Knowledge of a secret does not imply that you provide value.
| bobthepanda wrote:
| clearly there's value in the secret if you're making them
| sign a noncompete.
|
| The proposal is just to ask firms to put money where their
| mouths are.
| tester756 wrote:
| He says that just because someone knows a secret, then it
| doesnt mean that he brings value/$$$ to the company
|
| They should pay him 500k just because he knows a secret?
| even if he's making just 50k to the company?
| Clubber wrote:
| They should pay him whatever he would make going
| somewhere else. Expecting someone to not work in their
| career field for 1-5 years and not get compensated for
| that is silly.
| standardUser wrote:
| Obviously companies think it is worth a _lot_ for certain
| employees to be quiet, so they pay accordingly. There is
| no "should" going on here, there is only what the two
| parties agree to.
| mistrial9 wrote:
| LOL - you have stumbled upon the pay grades for security
| and executive management directly ! they absolutely are
| paid more to participate but stay quiet. It is a daily
| requirement.
| jjk166 wrote:
| If someone else would pay them 500k to reveal the secret,
| then yes. Maybe don't give 500k secrets to people
| producing only 50k of value.
| bobthepanda wrote:
| A noncompete has value. If its worth 50k then pay for a
| noncompete equivalent to 50k wages worth of hours. Simple
| as that.
| akira2501 wrote:
| Are you speaking towards the employee or towards the quant
| firm? If the employee has no standing to claim value, then
| why does the underlying business get to?
| bumby wrote:
| Because they own the trade secret. For example, they have
| the legal right to license a trade secret; an employee
| does not. It's about legal ownership of intellectual
| property.
|
| As a corollary, you may read a patent and now have the
| knowledge of a product. But you don't have the same legal
| right to create and sell that product. That right is
| protected by the patent owner.
| SOLAR_FIELDS wrote:
| Of course, that line of thinking involves the inevitable
| follow up: when is something a "copy" vs a "genuine
| invention". If company has a patent on making widget A,
| how different does a previous employee who leaves and
| makes widget B have to be before it's not considered a
| violation?
|
| I am no expert here but my understanding is that the case
| law around this is much more well trodden in patent land
| than it is for noncompetes
| bumby wrote:
| You're right, but there are some nuances that I would
| expect a good law to address. My presumption is that
| trade secrets would have to be covered by confidentiality
| agreements, which are distinct from noncompetes. The
| threshold for infringement of intellectual property is a
| "preponderance of evidence"; i.e., it's "more likely than
| not" or "greater than 50%" so it's not a terribly high
| threshold to prove compared to other sorts of law.
|
| If it's truly patented (different from a trade secret),
| you can't produce it, even if your invention is slightly
| different. For example, if I hold a patent on a "car" and
| you make a "car with a radio," you still can't produce it
| because it infringes on my patent. You can't make your
| product without covering the totality of my claim. That's
| why people try to make patent claims as broad as
| possible.
| master_crab wrote:
| That's not a very good example. A patent is available to
| read specifically because the discoverer has entered an
| agreement with the government to share the relevant
| information in return for exclusive use for a set period
| of time.
|
| If they had not patented whatever it is they had, anyone
| could replicate the information/item in question with no
| penalty.
| bumby wrote:
| > _anyone could replicate the information /item in
| question with no penalty_
|
| Sure, I suppose someone could develop/copy something in
| parallel with no knowledge. But that's not really the
| case in the discussion here as it comes to former
| employees.
|
| If you worked for Company A which uses a proprietary
| algorithm for trading and somehow created the same for
| Company B later, would you really expect a jury to think
| the two are unrelated? As stated above, the threshold is
| "more likely than not" that your work for Company B is
| related to knowing the trade secrets of Company A. If you
| had never worked for Company A, maybe, but again that's
| not the case here because a noncompete would never enter
| the picture.
| master_crab wrote:
| > _Sure, I suppose someone could develop /copy something
| in parallel with no knowledge._
|
| I mean that's a tad disingenuous as to how it worked
| before patents. Patents were meant to dissuade others
| from copying inventions for a certain set period. It was
| much rarer to see independent development of the same
| technology (not that it didn't happen).
| bumby wrote:
| We agree that it's a rare edge case. That's why the
| rationale of IP protection works. Before patents,
| important knowledge was lost because people didn't want
| to divulge it because they had no IP protection. Back
| then, everything was a trade/state secret.
|
| I guess I'm not seeing the point made. If you agree it
| wasn't developed in parallel, you copied it from your
| previous employer. If it was their IP, you likely
| committed a civil wrong, and they can sue you. I can only
| see your point if you don't believe IP exists.
| caskstrength wrote:
| "Secret" should be covered by NDA and/or patented.
| bumby wrote:
| That's the point. If it's covered by an NDA and the state
| declares NDAs unenforceable, there are no NDA-covered
| "secrets." I can get hired, learn all your secrets, and
| then sell my employment to your competitors. That system
| doesn't really work.
|
| In practice, trade secrets are protected by other
| mechanisms. Patents are one of them because, by
| definition, patents are public knowledge so they are no
| longer secret.
| davorak wrote:
| > Knowledge of a secret does not imply that you provide
| value.
|
| If it did not provide value to tell the employee the secret
| then it follows that company would/should not tell the
| employee the secret.
| charcircuit wrote:
| You can work at 2 companies without leaving either.
| bobthepanda wrote:
| presumably the noncompete wouldn't apply then, if the two
| companies were not competing, and then you wouldn't need to
| pay them at all.
| juped wrote:
| to the struggle SWEs who exaggerate your salary on HN and are
| upvoting this comment to the top: please stop and think for a
| second
| bumby wrote:
| Employees don't hold ownership of that intellectual property,
| though. You're speaking almost in terms of a moral right; IP
| rights are legal rights of convention. An employee isn't
| entitled to them in the same way.
| caskstrength wrote:
| Right, and you don't need a non-compete to go after former
| employee stealing your IP.
| bumby wrote:
| Non-competes and NDAs are literally the mechanisms that
| companies try to protect their trade secrets. Patents,
| copyrights, etc cover publically disclosed IP.
|
| The OP was about how non-competes make sense in an IP-
| intensive field, like quant finance. The reason is that
| these contracts help protect the IP by explicitly stating
| their case. Your comment goes against the very foundation
| of IP law: creating reasonably fair commercial
| opportunities. If I can extort you because you hired me
| and I learned your secrets, I think that pushes the
| scales beyond "reasonable."
| olliej wrote:
| No, NDAs are the tool to stop your employees leaking
| information. Non competes are the tools you use to avoid
| paying market price for your employee.
| bumby wrote:
| It depends. Some jurisdictions blur the lines between
| NDAs and non-competes. For example, in many areas NDAs
| can also prevent you from working for a competitor due to
| "inevitable disclosure."
| hadlock wrote:
| If you are making $10 million a year based on an
| employee's personal contribution to the company, and
| paying them $135,000, they are likely underpaid, and
| another company might gladly pay them $250,000 to add
| $10mm to their bottom line. But the non compete holds
| them in the job paying less. Their value to the company
| clearly allows them to pay $250k to that employee, but
| it's the non-compete that is allowing the company to
| profit an additional $120k. There's no case for non-
| compete beyond "excessive profit margins".
| pitaj wrote:
| For those unaware:
|
| Quant = quantitative analyst
| omgmajk wrote:
| Thank you!
| faeriechangling wrote:
| It makes sense for the owners. It doesn't make sense for the
| public that Jim Simon's alone becomes a multi-billionaire off
| exploiting the financial mistakes of ordinary people.
| stillwithit wrote:
| If it's rooted in math none of the IP should be protected. The
| training and definition of axioms and viable algorithms should
| be an open human endeavor.
|
| Letting capitalism dictate what math is public and private is
| pretty fucking draconian
| thatguysaguy wrote:
| Are quant firms positive sum for society? I can imagine that
| some trading leads to goods being priced more efficiently or
| w/e but I doubt the level of alpha these firms are chasing has
| positive externalities. If not, you should shouldn't really
| care about this hurting their industry.
| Goodroo wrote:
| They are a net negative in the sense that you have some of
| the brightest minds in the country working on derivatives
| instead of being in STEM labs
| gumby wrote:
| You highlight a more general problem: the social/economic
| _function_ of finance is to be a service industry to ensure
| there is liquidity available (that other people can use for
| their purposes).
|
| What bugs me is that somehow society lionizes people in the
| money industries over those doing equivalent service jobs
| like gardening, lawyering, much less more important ones like
| garbage collection.
| tomp wrote:
| Quant firms have already adapted years ago.
|
| Now they don't have 6-24m non-competes anymore, but 6-24m
| notice periods. You're paid full salary (incl bonus) but you
| don't work ("gardening leave") and obviously can't work for a
| competitor (because you _can_ have a non-compete _while_ you
| 're employed).
| ghaff wrote:
| So what's the incentive to keep working under those
| conditions?
| tomp wrote:
| I guess bigger and better bonuses in the future?
|
| Like, why would you quite and semi-retire for 1-2 years
| when you can keep working for like 5 years and _actually_
| retire?
|
| (I'm just LARPing, I have been out of the industry for a
| few years by now...)
| ghaff wrote:
| I guess it depends where you are in your career. If
| you're really aiming at a five year time horizon, then I
| can see it making sense to stick around. But, if you're
| yonger a year or two fully-paid vacation sounds pretty
| tempting.
| mancerayder wrote:
| Other than getting paid without working for 6-24 months?
| Did I misread?
| YetAnotherNick wrote:
| I think the GP meant why should you work when you can get
| paid without working.
| dh2022 wrote:
| You could work for a much higher bonus and salary. The
| way gardening leave has been described here is for people
| who are not looking to take their highly valuable
| knowledge somewhere else for higher bonus / salary.
| davidmr wrote:
| In the financial industry, you don't get your bonus when
| you're on garden leave. This is usually the majority of
| your pay, so while it's definitely nice to be paid to do
| nothing (I'm on garden leave currently until next
| September), you're not earning up to your potential.
| ewhanley wrote:
| This seems like the correct and fair implementation of non-
| competes broadly. If companies want leavers out of the
| market, they should be required to pay garden leave. People
| have to make a living, and it's unreasonable to expect them
| to change geographies and/or professions to do so.
| smabie wrote:
| Firms have always payed garden leave tho
| tomp wrote:
| yeah but it used mixed.
|
| E.g. I had 3m garden leave (paid, no bonus) and 3m non-
| compete (unpaid).
| YetAnotherNick wrote:
| Few of my friends are in quant, but I have never heard
| anything like this. Can an employee just apply for notice
| period after a month of joining and be paid 6-24 month of
| salary?
| rsanek wrote:
| The length of paid leave is at the discretion of the
| company, of course.
| YetAnotherNick wrote:
| But can the non compete be longer than paid leave?
| gosub100 wrote:
| I dont think employers have to worry about that when the
| employee works his whole life to be a quant in such a
| competitive industry.
| dh2022 wrote:
| Gardening leave leaves (pun intended :)) the possibility for
| the employee to leave with highly valuable acquired knowledge
| (trading strategies, algorightms, etc...) for a much higher
| salary and bonus than the gardening leave provides. Or maybe
| I am mis-understanding how gardening leave works? Thanks!
| tomp wrote:
| _" Gardening leave"_ just means that during your notice
| period (or part of your notice period), you're not
| "working" in the sense of going to the office, but instead
| you're home ("tending your garden"). The idea is that
| during that time, you're not gaining new knowledge / IP, so
| by the time you actually start working your knowledge is
| several months out of date.
| miohtama wrote:
| > It's an extremely IP sensitive industry with stupendously
| high pay where the employee is going to someone probably
| competing very directly with you, for the same/similar
| opportunities.
|
| Maybe it should not be IP sensitive. It would be the interest
| of public to bring more competition to the quant landscape and
| make their profit margins lower through the competition.
| bumby wrote:
| Importantly, even if noncompetes aren't enforced, trade secrets
| can still be grounds for litigation against a former employee.
| They can't just go from one employer to another and take all
| the secret sauce recipes with them.
| aussieguy1234 wrote:
| I read a story in this article about a person being sued after
| they found another job after they were laid off.
|
| There should be exemptions for non competes when it's the
| company firing or laying off the employee. When a company
| decides to do that, they need to be willing to bear the
| consequences of their decision.
| norir wrote:
| > It's an extremely IP sensitive industry
|
| I know this will not resonate with some, but on some level I do
| not really subscribe to the idea of intellectual property. My
| personal belief is that the brain is more like a radio
| receiver. The ideas are floating out there for anyone to pull
| down. The more sensitive among us are able better able to hear
| what is there and report it back to the rest of us. To claim
| ownership of an idea is to me like claiming ownership of the
| note A or the pythagorean theorem. Of course there should be
| some rewards for introducing novel ideas to the world but to me
| the real reward is the creative experience of bringing
| something into the world that was previously unknown.
|
| In an ideal world, I do not think that hedge funds (or most
| fintech) would even exist. It sort of offends me that we would
| waste our civic resources legally enforcing ip rights. But I
| also understand that my position is far from universal.
| Coherence97 wrote:
| I think your viewpoint is great and poetic. However, since
| most people are not as mature as you, our societies are not
| as mature as you. Meaning that until this fact changes, I do
| not think it is realist to expect someone to give something
| for free when they could make billions with it.
|
| You have to be a saint or already have everything you could
| ever dream of
| bumby wrote:
| This is an idealized notion (but one I wish everyone could
| adhere to). In reality, intellectual property rights were
| considered a necessity for societal progress. Before
| intellectual property rights, many ideas were lost because
| they were guarded too tightly. If that person died, those
| secrets were potentially lost forever and, presumably,
| society would be worse for it. So we developed IP rights as a
| way to share ideas in exchange for exclusive rights to them
| for some time. (This isn't discounting how these laws can be
| perverted to hurt the original intent).
|
| Likewise, trade secrets are a mechanism to help foster better
| (and fairer) commercial practices under the guise that
| society will benefit. It's a pragmatic take rather than an
| idealistic one.
| OscarTheGrinch wrote:
| United States may ban slave ownership and slave owners not happy.
| manicennui wrote:
| Don't worry, we'll still allow you to use prisoners as slaves,
| and we'll make lots of bullshit laws to imprison people.
| mirzap wrote:
| Non-compete contracts should be banned unless the employee is
| compensated for the non-compete period. Period.
| genocidicbunny wrote:
| The employee should be over-compensated. If you were making
| $200k pre-tax at the job, the non-compete agreement should at a
| minimum require you to be paid $200k post-tax.
| switch007 wrote:
| Yup. Put your money where your mouth is
|
| If that person was so valuable, had so much knowledge, had so
| many contacts etc...prove it in the only way business owners
| really understand
| ffgjgf1 wrote:
| I'm sure there are some people who wouldn't mind 6+ months on
| 80% (or so) of pay during which they are are free to do
| whatever else they want
| vachina wrote:
| Sorry if this is a stupid question, how does a noncompete gets
| enforced anyway? Unless you're a person legally required to make
| public your job, I don't see how any private entities can trace
| your work history.
| mangosteenjuice wrote:
| Business owners and managers talk. I've heard of unofficial
| (and very illegal) blacklisting being a thing in NYC in the
| past, for multiple industries.
|
| Collusion between employers to ensure that non-competes are
| enforced sounds very plausible, given that it is legal.
|
| I think that the existence of a non-compete may also be a
| liability for the new employer, and it's not solely a practice
| meant to remind labor of what their place is.
| jawns wrote:
| Companies and government agencies routinely hire PIs to follow
| people receiving disability benefits to gather evidence that
| might indicate they're not as disabled as they attest. You can
| bet that if they're willing to track people over disability
| checks, they're going to use those same tools to enforce non-
| competes.
| drivebycomment wrote:
| Lawsuit is common.
|
| https://www.washingtonpost.com/business/2023/03/10/noncompet...
| ghaff wrote:
| At a senior enough level it's public knowledge.
|
| A lot of sub-industries are also "where everyone knows your
| name" places. I used to be an IT industry analyst (a couple of
| the large firms in which were known--at least at the time--for
| being pretty hard-core on non-competes) and pretty much
| everyone knew what firms other people in their space worked
| for. You could never have gone to a different firm and had your
| prior employer not know.
| currymj wrote:
| i'll post one of my favorite related facts about noncompetes.
| Famously, California bans them, but this was not an intentional
| policy choice for the sake of entrepreneurship. It was done in
| the 19th century and almost by accident.
|
| David Dudley Field II was a jurist who drafted a code of laws
| which was adopted by New York state. After this, motivated by his
| study of English common law, he made an updated code of laws
| which included a provision banning noncompete agreements.
|
| This model code was not accepted by New York, and just floated
| around for a while, until it happened to be on hand when
| California was becoming a state, with nobody thinking much about
| noncompete agreements.
|
| North Dakota also adopted the Field Code and also bans
| noncompetes.
|
| https://www.restrictivecovenantreport.com/2013/01/north-dako...
| _rm wrote:
| Happy accident
| j-bos wrote:
| Would this law apply to a conpany headquartered in NY but
| incorporated in Delaware? Assuming the employee lives in a third
| state?
| greenyoda wrote:
| Usually, the legal rights of an employee are based on the
| location (city, state or country) that the _employee_ is
| located in. (For example, if you 're an Idaho company with
| employees in New York City, you need to pay those NYC employees
| at least the NYC minimum wage of $15/hr.)
| jmyeet wrote:
| Here's my stance on noncompetes: I'm fine with them as long as
| the employee is compensated sufficiently.
|
| Wall Street firms will often have 12 month noncompetes but you
| get paid for that year. Details matter however. Like you might be
| paying for health insurance (COBRA). You won't be getting any
| bonus. Any bonus money in the fund gets removed and put into
| treasuries, which in some years may have a better performance so
| that's a mixed bag.
|
| If Wall Street wants noncompetes, the employee should get paid
| 1.5 times the annual average total compensation they had for the
| previous 2, 3, 4 or 5 years, whichever is best for the employee.
| mortehu wrote:
| > the employee should get paid 1.5 times the annual average
| total compensation they had for the previous 2, 3, 4 or 5
| years, whichever is best for the employee.
|
| Wouldn't everyone quit after having two unusually good years
| back to back?
| jmyeet wrote:
| The company can choose not to enforce the noncompete and thus
| be off the hook.
|
| I see this as an "all or nothing" type thing. When the
| employee quits, the company decides to enforce or not. If
| they enforce, they're on the hook for the entire noncompete
| period. No deciding after a month not to continue
| enforcement.
| GuB-42 wrote:
| The article doesn't address what I think is the most important
| aspect of noncompete agreements: compensation.
|
| In France, and I believe in many other places as well, you can't
| have a noncompete without proper compensation. Compensation is
| relative to how it will affect the former employee career, it is
| usually less than a full wage, but it can be that if it makes
| finding a new job particularly difficult.
|
| There have been a trend at one time of bullshit noncompete
| clauses that were too broad and didn't come with compensation,
| these are not enforceable. If they tried to sue the employee
| (they don't), they would be laughed off by the judge.
| bradleyjg wrote:
| This is a problem in the tech industry but not on Wall Street.
|
| The norm there is paid time off between jobs ("gardening
| leave"). Everyone knows it is part of the system and that a mid
| level or senior hire can't start right away. They also buy out
| still vesting bonuses and the like.
|
| It's quite a civilized system and I think the law ought to
| leave it alone, while addressing abusive ones like we have in
| tech.
| appplication wrote:
| Where do you see this issue in tech? Certainly not CA.
| bradleyjg wrote:
| NY, the subject of the article.
| potatolicious wrote:
| NY, WA, other tech hubs in the US that aren't California.
|
| That said garden leave is not all sunshine and roses like
| OP describes. It's common on Wall Street but a huge part of
| your normal compensation is performance bonuses - and
| typically garden leaves only cover base salary.
|
| A typical garden leave doesn't come close to full income
| replacement for the period. But it's better than nothing -
| which is the status quo in tech.
|
| FWIW American courts also tend to frown on non competes
| that do not compensate for forced unemployment and have
| generally sided with the worker. This is (yet another) way
| that employers deprive employees of their rights by using
| the expense of litigation against them. This is also why we
| need regulation around this - you should not have to fight
| this in court to have your basic rights asserted.
| JJMcJ wrote:
| > which is the status quo in tech
|
| Even severance is usually not much. Typical is one week
| for year of service, minimum two weeks.
|
| Given turnover in the industry, very few people are going
| to get 20 weeks severance.
| ndriscoll wrote:
| At least in software, my base salary is ~2/3 my comp
| right now (ignoring stock growth). If I could take say
| 50% base (so ~33% total) to quit working for 6 months - 1
| year, you bet I'd take that deal. Put me on garden leave
| for as long as you want.
| ghaff wrote:
| How many people do you think are in a position to
| comfortably, even happily, take a 70% pay cut?
| ndriscoll wrote:
| In fields like software or quant finance, I imagine a
| lot? Investopedia says that 200 salary and 500+ total is
| "not uncommon" for a quant, and that even entry level is
| 120-150. At 120k, 1/3 pay puts you at the median personal
| income in the US, which I'd say is a pretty sweet deal.
| At 200, you're close to median household at 1/3.
|
| People in this thread are saying you "only" get your
| base. If they really do get full base pay of 200k, that
| puts them in the 94th percentile to take a forced
| vacation.
| ghaff wrote:
| I don't really disagree in this specific case. Although
| there's also lifestyle creep--perhaps especially in the
| case of living in NYC.
| Spivak wrote:
| Surely anyone looking at such a system from the outside sees
| the economic inefficiency for nebulous gain. Why not do away
| with it and let them start right away?
| bradleyjg wrote:
| If it ain't broke, why are you trying to fix it?
| Spooky23 wrote:
| When this legislation was originally introduced, an Albany
| area Jimmy Johns franchisee got attention for suing former
| minimum wage employees who took the secrets of sandwich
| assembly to a nearby Subway and local deli.
|
| Timing was poor - during the budget season when the entire
| legislature was in town. The notion that a sandwich stop
| should be allowed to restrict the future employment is absurd
| on its face.
|
| Yet there are fields where it makes sense. When I was an
| employee of the government, ethics laws limited my ability to
| leave and sell my services to the government in various ways.
| There are similar scenarios in other industries.
| wslh wrote:
| > When I was an employee of the government, ethics laws
| limited my ability to leave and sell my services to the
| government in various ways. There are similar scenarios in
| other industries.
|
| I think this is more about corruption control than non-
| compete.
| silverlake wrote:
| Garden leave means you get your low base salary but not any
| bonus, which is the bulk of a finance income.
| lovich wrote:
| It doesn't _mean_ that.
|
| It _can_ imply that if garden leave isn't valued by workers
| in the negotiation stage of a position, but that also means
| it could be the bottom right corner of the prisoner's
| dilemma.
|
| Luckily one of the major reasons for the government to
| exist is to create regulation like this to make everyone
| pick the top left square of the prisoner's dilemma so we
| all get a better outcome
| pandaman wrote:
| Do finance firms pay the awarded bonus in full or vest it
| over time like most other business? If latter, I imagine
| you'd get your previously awarded bonus, you'd just stop
| accumulating bonuses to be paid in the future, which makes
| sense since you are going to be working elsewhere at that
| time and the new place's sign up should make up for the
| bonus payment ramp up.
| sgift wrote:
| > It's quite a civilized system and I think the law ought to
| leave it alone, (..)
|
| Or codify it. Imho the better alternative. One should never
| assume that companies won't try to change the system to the
| detriment of the employee if they see a chance.
| bradleyjg wrote:
| One thing I think is great about the finance industry is
| that the CEOs don't pretend that humanity is split into two
| subspecies: executives and peons.
|
| At other companies CEOs secure themselves giant equity
| packages to "retain the best talent and align shareholder
| interests" and then think they can motivate rank and file
| employees with t-shirts, "the mission," and shoutouts
| during all hands.
|
| In finance, CEOs acknowledge that everyone is there for the
| same reason--executives and regular employees alike. The
| numbers are definitely smaller but bonuses are bonuses and
| not employee of the month mugs.
| sgift wrote:
| To be honest, I find this really refreshing in a - to me
| - weird way, cause at least no one lies to themselves or
| the other. It reminds me of what people say about Oracle,
| that it only has one goal: To make money. No bullshit
| about mission or whatever. Why are we at Oracle? To make
| money. The end.
|
| Maybe if more companies and their executives were so open
| with what they want (and maybe I'm cynical, but imho it
| is the only thing at least 99% of them want) things would
| be better.
| zerbinxx wrote:
| Mark Fisher had an interesting comment on this, and this
| is more in the context of public/privatization but the
| point is relevant, calling it "market stalinism". In
| Stalin era Russia, bureaucrats spent enormous amounts of
| time compiling reports and window dressing for their
| project (essentially advertising its success back to the
| Party before it was complete). As a result, projects
| would be well known but mismanaged, slow, broken, etc.
| but the glory of USSR would definitely be upheld. I'm
| always reminded of this when executives get on stage and
| do the Steve Jobs thing about how great we are for
| working nights and weekends for the "mission" while only
| they have a vested interest in us making a profit.
| avar wrote:
| If you (or others) haven't seen it you owe it to yourself
| to see the "Larry Ellison lawnmower" talk:
| https://youtu.be/-zRN7XLCRhc?si=SMpYPck-EJqe1uEv&t=35m00s
| sgift wrote:
| It's where I partially got it from - but thanks for the
| link. The whole conversation just reminded me of it.
| noelwelsh wrote:
| If you operate in a zero-sum game, like most trading in
| financial markets, there is no way you can pretend you
| are contributing to society. There is literally nothing
| else but the money that could be the goal of the
| organization. This does not mean that all organizations
| make no contribution to society. Nobody works at MSF, for
| example, just for the money.
| bradleyjg wrote:
| Sure. But a for-profit startup developing AI on a
| blockchain for pet social media is not MSF.
|
| Moreover even in MSF if the CEO is being paid based on a
| compensation consultant's report of the market rate "in
| order to attract and retain the best talent to advance
| our mission" well then everyone else should be paid on
| the same principle.
| thsksbd wrote:
| Its a terrible system.
|
| If we assume that the financial sector is good for society,
| then a productive element of it is idling causing
| inefficiencies leading to higher fees.
|
| If the assumption is incorrect, then the financial sector is
| not a productive part of the economy. In this case the
| worker's vacation is irrelevant since it's just a
| manifestation of the parasitical nature of it.
|
| Either way normal people are paying for this civilized
| system's largesse.
|
| The truth is somewhere in between. The role of the financial
| sector is to match capital with projects needing capital
| needs. Since the 80s (?) this is an insignificantly small
| portion of modern finance - most of it is parasitical
| sloshing of funds around to either gather fees or launder
| money.
| lovich wrote:
| Do you believe that buffers are a terrible system? Do you
| think that any significant piece of software could run
| without a buffer?
|
| If the answer is no, then you should reconsider thinking
| that garden leave is bad. It's essentially a buffer that
| covers the switching cost for agents needing to decide
| which principal they work for.
|
| If you removed garden leave you'd have a higher up front
| cost for rational actors who needed to account for the fact
| that they could lose their income stream at any moment if
| they were fired
| thsksbd wrote:
| Non-compete + garden leave = important resources siphoned
| off the economy [1]
|
| Remove non-competes, then there's no need for garden
| leave.
|
| If an industry insists it needs non-competes, the dept.
| of labor could issue exceptions with strong penalties (x3
| wages (incld. expected bonuses) for the duration of the
| non/ -compete, etc)
|
| [1] an argument could be made that the more workers are
| put on garden leave the better it is for the economy, vis
| a vis less folks doing damage. Overall, I think the whole
| fintech industry is a waste of STEM talent. Those physics
| PhDs could be something beneficial instead, like being a
| magician at three year old birthday parties.
| ghaff wrote:
| >strong penalties
|
| Sounds like a great incentive to quit the job and hang
| out for the duration of the non-compete. If I can make
| more money by working than not working, I know what I'm
| doing.
| karaterobot wrote:
| From my perspective it sounds civilized, but a friend of mine
| who sat out most of quarantine on gardening leave said he
| found it hard to support his family. You get your base
| salary, but not your bonuses, which are the majority of your
| pay in that industry. And since you can't get another job for
| the duration (or he couldn't, at any rate) it got a bit
| tougher than I would have assumed.
| ghaff wrote:
| Gardening leave--especially if it's not even 100% base
| salary--isn't really a great answer especially to the
| degree that it normalizes non-competes. For a young
| unattached person who will use it to travel the world for a
| year on the cheap? Maybe. But others might be looking at
| _easily_ a 50% total compensation cut and a year+ hole in
| mid-career employment. For most people, it 's not a simple
| matter of "Great, I'll spend a year building a startup!"
| bee_rider wrote:
| The first thing somebody in this sort of job should do is
| establish a 1-2 year savings buffer, right?
| CSMastermind wrote:
| Yes that's basically what everyone does.
| SpaceNoodled wrote:
| No, it's what everyone _should_ do.
| ghaff wrote:
| Yeah, I'd still argue that a MAD system where highly paid
| (and presumably skilled) people need to take a year or
| two off between jobs is pretty inefficient. But if
| everyone knows that's the way things work, no one can say
| they were unaware of the rules.
| CSMastermind wrote:
| Well the reason that this system exists is that there is
| real valuable knowledge that gives these companies
| competitive advantages. The usefulness of that knowledge
| drops off precipitously over time.
|
| So the starting point for the system is that we need a
| way for these highly paid and skilled people to take a
| year or two off between jobs.
| pclmulqdq wrote:
| The signing bonus from your next job should make up for the
| loss of pay during garden leave. Many finance companies are
| willing to hire 12-18 months in advance if you are filling
| a real need.
| bradleyjg wrote:
| This is true of all the situations I'm familiar with. I
| wonder if the other posters are talking about a different
| part of finance.
| danuker wrote:
| > they would be laughed off by the judge.
|
| Still useful for taking advantage of employees not in the know.
| JoeAltmaier wrote:
| Good idea to ban them, then. No issue remains.
| GuB-42 wrote:
| I don't think completely blanket banning noncompetes is a
| good idea either, there are some cases where they are
| justified. We just need rules to make sure that they serve
| their intending purpose (protecting company secrets) without
| negatively affecting employees.
|
| The rule of thumb should be that the majority of employees
| under noncompete should be happy about it (because of the
| advantageous compensation). It is only a problem when it is
| not the case.
|
| Not you can argue about the value of secrecy vs openness to
| society as a whole, but that's another debate.
| caskstrength wrote:
| > We just need rules to make sure that they serve their
| intending purpose (protecting company secrets) without
| negatively affecting employees.
|
| Every time there is a discussion of non-competes on HN
| there is always a bunch of confused people who can't grasp
| the difference between NCA, NDA and NSA. You don't need NCA
| to "protect company secrets" or ensure that people don't
| just steal company's clients or something. Non-competes are
| only needed to depress the wages by making it very hard for
| employees to change jobs, end of story.
| anonymouskimmer wrote:
| NCAs best use is when buying out a business, where the
| prior owner agrees to not create a competing business in
| a defined area for a period of time. This is effectively
| economically neutral, and also serves a sense of justice.
|
| This justification can be extended a bit to people in
| executive management roles at corporations, but for
| regular employees? You either got their salary value out
| of them when they worked for you or you overpaid them. I
| don't see additional societal value to a non-compete
| except in edge cases where an employee quits within a
| short period after hiring - staying just long enough to
| gain skills without generating a corresponding amount of
| value for the company.
| ghaff wrote:
| I'm not even sure how I feel about the executive
| management part.
|
| Yeah, for direct/important enough competitors, I can see
| it. Senior enough management can't help but have
| knowledge of a lot of things that neither the public nor
| most rank-and-file employees don't--and act on it at a
| new place even if they're not sending confidential board
| meeting presentations around. On the other hand,
| execution ability and culture matter for a lot too.
| wslh wrote:
| NCCs are very well explained in [1] and USA has differences by
| states.
|
| [1] https://en.wikipedia.org/wiki/Non-compete_clause
| savanaly wrote:
| Assuming they didn't hide the noncompete clause from the
| employee, and assuming there's not a binding minimum wage in
| effect, the necessary compensation is already going to be
| included. Unless you believe the employee is engaging in
| charity work on the behalf of the employer!
|
| What's the point of a law requiring it? Unless it's an addition
| to a minimum wage law and only in effect for those being paid
| the minimum wage...
| GuB-42 wrote:
| In this case, compensation is not a wage, it is to be paid
| after the employee has left the company but is still bound by
| the noncompete.
|
| Also the employer may have the option of not activating the
| noncompete clause when the employee leaves the company,
| meaning the employee is free and no compensation is due.
| anon291 wrote:
| Don't sign anything when leaving a company and never accept
| compensation. No contract, even non competes, is valid without
| consideration.
| donatj wrote:
| Sometimes I feel like corporations do things just because their
| lawyers are cargo culting and adding clauses because everyone
| else does rather than some logical reason.
|
| My sister worked at Subway and had to sign a noncompete that she
| wouldn't work at another sandwich shop for three years. Are they
| really afraid she's going to steal their secrets of placing meat
| on bread?
|
| The more cynical will certainly assume malice, that the company
| did this to keep you from leaving. It particularly at the time it
| was not hard at all to find new fast food workers, and I am a
| firm believer in Hanlon's Razor and never assume malice when
| incompetence will do. I genuinely think the explanation could
| just be Subway's lawyers were like "everyone else is doing
| noncompetes".
| malux85 wrote:
| Is there a version of Hanlons Razor but instead of
| incompetence, it's money?
|
| I'm a firm believer in that. The clause was probably put in
| there so the lawyers could bill more hours.
|
| I can easily imagine a legal firm noticing a drop in billable
| hours so they start reaching out to existing clients, throwing
| in a bit of fear, saying everyone is putting non-competes in
| their agreements you should too. Boom, all clients get billed
| extra that month, I wouldn't call this incompetence, but greed
| nonethewiser wrote:
| > Is there a version of Hanlons Razor but instead of
| incompetence, it's money?
|
| For businesses, which aim to make money, isnt that simply
| competence? Or greed when taken to an extreme.
|
| Basically "companies will act in their best interest."
| malux85 wrote:
| No, that's too reductive - the behaviour is not solely
| explained by a unidimensional scalar like competence
| because there are actions that a greedy unethical competent
| company would take that another non-greedy ethical company
| would not take - so theres more dimensions than just
| competence.
| fleischhauf wrote:
| also, in case of the billable hours, the lawyers might do
| it due to monetary incentives, but subway might be
| malicious (or have other reasons to do it)
| kuchenbecker wrote:
| Malux razor: Never attribute to incompetence that which can
| be explained by Money.
| DangitBobby wrote:
| Fleecing people for money is malicious though
| bastard_op wrote:
| I'm sure one can find plenty to say about this in the Ferengi
| Rules of Acquisition that probably sum up even our corporate
| insanity best. https://memory-
| alpha.fandom.com/wiki/Rules_of_Acquisition
| fnord123 wrote:
| > Is there a version of Hanlons Razor but instead of
| incompetence, it's money?
|
| Cui bono.
| drhagen wrote:
| I always liked to phrase it as: "Never attribute to
| incompetence that which is adequately explained by
| incentives."
|
| People like Hanlon's razor because it still lets them insult
| people they don't like. "incompetent" and "stupid" work about
| as well as "malicious" and "evil". I don't think anyone will
| ever give a name to a statement so...unsatisfying.
| avar wrote:
| Let's say your sister and her coworker form a union, and Subway
| fires them.
|
| Now they also won't have the legal ability to simply open a new
| sandwich shop right next to Subway.
|
| I.e. you're imagining that non-competes are there to protect
| proprietary know-how.
|
| That's mostly true for some companies, but for others (e.g.
| Subway) it's a wedge guarding them against the collective
| action of their employees.
| oldandboring wrote:
| > it's a wedge guarding them
|
| Anybody reading this from Westchester County, NY will join me
| in chuckling about how appropriate the term "wedge" is in a
| discussion about making sandwiches on long loaves of bread.
| kube-system wrote:
| > you're imagining that non-competes are there to protect
| proprietary know-how.
|
| Legally speaking, that is often the case. Many states require
| a noncompete to have a "legitimate business reason", and
| proprietary knowledge is the most common legitimate reason
| used.
|
| I suspect judges in most states would invalidate a noncompete
| for a sandwich shop worker.
|
| The legal purpose of these clauses is to keep high paid
| workers from stealing customer lists or business secrets. The
| legal system does tend to frown on them being used for rank
| and file.
|
| Many employers just use them as an empty threat to manipulate
| people, because they know few people are going to hire a
| lawyer over it.
|
| I mean, even from a practical perspective, noncompetes are
| pretty weak unless the employee is the kind of person who
| would make the news when they join a new company. You can
| always leave a company and tell them nothing about where
| you're going. A subway franchise ain't gonna hire some PI to
| figure out where a former front-line employee got a new job.
| Hizonner wrote:
| ... assuming a sandwich shop worker had the legal acumen to
| realize that and the financial resources to get it in front
| of a judge and/or to carry it through to completion...
| especially because there's probably also an arbitration
| clause that at least initially puts you in front of an
| arbitrator very much biased in the sandwich shop's favor.
|
| Just having the piece of paper to wave around is valuable
| even if it's totally unenforceable.
|
| Which is why, at a minimum, any lawyer who participates in
| drafting something like that should be removed from the
| profession. And most likely there should be criminal
| penalties for the corporate management involved.
| kube-system wrote:
| Yeah, that's what I meant by
|
| > Many employers just use them as an empty threat to
| manipulate people, because they know few people are going
| to hire a lawyer over it.
|
| These noncompetes do work well as an empty threat.
|
| Although I suspect the majority of sandwich shop workers
| or managers aren't paying any attention to the language
| in their onboarding paperwork, and are just going through
| the motions.
|
| I would like to see limits on this, but I'm not sure
| there's a way to penalize lawyers for this, because they
| often are not the ones deciding who to hand these
| contracts to. Usually businesses have a lawyer draft up a
| general agreement, and then lazy business management just
| hands the same one to everyone from the VP to the
| janitor. That's not really the lawyer's doing.
| hysan wrote:
| > I suspect judges in most states would invalidate a
| noncompete for a sandwich shop worker.
|
| Unless you have the monetary means to bring the issue to
| court (and see it through to the end), any clause like this
| will effectively be a law.
| kube-system wrote:
| That's not the case, very few civil legal disputes go to
| court, particularly if they are BS.
|
| For a total BS claim, it usually doesn't take more than
| calling their bluff. Or just ignoring it.
|
| Employers usually just bet on people just following the
| language and not challenging it because they _think_ it's
| valid and they _think_ they'll have to go to court.
|
| In reality, a business doesn't want to spend tens of
| thousands of dollars on something their own lawyer says
| they're going to lose.
|
| Nobody is taking $12/hr unskilled employees to court over
| noncompetes. Lighting cash on fire is a more efficient
| and fun way to accomplish the same.
| eschneider wrote:
| Employers taking a random ex-employee and throwing them
| against a wall has a nice deterrence effect on the rest
| of their employees. They don't have to win, they just
| have to be unpleasant. Happens all the time.
| pierat wrote:
| First, you're lucky to get $10/hr, no benefits. Of
| course, 29.5h a week, but required to have 60h schedule
| open.
|
| And food service is horrifically abusive.
|
| And yes, the noncompetes ARE enforced, because it's not
| about you - it's about keeping all the employees/slaves
| in line, and knowing there is no other place they can
| turn to working.
|
| This whole thread is so laughable. As a former Subway
| employee, I worked there cause there was nowhere else.
| Pay was a laugh. And if you think there's legal services
| for the poverty masses, then you must be smoking
| something REALLY good.
|
| EDIT: oh look, the -1 brigade of people who had silver
| spoons since birth. Just how many of you climbed from
| homelessness and menial jobs??
| ianstormtaylor wrote:
| > very few civil legal disputes go to court
|
| This is much more often going to be true because the
| dispute was never made in the first place, because of the
| risk it would entail to a low wage worker. They cannot
| afford--for reasons of time, money, health, education--to
| even threaten to take an employer to court.
|
| Your argument sounds logical, but is unfortunately
| unaware of how real world pressures distort systems for
| recourse.
| kube-system wrote:
| I'm aware that they are very useful as an empty threat.
|
| However, the reality here is not likely that a sandwich
| shop employee would have to "threaten to take an employer
| to court".
|
| The most likely scenario is that the hiring manager
| doesn't even realize that boilerplate is in their
| employment agreement. The second most likely is that the
| employer grumbles about the employee leaving and that's
| as far as it goes.
| pxeboot wrote:
| > A subway franchise ain't gonna hire some PI to figure out
| where a former front-line employee got a new job.
|
| No, but they might use The Work Number or a similar
| service.
| kube-system wrote:
| I doubt a hiring manager at a subway is going to do that.
| jjj123 wrote:
| Is it possible it's just about power?
|
| Non-competes make it harder to find a new job. Employers want
| it to be hard to find a new job, since that means it's hard to
| leave your current job even if the pay/hours/whatever is poor.
| habosa wrote:
| Lawyers will attempt to put the most advantageous terms
| possible in any contract they write. It's just what they do.
| It's not malice or incompetence. It's training.
| mydogcanpurr wrote:
| >It's not malice or incompetence. It's training.
|
| Am I really supposed to believe that corporate lawyers don't
| have personal agency? You can defend it however you want, but
| ultimately I believe that people are responsible for their
| actions.
| nostrademons wrote:
| The lawyers are largely copying & pasting. They come up with a
| template that works for most of their clients and then re-use
| it when a new one comes along.
|
| I worked in Massachusetts (which allows non-competes) early on
| in my career, and at one point took my contract to a lawyer. He
| was like "This was written by a California law firm. It has
| clauses that are specific to California law." (One of them was
| that it specifically did _not_ have a non-compete, carved out
| in the contract.)
| FpUser wrote:
| So those supposedly smart people do not realize that said claim
| if followed is like semi slavery? Of course they do. They just
| do not give a flying fuck. Give them freedom and they will sell
| you for organs smiling all the while.
| ravenstine wrote:
| > Sometimes I feel like corporations do things just because
| their lawyers are cargo culting and adding clauses because
| everyone else does rather than some logical reason.
|
| Not sure so much on the cargo culting aspect, but in essence, I
| am convinced that this phenomenon is effectively true.
|
| If corporations were run entirely by lawyers, the likelihood
| that any corporation would take risks that would lead to
| innovation would be approaching zero. Of course, corporations
| without laws would run amok, but that's beside the point. I've
| worked at companies that were absolutely afraid to do anything
| that the legal department found troublesome, holding them back
| from risks that might have been worthwhile and wouldn't have
| been apocalyptic had anything gone wrong. It's a shame to see
| that happen, and I suppose that's why the current paradigm
| needs to keep generating startups in order to drive innovation.
| Though we really haven't been seeing much innovation as of
| late.
|
| There may be some cargo culting of noncompetes, but it seems
| more likely that noncompetes are inherently in the best
| interest of the business from the point of view of the lawyers,
| and businesses see noncompetes as a sort of moat against
| competition. Both are fairly reasonable perspectives, though
| neither is necessarily true in reality, which is why businesses
| don't necessarily have to listen to their legal team on every
| decision.
| j45 wrote:
| Non-competes have always been interesting:
|
| "We are hiring you because you already know how to swing a hammer
| in our industry, but you may not use a hammer for any other
| company who may also have hired you for knowing how to swing a
| hammer"
| caddemon wrote:
| They make sense where there are specific internal secrets, it's
| not just about IC skillset necessarily. But it's true they're
| definitely overused.
| xyzelement wrote:
| It shouldn't be a black and white thing. Someone below mentioned
| a story of Subway (the sandwich chain) giving non competes. That
| seems wrong. On the flip side, a gender fund giving non competes
| to folks who see their strategies seems totally par for the
| course. Somehow the law should prevent one but not the other.
|
| And I say that as someone who has a hedge fund non compete and
| was laid off and subject to that non compete for two years.
| Dowwie wrote:
| Evidently, Obama campaigned on promises to protect low-wage
| earners from employer exploitation using non-competes.
| Politicians seem to be more in favor of advancing non-compete
| protections only for this demographic.
|
| Some good articles about non-compete politics in America and the
| de-fanging of the FTC federal initiative:
|
| https://news.bloomberglaw.com/daily-labor-report/ftcs-noncom...
|
| https://www.bloomberglaw.com/external/document/X3B1QI9O00000...
|
| https://news.bloomberglaw.com/antitrust/ftc-expected-to-vote...
| zopa wrote:
| Non-compete clauses are already extremely difficult to enforce.
| They're traditionally disfavored under common law; get one before
| a judge and it will frequently be struck out, or at minimum,
| sharply limited in scope. But it's not about winning an
| injunction or damages for the employers that use non-competes,
| it's about using the threat of a lawsuit to keep workers nice and
| biddable.
|
| So the bill is well worth doing, just people stop writing
| unenforceable bs into contracts.
| anonymouskimmer wrote:
| Even better would be if employment law violations carried with
| them 3x+ punitive awards instead of just being made whole
| (while also being required to minimize damages by, e.g.,
| getting another job).
|
| If this existed employers would be much more well behaved, if
| only because of the number of lawyers who would suddenly be
| willing to take on lawsuits without retainer.
| pierat wrote:
| GOOD!
|
| Noncompetes without a proper wage commensurate of the position is
| just slavery.
|
| And after the US civil war, a whole lot of slaveowners were also
| really upset in losting their slaves... But even they got
| reparations for losing "property".
| projektfu wrote:
| I think states should regulate the employee relationship a little
| more than they do. There should be standard contracts and the
| idea that a job listing is for a standard contract. If they offer
| you a job, it's for that contract. If they want to deviate, they
| either have to state up front what the additional terms are and
| compensation for them, or negotiate it after the offer is
| accepted. Contracts are not fair if people can't start from an
| equal footing.
| toasted-subs wrote:
| In California you cant legally enforce non-competes but the
| companies seem to do it illegally behind the scenes.
|
| Kind of behavior seems like it should result in government
| intervention.
| sumthingsumthng wrote:
| This was one of the most satisfying headlines of the year.
|
| I hope the whole world will ban noncompete employment agreements.
| I always felt about them like I feel about WallHackers(.exe) in
| Counter Strike.
| cooper_ganglia wrote:
| Noncompete clauses seem like they should be illegal on a
| fundamental level. Regulate industry, not it's laborers.
| olliej wrote:
| I have no problem with non-competes as long as the company is
| willing to buy out the non-compete period, e.g. the maximum of
| current total compensation or competing offer comp, plus say a
| 100% premium to cover opportunity cost.
|
| You might say "that makes non-competes unusable" to which I say,
| it means you'd only use them if you really thought it mattered,
| rather than as a tool for wage suppression.
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