[HN Gopher] FTC announces rule banning noncompetes
___________________________________________________________________
FTC announces rule banning noncompetes
Author : null0ranje
Score : 753 points
Date : 2024-04-23 19:17 UTC (3 hours ago)
(HTM) web link (www.ftc.gov)
(TXT) w3m dump (www.ftc.gov)
| dschofie wrote:
| big news for amazon employees
| ummonk wrote:
| How does this not have any discussion? Banning noncompetes was
| one of the biggest drivers of innovation in California that
| allowed Silicon Valley to outperform other tech hubs.
| smallmancontrov wrote:
| The best time to do this was 50 years ago, but the second best
| time is now. Congrats and thanks to anyone involved in the
| effort!
| mxwsn wrote:
| Why now?
| toomuchtodo wrote:
| Political will.
| chowells wrote:
| Because excesses finally became so ridiculously over the top
| that it was finally politically viable to address it. Remember,
| chain restaurants have started using non-competes to ban
| servers and cooks from moving to another employer. The
| situation is finally in the eyes of the general public.
| SoftTalker wrote:
| That's just absurd. Non-competes should never apply to
| commodity-skill jobs. I wonder how often they were ever
| enforced?
| 0cf8612b2e1e wrote:
| Enforcement does not matter. It is the chilling threat an
| employer can use against someone without options.
|
| If you are flipping burgers for minimum wage and your boss
| says they can sue you if you leave for a competitor, are
| you willing to chance it?
| no_wizard wrote:
| They absolutely were, such in the case of Prudential
| Security[0]
|
| [0]: https://www.cbsnews.com/news/noncompete-agreement-
| feds-sue-3...
| Sohcahtoa82 wrote:
| > Remember, chain restaurants have started using non-competes
| to ban servers and cooks from moving to another employer.
|
| It's so dystopian that this was ever a thing.
|
| Non-competes were supposed to exist to prevent employees from
| bringing trade secrets to competitors. Instead, they were
| used to trap people in poorly paying jobs.
| jprete wrote:
| I had not heard about the chain restaurants; that is one of
| the scummiest things I've ever heard and it angers me that it
| takes place.
| banish-m4 wrote:
| Never forget: college degree requirements, high housing
| costs, union busting, salary secrecy, return to office, sub-
| inflationary raises, 1099 contractors and "temporary"
| permanent workers, outsourcing, H-1B visas, NCAs, and lack of
| universal healthcare are just some of the ways corporations
| lord power over employees to reduce wages and worsen income
| inequality. (Oh and illegal things like wage theft.)
| axus wrote:
| Lina has been pretty busy, but she's been making progress on a
| large backlog of bad corporate behavior.
|
| What were these guys up to? https://www.ftc.gov/about-
| ftc/commissioners-staff/former-com...
| jdminhbg wrote:
| > What were these guys up to?
|
| Not losing in court every other month.
| dpe82 wrote:
| Because we have a Democratic administration that is taking this
| stuff seriously.
| robertlagrant wrote:
| Seriously, though. Why now?
| tech_ken wrote:
| Because that administration needs red meat to activate
| their base ahead of an election cycle
| Overtonwindow wrote:
| Same as student loans. It's election season.
| fckgw wrote:
| Oh no, a sneaky politician trying to win my vote by
| making material changes that improve my life!
| dpe82 wrote:
| New rules take time. Depending on the complexity of the
| regulation it can take a year or two to write (lots of
| internal reviews) and then there's a long statutorily-
| required public comment period during which an agency is
| required to read and address every comment. For this
| regulation, the public comment period appeared to start Jan
| 8, 2023.
|
| You can see the public history here:
| https://www.regulations.gov/docket/FTC-2023-0007/document
| j-bos wrote:
| Election year
| bee_rider wrote:
| Which is good, right? Politicians serving the interest of
| their constituents in the hopes of being re-elected is, like,
| the intended operation of democracy.
|
| If only we could have an election year, every year, without
| all the annoying ads and stress.
| paxys wrote:
| Lina Khan
| fckgw wrote:
| Why not now?
| pylua wrote:
| If I have an existing non compete -- what does this mean for me ?
| Is it invalid?
| bullfightonmars wrote:
| > Instead, under the final rule, employers will simply have to
| provide notice to workers bound to an existing noncompete that
| the noncompete agreement will not be enforced against them in
| the future. To aid employers' compliance with this requirement,
| the Commission has included model language in the final rule
| that employers can use to communicate to workers.
|
| > Under the final rule, existing noncompetes for senior
| executives can remain in force. Employers, however, are
| prohibited from entering into or enforcing new noncompetes with
| senior executives. The final rule defines senior executives as
| workers earning more than $151,164 annually and who are in
| policy-making positions.
|
| > The final rule will become effective 120 days after
| publication in the Federal Register.
| MattSteelblade wrote:
| Going off of the press release, it doesn't go into effect until
| 120 days after publication and doesn't apply to current senior
| executives which are defined as "workers earning more than
| $151,164 annually and who are in policy-making positions." I
| would also imagine that it will immediately be challenged in
| court.
| lokar wrote:
| Sr execs can't start new noncompetes
| 0cf8612b2e1e wrote:
| How does a challenge work? Is the law valid until a ruling
| decides or is it put on pause?
| ixwt wrote:
| A stay on the ruling could happen, but that would be up to
| the courts. Not a lawyer, but considering that there
| _could_ be damages from the removal of non competes and
| someone leaving to get another job, there could be a stay
| on the order rather than letting it go into effect. While
| it works its way up the court system.
| j-cheong wrote:
| I was under the impression that workers earning less than
| $151,164 annually usually don't have noncompetes anyway?
| Sounds like a lot of people will get bucketed into "senior
| executives" group. At least new noncompetes can't be created.
| kube-system wrote:
| I've know places that pay 1/3 of that and have noncompetes.
|
| Although, someone in this type of a role can often get away
| with ignoring noncompetes as long as they're smart about
| how they exit.
| no_wizard wrote:
| >Although, someone in this type of a role can often get
| away with ignoring noncompetes as long as they're smart
| about how they exit.
|
| Simply put though, they shouldn't have to.
| kube-system wrote:
| I absolutely agree, but I make it a point to mention
| their limits of enforceability whenever I can because it
| is information worth spreading for those worried about
| one.
| no_wizard wrote:
| Non competes are everywhere. Famous case with Prudential
| Security[0] where they had everyone sign non competes, that
| includes minimum wage workers, and they enforced them,
| which put an outsized strain on the minimum wage workers in
| particular.
|
| Its a harmful practice across the board.
|
| [0]: https://www.cbsnews.com/news/noncompete-agreement-
| feds-sue-3...
| Animats wrote:
| That's the motivation behind this rule. About one in six
| food outlets were demanding non-compete terms in
| employment, to prevent their employees from quitting to
| work for higher-paying outlets.[1] (Not McD and Burger
| King; mostly the smaller ones.)
|
| [1] https://thecounter.org/biden-targeting-non-compete-
| agreement...
| bretthoerner wrote:
| My attorney friends tell me that the FTC doesn't really have the
| ability to do this, since contract law is part of state law. (My
| poor paraphrasing, not theirs.)
|
| I've been surprised I haven't seen this mentioned on social media
| or in the news. Are my friends wrong, or are people celebrating
| because this is just a step in the right direction even if it may
| not do anything yet?
| aidenn0 wrote:
| It is both true that the FTC's mandate is broad enough to
| include this and that this might get successfully challenged in
| the courts.
| BWStearns wrote:
| Options are also contracts and the FTC seems to have succeeded
| in regulating those.
| yieldcrv wrote:
| the _FTC_ regulates options?
|
| it seems like thats a mixture of the SEC and IRS
| JumpCrisscross wrote:
| CFTC regulates commodities-based options, the SEC
| securities-based ones. The FTC and IRS are not proximately
| relevant.
| yieldcrv wrote:
| I was charitably hoping they were referring to employee
| stock options where their existence is primarily due to
| tax regulations of granting RSUs of illiquid company
| shares, hence IRS
|
| but yes, not at all relevant
|
| its hard for me to understand why people get the agency
| acronyms mixed up and interchanged. I can sort of see it,
| but I've just never seen people be so confidently wrong
| outside of perhaps the eastern medicine crowd.
| fallingknife wrote:
| That's the _C_ FTC
| JumpCrisscross wrote:
| > _FTC doesn 't really have the ability to do this, since
| contract law is part of state law_
|
| The federal government can absolutely regulate both employment
| and contract law. (Merger agreements are contracts. The FTC was
| established to block bad mergers.)
|
| Whether the FTC can do _this_ is untested. But that's more a
| _Chevron_ issue than a federal powers one.
| bdw5204 wrote:
| Relying on a Chevron argument is not particularly wise given
| the pending Supreme Court cases _Relentless Inc. v.
| Department of Commerce_ and _Loper Bright Enterprises v.
| Raimondo_ where the Court is expected to overturn Chevron:
|
| https://www.scotusblog.com/2024/01/supreme-court-likely-
| to-d...
| timeflex wrote:
| Generally federal law will preempt state law. See the Court's
| decisions regarding California's attempt to ban arbitration
| agreements in employment contracts.
|
| Now, that doesn't mean the Supreme Court won't come up with
| their own hot take, but at some point appeals and district
| courts are just going to say no when they send a case back.
|
| What is the Supreme Court going to do? Federal judges can
| only be removed by impeachment of the House and conviction of
| the Senate. The Supreme Court has no power to enforce its
| decisions.
| banish-m4 wrote:
| The odds of the conservative activism SCOTUS siding with
| employees and COTUS (bought off by corporate lobbyists)
| passing a worker-friendly prohibition on noncompetes are
| both zero. OTOH, it's not outside the realm of possibility
| that COTUS might pass a federal law superseding laws in
| California, Colorado, Illinois, Oregon, Nevada, Washington
| state, and Washington DC to roll back states rights
| favoring workers. Similar state bills in NY and NJ died in
| committee in 2022.
| oceanplexian wrote:
| There is widespread bipartisan support for noncompetes.
| NY, a bastion of liberal politics still overwhelmingly
| refuses to make noncompetes illegal.
| toomuchtodo wrote:
| > There is widespread bipartisan support for noncompetes.
| NY, a bastion of liberal politics still overwhelmingly
| refuses to make noncompetes illegal.
|
| NY Governor Hochul vetoed it because she is a hack
| politician and yielded to Wall Street pressure.
| Politicians with a spine (or constitution, if you prefer)
| are in short supply.
|
| https://apnews.com/article/noncompete-agreement-bill-
| veto-ne...
|
| > But in recent months, the legislation had come under
| fierce attack by Wall Street and top business groups in
| New York. They argued the agreements are necessary to
| protect investment strategies and keep highly-paid
| workers from leaving their companies with prized inside
| information and working for an industry rival.
| banish-m4 wrote:
| That's the rule rather than the exception in the US as
| politicians go. Campaign finance reform failed because
| most (not all) politicians are indeed crooks who accept
| gold bars from foreign governments, embezzle from their
| campaign to buy luxury goods, or pay hush money to porn
| stars.
|
| Let me refer you to George Carlin's approach:
| https://youtu.be/xIraCchPDhk
| banish-m4 wrote:
| > There is widespread bipartisan support
|
| At which level(s), or do you mean voters? Voter sentiment
| has essentially no bearing on public policy, and it was
| even proven with data in a Princeton study confirming
| what we already knew. [0]
|
| If I might quote Gore Vidal: _There is only one party in
| the United States, the Property Party ... and it has two
| right wings: Republican and Democrat. Republicans are a
| bit stupider, more rigid, more doctrinaire in their
| laissez-faire capitalism than the Democrats, who are
| cuter, prettier, a bit more corrupt -- until recently ...
| and more willing than the Republicans to make small
| adjustments when the poor, the black, the anti-
| imperialists get out of hand. But, essentially, there is
| no difference between the two parties._
|
| Partisanship tribalism is a divide-and-conquer gambit
| that has been largely successful in keeping Americans
| fighting each other counterproductively and voting
| against their own interests.
|
| 0. https://www.cambridge.org/core/journals/perspectives-
| on-poli...
| HaZeust wrote:
| As Jackson quipped; "John Marshall has made his decision;
| now let him enforce it." We'll see where this goes, and if
| it's honored.
| oceanplexian wrote:
| Chances are extremely high that the current Supreme Court
| nullifies or greatly restricts Chevron. These kind of
| announcements are fuel for the fire and are likely to
| accelerate its demise.
|
| They will kill this faster than they killed the COVID vaccine
| mandate. Govt. agencies can't make laws, even if we may agree
| with them (I actually do in this case). However this isn't
| the role of an unelected government agency.
| xpe wrote:
| It is wise to look at an argument with extra caution when
| you see the phrase "unelected government agency".
|
| There are (of course) valid powers available to agencies.
| The question is what powers are valid.
|
| Beware the dark arts of rhetoric. I'm familiar with
| spotting this one because my constitutional law professor
| used it often. He helped us to see right through it.
|
| Logic and argumentation should win, not words designed to
| scare or muddle.
|
| Intellectually honest comments reveal their fundamental
| guiding moral and political philosophies, rather than
| painting a one sided picture.
|
| Edits done as of 6:30 pm eastern time.
| jameshart wrote:
| Indeed. Government agencies are overseen by officers of
| the United States, appointed by the president with the
| advice and consent of the senate, typically to terms
| greater than the length of either a presidential to
| senate term.
|
| Just like Judges.
|
| The idea that courts are the only delegates of the
| elected representatives of the people who are allowed to
| figure out the nuances of how to carry out the
| democratically legislated responsibilities of government
| is a bit of a brainworm that has infected US politics and
| makes the Supreme Court a little too important.
| mminer237 wrote:
| The Supreme Court often dismisses cases for the entire
| reason that constitutionally it can't make laws. That's
| Congress's job. It's fair to be critical of how much
| Congress can punt its responsibility to a 4th branch of
| government with little oversight.
| xpe wrote:
| > Govt. agencies can't make laws
|
| This is an unfortunately common response that often misses
| the point: U.S. government agencies do indeed have the
| power to make decisions with the force of law. Rule-making
| is a valid authority (subject to legal review of course)
| yieldcrv wrote:
| The federal government has the constitutional right to regulate
| interstate commerce, and 100 years ago it discovered that all
| commerce is now interstate commerce, followed by the supremacy
| clause which is selectively applied (ie. not for scheduled
| drugs, but for everything else)
|
| This Supreme Court could be friendly to invalidating that
| expansive interpretation though
|
| so, big mismatch from the executive branch / agencies with the
| judicial branch which could completely warp our relationship
| with the Federal Government and what we find familiar in our
| way of life
|
| But I dont think its as simple as saying "contract law is part
| of state law"
| timeflex wrote:
| The Supreme Court doesn't have any power to enforce its
| decisions. District and Appeals Courts could just say no to
| their decisions and there isn't much they can do.
| Animats wrote:
| > The Supreme Court doesn't have any power to enforce its
| decisions.
|
| Sure it does. US Marshals are the muscle of the court
| system. They enforce federal court orders when necessary.
| hnburnsy wrote:
| Not agreeing, but just posting the other side of the argument
| from the US Chamber of Commerce. Not a fan of legislation by
| fiat, maybe this will prompt Congress to do something. USCoC
| said they will sue...
|
| https://www.uschamber.com/finance/antitrust/chamber-comments...
|
| >The Chamber and its membership are strongly opposed to the
| Proposed Rule. It would categorically ban nearly all noncompete
| agreements--regardless of individual circumstances, such as a
| worker's skill, job responsibilities, access to competitively
| sensitive and proprietary information, bargaining power, or
| compensation--and require that organizations rescind all
| existing agreements and provide notice to affected workers of
| such rescission. Such a proposal fails to recognize that
| noncompete agreements can serve vital procompetitive business
| and individual interests--such as protecting investments in
| research and development, promoting workforce training, and
| reducing free-riding--that cannot be adequately protected
| through other mechanisms such as trade-secret suits or
| nondisclosure agreements. For centuries, courts have recognized
| the procompetitive benefits of noncompete agreements and
| balanced those benefits against any negative costs imposed by
| particular noncompete agreements. As perhaps acknowledged by
| the Commission's request for comments on narrower alternatives,
| the Commission's categorical ban would sweep in millions of
| noncompete agreements that pose no harm to competition, and in
| fact benefit the U.S. business community, economy, workers, and
| consumers.
|
| https://www.uschamber.com/finance/antitrust/u-s-chamber-to-s...
|
| >The Chamber will sue the FTC to block this unnecessary and
| unlawful rule and put other agencies on notice that such
| overreach will not go unchecked.
| relaxing wrote:
| Interstate commerce is broadly recognized to include just about
| anything.
| mbreese wrote:
| Where I am, I know people who are under noncompetes that have
| a geographical clause. You can't leave to join a competitor
| within X miles. In my part of the country, that would include
| at least three states (maybe more), but other locations would
| include many more.
|
| So, yeah, seems like at least those non-competes impacts
| interstate commerce.
| kube-system wrote:
| You're conflating two different things.
|
| The reason those geographical clauses are in those
| contracts is because many states have ruled that non-
| competes are illegal _unless_ they are limited in some ways
| to be "reasonable", and one common way states courts
| measure this is by ensuring that they are limited to
| something that might be a reasonable 'business area' that
| the company competes in. Corporate lawyers typically write
| in the exact radius that state courts have historically
| enforced into their non-competes to avoid them being
| disqualified for being too broad.
|
| "Interstate commerce" on the other hand, just means any
| sort of business activity that crosses state lines.
| Basically every business engages in interstate commerce,
| just because commerce requires many interstate activities,
| like using the internet, or accepting electronic payments,
| or ordering supplies made in a different state.
| robertlagrant wrote:
| It may have the ability to, but it's not really anything to do
| with trade.
| SkyBelow wrote:
| If growing food for your own use is interstate commerce,
| contract law is interstate commerce.
| Buttons840 wrote:
| Ask your attorney friends if a farmer growing food on their own
| land to feed to their own animals is "interstate commerce", and
| ask them to explain that to you.
|
| What I'm referring to here is Wickard v Filburn in which the
| Supreme Court ruled that a farmer growing food on his own land
| to feed to his own animals was participating in "interstate
| commerce" and could thus be regulated by the federal
| government.
|
| This is a big part of why the federal government can control
| things like which plants you are allowed to grow in your home.
|
| But when the FTC tries to regulate something like non-competes
| and protect average workers the corporate attorneys come out of
| the woodwork, "oh no, the federal government can't do that!"
| modeless wrote:
| The difference here is that Congress isn't banning
| noncompetes. The FTC is doing it. Different branch of
| government.
| nojito wrote:
| Congress established the FTC.
| mminer237 wrote:
| People seem a bit confused. There are a few separate
| legal questions here:
|
| 1. Whether Congress can ban noncompetes nationwide
| through its ability to regulate interstate commerce.
|
| 2. Whether Congress can say "so-and-so can make any laws
| he wants about x".
|
| 3. Whether this is in scope of the FTC's mission of
| preventing unfair trade practices.
|
| To me, #1 is a clear no for intrastate agreements, but
| under _Wickard_ it is constitutional.
|
| #2 is yes under _Chevron_.
|
| #3 seems an obvious yes.
|
| The only question would be if SCOTUS decides now is the
| time to correct what it sees as prior incorrect
| decisions.
| mike_hearn wrote:
| Is it the same people? It seems like the current Supreme
| Court is very much against decisions like the weird farmer
| one and likely to roll such things back.
| unyttigfjelltol wrote:
| Your friend may recall that the FTC occasionally acts against
| "deceptive" conduct in the marketplace. If you read the
| relevant law, it also can act against "unfair" conduct.[1]
| Sometimes people forget there are _two_ words there separated
| by "or".
|
| This would be an example of an "unfair" practice, which mostly
| are about predation in the context of unequal bargaining
| position when litigated under "Little FTC Acts"[2]. I don't
| know offhand whether these similar laws have been used to
| achieve the same thing state-by-state, but the FTC rule meets
| the straight face test for sure. So, regardless of what happens
| next at the Federal level, this is about to become a white-hot
| area of litigation under state "Little FTC Acts".
|
| [1] https://www.law.cornell.edu/uscode/text/15/57a
|
| [2] https://litigationcommentary.org/2021/06/15/a-fresh-look-
| at-...
| xbar wrote:
| It is a good question. I am glad that the FTC is testing it.
| jameshart wrote:
| If a noncompete agreement between a former employer, and a
| person who resides in a particular state, purports to prevent
| that person from taking up an employment contract with another
| employer - including by one who is located in a different
| state... well that seems like that could be an unfair restraint
| on interstate commerce.
| xpe wrote:
| I'm not a constitutional scholar, but I'll say this --- there's
| a reason this one is debated. It seems to me (with around 70%
| probability) that there are many possible constructions that
| could emerge which would more or less conform to the (rather
| contingent) bar for Supreme Court decisions.
|
| I say contingent because the history of the Supreme Court is
| far from a deductive process of pure interpretation.
|
| I recognize the utility of the Supreme Court while dismissing
| any grandiose claims of objective morality or obvious legality.
| It is a body of people after all.
| fidotron wrote:
| > Under the final rule, existing noncompetes for senior
| executives can remain in force. Employers, however, are
| prohibited from entering into or enforcing new noncompetes with
| senior executives. The final rule defines senior executives as
| workers earning more than $151,164 annually and who are in
| policy-making positions.
|
| Lot's of devs will be surprised to discover they are in policy
| making positions.
| BeefySwain wrote:
| New policy: no more non-competes
| azinman2 wrote:
| Unlikely they are in a policy making position.
| ascendantlogic wrote:
| You're missing the subtle sarcasm here. OP is implying that
| companies will deem engineers making $150k+ as making policy
| decisions in order to continue enforcing the existing non-
| competes they have most likely signed.
| fidotron wrote:
| I wish I was being sarcastic! IME the sort of people
| putting non-competes in contracts will claim things like
| "programming is simply the act of defining company policy
| in machine form".
| andrewstuart2 wrote:
| I'd imagine that would be considered a role change and a new
| non-compete, and thus forbidden. That's definitely how I'd
| approach it if someone told me I was suddenly an exec. "Sweet,
| sounds good. Send over the new employment contract, then! With
| a 10% raise, of course."
| buildbot wrote:
| Yep, this would impact basically any dev at Microsoft, Apple,
| Facebook, etc. From my own point of view (at MS), policy making
| decision do basically happen at my/our level too, unless policy
| is on the tier of "buyout Infection.AI talent". Any kind of
| planning research/work could be considered policy. Decisions
| like what kind of framework or listing to use? Policy!
| lamontcg wrote:
| I suspect that "policy-making positions" is a term of art that
| is more narrowly defined than it looks and that it'll actually
| be difficult or impossible to abuse it enough to made it apply
| to SWEs. Most likely big 4 accounting firms have a definition
| of what that means and it is part of accounting and auditing
| standards. At any rate they'd need to first abuse it to apply
| to managers who are below VP levels.
| cryptonector wrote:
| It's defined in the rule...
| jejeyyy77 wrote:
| everyone who had a noncompete should be compensated.
| datadrivenangel wrote:
| The rule goes into effect 120 days after it gets published in the
| federal register, and at which point all previous non-competes
| are unenforceable EXCEPT for senior executives.
|
| Senior executives cannot enter into new non-competes though.
| DebtDeflation wrote:
| How is Senior Executive defined? C-Level only? Named Executive
| Officers on the 10-K?
| BeefySwain wrote:
| > The Commission also finds that instead of using noncompetes to
| lock in workers, employers that wish to retain employees can
| compete on the merits for the worker's labor services by
| improving wages and working conditions.
|
| I absolutely love this.
| gffrd wrote:
| Hogwash! I demand a free market for my business, but a closed
| market for my assets.
| paxys wrote:
| Privatized gains, public losses. It is the capitalist way.
| QuiDortDine wrote:
| I didn't know the FTC was this savage lol
| kevstev wrote:
| I do too and it feels to some extent that its about sending a
| message. I worked at Citadel, and they had these posters about
| Integrity, Winning and being a meritocracy and all that but
| their ever more constraining non-competes completely flew in
| the face of it and it was upon them putting one of those
| agreements on me that I started to become disillusioned with
| the firm (around the same time that I found that Ken Griffin
| was donating to Trump's campaign).
|
| I tried to negotiate to get them to at least agree making the
| non-compete periods pay out my full comp and not just base, but
| they absolutely refused to budge an inch. Some people I knew
| there had non-competes locked in at their base salary when they
| started, which in some cases was 10+ years ago, meaning that it
| was a relatively paltry amount. They also had a clause in them
| that stipulated that it was 100% at the discretion of the firm
| as to whether they would enforce it or not- meaning that it
| wasn't even a guaranteed paycheck if you left... they would
| decide- and only after you left or were fired- if they were
| going to enforce it, leaving you in limbo until they made their
| decision.
|
| F non-competes. Mine worked out okay, my wife got burned hard
| on them and it took her career at least 2 years to recover from
| hers.
| a_wild_dandan wrote:
| This is a stunning change. We already have a uniquely strong
| economy. If the US keeps trending toward tackling anti-
| competitive behavior, we may avoid a downturn for quite awhile!
| ein0p wrote:
| Anyone can have a "strong economy" if they can print $2T a
| year. The question is for how long.
| nerdright wrote:
| This is pretty big given the current stagnant job market. I
| expect a lot of startups to come from this change.
| cjen wrote:
| This seems incredibly important. I know non-compete rules
| personally held me back at a previous tech job.
|
| I'm interested to see how this hits finance firms - I know people
| who were forced to take a year off between jobs (although they
| were compensated the whole time). Always thought that would be a
| pretty sweet deal.
| kevstev wrote:
| I was subject to one as well, but it was just on my base, not
| total comp, which was not the majority of my compensation. And
| while my base was fine, it was more or less explicitly stated
| that this was meant to make it painful for employees to leave
| and had almost zero to do with any special information the
| employee had.
| lokar wrote:
| They have other tricks. My comp was about 80% bonus, most of
| which went into deferred comp for a few years. If I was to go
| to a competitor without permission (independent of the non
| compete) I would forfeit the deferred comp.
| 0xbadcafebee wrote:
| Reject the handcuffs. Once enough people do, they will stop
| making it deferred. They know that if you're willing to
| reject the money, you're willing to leave (the handcuffs
| aren't keeping you there), and that scares them.
| lifeisstillgood wrote:
| But at a certain point that deferred comp is "enough" that
| if you just go to work each day and hide in the loos it's
| worth waiting around and collecting the cash. And the
| company won't benefit from a mostly checked out workforce
| lokar wrote:
| Worse. The next employer will just repay you. They all do
| this, so no one really gets and advantage, but they all
| pay.
| CydeWeys wrote:
| The bar is quite high at these kinds of companies. If you
| let off the gas and try to coast like that, you'll just
| get fired and thus lose the deferred comp that way.
| jbullock35 wrote:
| I'm not sure that I understand. What does it mean for a
| noncompete to apply only to base compensation? Is the idea
| that if you join a competing company within X months of
| leaving your old company, you need to repay your base salary
| to the old company?
| o_nate wrote:
| No, it just means that during the period after you stop
| working at the old job but before you can start working at
| the new job, you are paid only your base. This can be a
| significant reduction in total comp in industries such as
| finance.
| bluGill wrote:
| I have worked jobs where the best bonus over 5 years was
| $500, while the typical year all we got was a promise
| that if things go well there will be a bonus. I've worked
| other jobs where the worst bonus was $15000 (a really bad
| year for the company), and could be up to $50,000. This
| is as a regular engineer, management can get a lot more.
| The first company taught me at until the money is in my
| account the bonus is meaningless. The second taught me
| that they aren't just a rumor. Most companies don't even
| pretend to offer a bonus which is acceptable - at least I
| know what I will make.
|
| I think everyone should make 2-3x the poverty level
| income (we can debate exact numbers), and everything
| after that is bonus. So long as the company pays a bonus
| most years it means in a bad year you have enough to live
| on and don't need to find a new job, while in a good year
| you have a nice bonus to buy nice toys.
| bee_rider wrote:
| I think they are saying that the compensation they their
| previous employer paid them to _not_ work for the
| competition for a year was based on their salary, not their
| salary plus bonuses, so it was not as good a deal as it
| sounds.
| cryptonector wrote:
| It means that GP was paid their _salary_ for the non-
| compete time. In finance it is common for total
| compensation to be the salary plus a "bonus" of 100% of
| salary in normal years + any performance bonus. This means
| that if you had a non-compete in the finance industry and
| you left your employer for a competitor, then your previous
| employer could pay you your _salary_ (meaning 50% of your
| usual compensation) to not work for that competitor for a
| year.
|
| (These numbers are typical of finance industry compensation
| and non-compete terms.)
| AlotOfReading wrote:
| It's worth noting that the so-called "garden leave" you're
| describing usually doesn't come with things like bonuses. That
| may even be a majority of your compensation depending on the
| role.
| coldpie wrote:
| > I know non-compete rules personally held me back at a
| previous tech job.
|
| Yeah. Remember this when you go to vote in November. Elections
| matter.
| cryptonector wrote:
| Is this rule a partisan issue?
| lotsofpulp wrote:
| I have yet to see a Republican led government advance
| banning of non competes (or really anything that benefits
| W-2 workers as a whole) in the last 25 years.
|
| Washington (Democrat led), I think, most recently passed a
| non compete ban for those under a certain salary, but I
| cannot think of any Republican led states that have
| advanced such legislation, or espoused views that they want
| to.
|
| It falls in line with similar worker friendly legislation
| passed by Democrat led states such as longer family leave,
| paid sick and family leave, higher unemployment benefits,
| higher minimum wages and minimum salaries for exempt
| workers, eliminating non tipped minimum wages, and
| publishing of salary ranges on job listings.
|
| Edit to respond to below:
|
| Is it partisan in California? If anything, I would have
| thought the California non compete ban is the most un-
| partisan issue since it has been in place since 1872, so
| neither of today's parties would be credited with it.
| cryptonector wrote:
| I've yet to see this be a partisan issue anywhere.
| CharlieDigital wrote:
| Tends to be because it's ostensibly pro-labor and one party
| tends to favor pro-labor policies and the other tends to
| favor pro-business policies.
| coldpie wrote:
| Yes.
|
| > The vote on the final rule, which fell along party lines,
| with three Democratic commissioners voting in favor and the
| agency's two Republicans voting against
|
| https://www.forbes.com/sites/mariagraciasantillanalinares/2
| 0...
| cryptonector wrote:
| What about elected officials?
| lumb63 wrote:
| Another interpretation is that the ruling party is bribing
| people now that election season is ramping up by passing
| rules it knows has no standing in court, but won't get shot
| down until post-election. Imagine all the people who voted
| for Biden thinking he would absolve them of the contract they
| willfully entered to pay their student loans. This is not
| much different. It is another group of people who have
| contracts they wish they didn't have relying on government
| overreach to save them rather than not having put themselves
| in the position to begin with.
| aidenn0 wrote:
| I personally believe that lack of non-competes was one
| ingredient for Silicon Valley becoming what it is.
| gpderetta wrote:
| It was! https://en.wikipedia.org/wiki/Traitorous_eight
| MiddleEndian wrote:
| >I know people who were forced to take a year off between jobs
| (although they were compensated the whole time). Always thought
| that would be a pretty sweet deal.
|
| If a company wants to pay someone not to work for a year,
| they're free to do that whenever they want. Maybe without
| noncompetes, they'll have to pay more to make it worth it for
| the guy being paid to sit around!
| cryptonector wrote:
| We'll have to see what the finance industry does. My guess is
| that they will only make sizeable counter-offers to key
| employees, and the employees will not be forced to accept
| them and typically won't. In the long run there might not
| even be sizeable counter-offers to key employees.
|
| EDIT: Er, the FTC explicitly does not comment on garden
| leave:
|
| > With respect to garden leave agreements, as noted
| previously, commenters used the term "garden leave" to refer
| to a wide variety of agreements. The Commission declines to
| opine on how the definition of non-compete clause in SS 910.1
| would apply in every potential factual scenario. However, the
| Commission notes that an agreement whereby the worker is
| still employed and receiving the same total annual
| compensation and benefits on a pro rata basis would not be a
| non-compete clause under the definition,350 because such an
| agreement is not a post-employment restriction. Instead, the
| worker continues to be employed, even though the worker's job
| duties or access to colleagues or the workplace may be
| significantly or entirely curtailed. Furthermore, where a
| worker does not meet a condition to earn a particular aspect
| of their expected compensation, like a prerequisite for a
| bonus, the Commission would still consider the arrangement
| "garden leave" that is not a non-compete clause under this
| final rule even if the employer did not pay the bonus or
| other expected compensation. Similarly, a severance agreement
| that imposes no restrictions on where the worker may work
| following the employment associated with the severance
| agreement is not a non-compete clause under SS 910.1, because
| it does not impose a post-employment restriction.
|
| My guess is that garden leave will be offered, but in right-
| to-work states there will be no way to enforce that the
| employee remains employed.
| andthenzen wrote:
| Page 83-84 provides some guidance on garden leave and suggests
| that it will still be allowed under the new rule:
|
| > With respect to garden leave agreements, as noted previously,
| commenters used the term "garden leave" to refer to a wide
| variety of agreements. The Commission declines to opine on how
| the definition of non-compete clause in SS 910.1 would apply in
| every potential factual scenario. However, the Commission notes
| that an agreement whereby the worker is still employed and
| receiving the same total annual compensation and benefits on a
| pro rata basis would not be a non-compete clause under the
| definition, because such an agreement is not a post-employment
| restriction. Instead, the worker continues to be employed, even
| though the worker's job duties or access to colleagues or the
| workplace may be significantly or entirely curtailed.
| Furthermore, where a worker does not meet a condition to earn a
| particular aspect of their expected compensation, like a
| prerequisite for a bonus, the Commission would still consider
| the arrangement "garden leave" that is not a non-compete clause
| under this final rule even if the employer did not pay the
| bonus or other expected compensation. Similarly, a severance
| agreement that imposes no restrictions on where the worker may
| work following the employment associated with the severance
| agreement is not a non-compete clause under SS 910.1, because
| it does not impose a post-employment restriction.
| yyhhsj0521 wrote:
| I am currently on one of those deals by working for an HFT,
| then taking a competitor's offer. It is really very nice. From
| a wealth-accumulation POV, I am losing out a lot of earning
| each month I'm not working, but I am still paid a very cushy
| six-figure salary that covers a comfortable lifestyle for my
| family plus decent savings. I value my time at prime working
| age much more than the net worth I potentially lost. I have
| been able to travel, hone hobbies, start and finish personal
| projects, just help out my wife, and much more. Honestly I
| don't want it to end.
| michtzik wrote:
| How does health insurance coverage work during the garden
| leave period?
| yyhhsj0521 wrote:
| There is the option to COBRA. I just switched to be on my
| wife's insurance.
| plyp wrote:
| Since you are still employed by your previous firm during
| garden leave you are still covered by your employer's
| health insurance policy. I'm also on garden leave at the
| moment and that's how it works in my case.
| bagels wrote:
| I was denied a job I was well qualified for because,
| (paraphrased, besides the quoted part): Our CEO and your CEO
| have a "gentleman's agreement" not to hire people that work at
| eachother's company.
|
| I have no idea why the recruiter was willing to put this in
| writing, and thankfully, I was able to find other work instead.
|
| I know it's not a non-compete, but there are other ways that
| companies can illegally form cartels to suppress labor.
| whaleofatw2022 wrote:
| I saw this happen to a colleague in the fiber industry, it is
| very back room dealy.
| timf wrote:
| The U.S. Chamber of Commerce is likely to file suit:
| https://www.uschamber.com/finance/antitrust/chamber-comments...
| macintux wrote:
| I suspect this won't survive a challenge in front of the
| current Supreme Court, unfortunately.
| arcticbull wrote:
| It'll be interesting to see what happens. It does sound like
| this clearly falls under interstate commerce, so within the
| scope of Fed action. Is there something that makes you think
| otherwise? Beyond court composition, that is.
| Uvix wrote:
| That this is coming from the executive branch, not the
| legislative branch.
| arcticbull wrote:
| Sure, but FTC was authorized by congress (FTC Act 1914)
| to "prevent unfair methods of competition and unfair or
| deceptive acts or practices in or affecting commerce"
| which seems pretty cut and dried? I may be missing
| something, this just feels pretty reasonable.
| ixwt wrote:
| You're missing the fact that the current Supreme Court
| has been doing everything they can to kill Chevron
| Deference.
| cogman10 wrote:
| Yup, this is very much the key to why I think this will
| be killed.
|
| This supreme court is very much on track to eliminate any
| authority federal agencies have that aren't explicitly
| written into law. Effectively destroying federal agencies
| ability to make rules.
| iamthirsty wrote:
| > This supreme court is very much on track to eliminate
| any authority federal agencies have that aren't
| explicitly written into law. Effectively destroying
| federal agencies ability to make rules.
|
| Very dramatic. Really, it's a reaction to Federal
| Agencies -- unelected governmental representatives --
| unilaterally making their own rules out of the gray
| areas.
| runako wrote:
| > it's a reaction to Federal Agencies -- unelected
| governmental representatives -- unilaterally making their
| own rules out of the gray areas.
|
| Eliminating Chevron will trade "unelected governmental
| representatives" who work at Federal Agencies like the
| FTC with "unelected governmental representatives" who are
| work for Federal Agencies that are the US Courts.
| Progress?
| cryptonector wrote:
| > Eliminating Chevron will trade "unelected governmental
| representatives" who work at e.g. the FTC with "unelected
| governmental representatives" who are paid by the US
| Court system. Progress?
|
| Where do you get that from?
|
| Reversing Chevron will mean that Congress will have to
| work harder to get the regulations that it and the
| Executive want. If Congress were not disfunctional that
| would be a very good thing. And heck, reversing Chevron
| might well function to help Congress function more
| normally.
| macintux wrote:
| Republicans originally celebrated Chevron _because_ it
| took regulations out of the courts ' hands.
| cryptonector wrote:
| Did they? I wasn't there. But a reversal of Chevron
| doesn't necessarily mean that the courts get to do what
| they like. It may mean that the courts simply get to gut
| the bureaucratic state and kick the can to Congress --
| that what's not forbidden by statute is allowed rather
| than that the courts act as regulators. There will be
| lower courts who will want to push their role as
| regulators, but the SCOTUS seems uninterested in playing
| that game given its "major questions" doctrine.
|
| It would be very strange for the court to create the
| major questions doctrine then impanel itself as the
| ultimate regulator.
| ixwt wrote:
| Which is what Congress created them to do. And they are
| appointed, which the appointers _are_ elected. In
| essence, they are elected, through the elected
| representatives which themselves are elected.
|
| This is like saying that the US President is an unelected
| governmental representative. The population actually
| votes on a Representative for the Electoral College (EC).
| The Representatives in the EC then vote for President and
| Vice President. And yes, the EC Representatives are voted
| for because they say they will vote for a particular
| candidate (and as we figured out in 2012, many states
| have laws penalizing EC Representatives who don't vote
| how they committed to).
| iamthirsty wrote:
| > This is like saying that the US President is an
| unelected governmental representative
|
| No, that's not how that works, ironically because in the
| name -- Electoral College -- the President is, elected.
| Regardless by the populous or not.
|
| Appointees are politically chosen, yes _by_ a
| representative, but usually with major political leanings
| built into the rules they make, with little to no
| oversight.
| cryptonector wrote:
| The SCOTUS had its "federalism revolution" in the 90s,
| and it ended in the Raich case when Scalia decided that
| leaving drug policy to the States was too much.
|
| Under current precedents all the State decriminalization
| of marijuana and other drugs that we've seen are all
| unconstitutional. It was the liberal justices + Scalia
| who made it so. Those State laws decriminalizing various
| drugs are being tolerated by the feds -- for now.
|
| The federalism revolution and its opposite both cut both
| ways.
|
| On the whole I would prefer that the court resume its
| federalist revolution, even though some results I
| wouldn't like.
| ixwt wrote:
| And the current Supreme Court is not a huge fan of
| Chevron Deference, which this certain falls under...
| jfengel wrote:
| From a purely meta point of view:
|
| This was something passed by a Democratic administration.
| Therefore Republicans hate it, and since 2/3 of the Supreme
| Court is Republican, it's likely to be struck down.
|
| The actual reasoning comes later. Something-something-
| Federalist-Papers-something. I'm sure they'll have no
| trouble digging up some Founding Father who said something
| that sounds like banning this, if you squint right.
|
| I know a great many lawyers, of both parties, who have more
| respect for the Supreme Court than I do. They are more
| informed and better educated than I am, so you should take
| my cynicism with a grain of salt. But in my experience,
| treating the Supreme Court as a partisanship machine yields
| extremely accurate predictions.
| gamblor956 wrote:
| _I 'm sure they'll have no trouble digging up some
| Founding Father who said something that sounds like
| banning this, if you squint right._
|
| When this country was founded, a lot of its residents
| were slaves, so I'm sure Thomas and Alito will find
| plenty of fodder in that for their "originalist" stance
| denying workers rights.
| cogman10 wrote:
| Interstate commerce would allow congress to make such a
| law. However, the real question will be if congress gave or
| intended to give the FTC the authority to perform this
| action.
|
| This supreme court has been very down on federal powers, so
| it really would not be surprising if they pulled "the major
| questions doctrine" to ultimately kill this off.
| cryptonector wrote:
| > Interstate commerce would allow congress to make such a
| law. However, the real question will be if congress gave
| or intended to give the FTC the authority to perform this
| action.
|
| That's my take as well. There is almost certainly no
| doubt that the commerce clause (under current precedents
| since the 30s) gives _Congress_ the authority to make
| legal rules like this one. If there be doubt here then it
| will be about a) the ability of Congress to delegate this
| power with b) such a vague and all-encompassing term as
| "unfair" to describe the practices that the FTC may
| regulate, and/or c) whether this particular rule violates
| the "major questions" doctrine found in the recent W.
| Virginia vs. EPA case.
| JumpCrisscross wrote:
| > _suspect this won't survive a challenge in front of the
| current Supreme Court_
|
| It may be aimed at prodding the Congress into action.
| zer00eyz wrote:
| I am not entirely sure.
|
| Without anti compete stealing your competitors staff becomes
| a valid business strategy. Buy up the competitions best
| people and cripple them.
|
| This favors those with the most capital not the least.
| akira2501 wrote:
| It also favors workers. By increasing salaries. And forcing
| companies to compete for them.
|
| Labor is a market. It is too often ignored in favor of
| private equity concerns.
| cogman10 wrote:
| I believe it will die more because of the
| originalist/textualism of the supreme court rather than
| considerations to which big businesses benefit (or are
| harmed by) this the most.
|
| The question will ultimately arise "by what authority can
| the FTC make such a sweeping judgement" and it would not
| surprise me to hear the SC rule that this is an overstep of
| the authority they were given by the laws creating and
| maintaining the FTC.
|
| Previously, the FTC could have argued that the chevron
| doctrine gives them this right. However, that is almost
| certainly about to be completely abolished this term.
|
| The right of contract is almost certainly going to be more
| important to most members of the supreme court than any
| other considerations. That's my 2 cents.
| cryptonector wrote:
| "Unfair" is an awfully vague term. This rule might be a
| test of the recent "major questions" doctrine. The SCOTUS
| appears poised to reverse the Chevron doctrine, which
| would have given the FTC a great deal of cover here.
| There are a lot of reasons that the Court might reject
| this rule or even the FTC's authority in general.
| triceratops wrote:
| I'd love for my company's competitor to buy me up. Shit let
| them all go to war for the privilege of employing my ass.
| bluGill wrote:
| I doubt you are that valuable. Sure software developers
| are high priced, but without even knowing what company
| you work for I bet I can do your job at a competitor and
| after 3 years I'd be just as good - that is worst case
| when I have to learn a new programming language to expert
| level as well as the domain. There are only a few people
| who have special skills that it is even worth thinking
| about protected. Someone who hires you away from a
| competitor gains at most a couple months vs hiring
| someone with similar skill who doesn't work for a
| competitor (and thus doesn't have domain knowledge).
| tech_ken wrote:
| > This favors those with the most capital not the least.
|
| So does the US Supreme Court lol
|
| More seriously I think the issue is going to be whether
| it's executive overreach, not whether it's good or bad for
| a competitive marketplace.
| dwaltrip wrote:
| Interesting how you call it "stealing" to hire someone who
| worked at a competitor. They aren't property, companies
| don't own people.
|
| If you don't want to them to leave, then entice them to
| stay.
|
| Getting rid of noncompetes puts workers and companies on
| more even footing, reducing the large power difference.
| zer00eyz wrote:
| >> They aren't property, companies don't own people.
|
| Ideas aren't property and they are stolen. You can steal
| a glance as well, but you know that has nothing to do
| with property either.
|
| I also could have used the colloquialism poaching, but
| then I would be hearing about how people aren't big game
| and hunting is bad.
|
| > Getting rid of noncompetes puts workers and companies
| on more even footing
|
| We already know it doesn't have to:
| https://forums.appleinsider.com/discussion/185051/judge-
| appr...
|
| That fine was probably minor compared to the wage
| suppression.
|
| > If you don't want to them to leave, then entice them to
| stay.
|
| Poaching all the staff away from a company is illegal in
| CA, it's called raiding. This change will not create laws
| out of thin air.
| cryptonector wrote:
| > Without anti compete stealing your competitors staff
| becomes a valid business strategy.
|
| And how would that not be an "unfair business practice"?
| Vague legal terms are problematic.
| no_wizard wrote:
| Given that these rules are very similar to those in
| California, and California has a big enough economy to be a
| good representative sample, I don't see this being a real
| issue.
|
| Otherwise, why aren't well capitalized competitors in
| California hiring up the best people at their competitors
| and crippling competition, as it were? We just don't see
| this happen on a large scale like this suggestions.
|
| Now, that's my take on it at charitably. My honest opinion
| about it is simply: who cares. If you want people to stay,
| give them reasons to stay that aren't the legal equivalent
| of holding a gun to their head
| zer00eyz wrote:
| >> Given that these rules are very similar to those in
| California...
|
| CA has a corresponding law that prevents this. The last
| time I looked the FTC wasnt creating at NEW law to
| prevent the other side of this coin:
|
| Rule 3: Workforce "Raids" Are Illegal in California
|
| Technically, poaching employees is not illegal in
| California, but restrictions on workplace raids are
| mentioned in the legislation. In fact, state law
| prohibits companies from acting in bad faith to solicit a
| mass amount of employees from their competitors to
| intentionally hurt their business. This is called
| "raiding," and when your competitor does it, you can file
| a tortious interference claim against them. Most of these
| cases require an employment contract to be successful in
| pursuit of damages.
|
| FROM: https://www.flclaw.net/is-poaching-employees-
| illegal-califor...
| no_wizard wrote:
| I did say similar, not exactly. There may or may not be
| some effective law preventing this type of thing
| _specifically_ , but in my mind, this is an edge case[0]
| and doesn't detract from my overall point, which is that
| eliminating non competes will overwhelming not end up
| with this being a plausible scenario.
|
| [0]: that the California government anticipated and
| defined, to their credit
| cryptonector wrote:
| If the SCOTUS overturns the Chevron doctrine, then this rule
| and probably all of the FTC's authority is on thin ice until
| Congress passes an act that says something more substantial
| and significantly less vague that "unfair business
| practices".
| seanw444 wrote:
| Which would be great. These agencies and bureaus have grown
| to an enormous scope, completely without the consent of the
| governed. Doesn't sound like a republic to me.
| fabianhjr wrote:
| I thought that non-governmental business association was pro-
| competition; guess not.
|
| Edit: it was a dig to the pro-competition facade some pro-
| business people put forward.
| sailfast wrote:
| They are pro-business (and maintaining the rights of
| businesses to control their labor force), not pro-
| competition.
| DamnableNook wrote:
| Why would you think that? Lobbying organizations exist to
| advance the interests of their members. Their members in this
| case are businesses. This will restrict the control
| businesses have over their former employees. Therefore, they
| don't like it.
| supercheetah wrote:
| Needs a /s.
| nerpderp82 wrote:
| Total aside, but I think it is ridiculous that CoC larps as a
| quasi governmental organization. When in actuality it is a
| Union of Capitalists.
| lotsofpulp wrote:
| I don't get that appearance. Their website does not end in
| .gov and their about page does not indicate they are an
| official agency:
|
| https://www.uschamber.com/about
| bogwog wrote:
| I have heard the name "US Chamber of Commerce" before, and
| as someone who isn't a politics/government nerd, I always
| assumed that was some kind of government organization
| responsible for something...commerce related.
|
| Clicking through to the website and seeing the kind of
| articles on there makes it pretty obvious that's not the
| case though, even ignoring the .com domain.
| 0xbadcafebee wrote:
| It's the largest lobbying group in the USA. It was
| created by Taft to fight organized labor. It's a core
| part of the Republican party, though it will diverge in
| the interests of capitalism. They denied climate change
| until 2019.
| ZeWaka wrote:
| I think people get that idea due to most cities also having
| chambers of commerce with lots of influence, sponsoring and
| hosting events and such.
| CalChris wrote:
| Yes, it was started by Taft as a business 'union' that the
| government could deal with. Now they're funded primarily by
| multinationals and so they place the concerns of those large
| corporations first and well before upstart startups.
| robotnikman wrote:
| It's about time! Nice to hear some good news for a change!
| benced wrote:
| I suspect this is bad for California, its lack of noncompetes was
| a huge differentiation for a while.
|
| (how bad? I don't know.)
| dbcurtis wrote:
| Eh.... any impact will play out over a long period of time.
| Everything interesting happens on the margin, so I do agree
| with you that CA's laws around non-competes has had a
| beneficial impact on new business formation, and contributed to
| CA's economic growth. If this gets fully implemented, it will
| level the playing field with other states, but it will take
| some time (a decade would be my bet) for the impact to be fully
| felt.
| ballenf wrote:
| I'd guess it will have the opposite effect as companies have
| one less big reason to avoid CA.
| benced wrote:
| The reason no non-competes has helped CA is increasing
| startup formation. California has shown over the last 30-50
| years that startup formation > attracting legacy businesses
| for growth. Unless that changes, California becoming less
| differentiated for startup formation but getting more legacy
| businesses is a bad trade for California.
| Gibbon1 wrote:
| One of the biggest issues I have with economists theory of
| comparative advantage is it ignores the self sustaining
| ecosystem aspects of economics.
|
| Some places if you need someone to do specialized thing X
| you can just walk down the street. Most places you'll need
| to find someone willing to move and and take a big hit on
| his career options. So that deep bench of skilled labor and
| business resources is a big deal.
| bschmidt1 wrote:
| It's not bad when people are copying you, it signals that
| California is ahead of the curve on the issue and - upon
| further examination - others too like decriminalization of
| cannabis including removing it from background checks and drug
| testing for most employment, as well as certain tenant _and_
| landlord rights other states don 't have.
|
| Some of those non-competes were ridiculous with their _" in
| perpetuity throughout the ends of the Universe"_ type wordplay,
| I'm surprised governments haven't been more vigilant on things
| like the stifling of entrepreneurial mobility, since it only
| helps their economies in the long run to do so.
|
| Make it possible to disrupt, design economies for entrepreneurs
| as much as for corporations, and reap the benefits IMO. Let
| those big evil uglies get disrupted if they can't stay relevant
| or retain top talent.
| banish-m4 wrote:
| It's not. California isn't the only municipality to have banned
| NCAs.
|
| https://natlawreview.com/article/state-law-restrictive-coven...
| bagels wrote:
| Noncompetes for fast food workers are totally unconscionable.
| kylestlb wrote:
| whoa, that existed? sheesh
| bagels wrote:
| Yes. It's totally repulsive, and has no reasonable
| justification to exist.
| Bluecobra wrote:
| Yes, Jimmy John's did this and got in trouble:
|
| https://www.reuters.com/article/idUSKBN13W2J9/
| throwaway74432 wrote:
| Does anyone know the history of noncompetes? It seems like a case
| of Tacit Collusion[1]. But if there is no competitive advantage
| to the noncompete, how did it catch on?
|
| 1. https://en.wikipedia.org/wiki/Tacit_collusion
| whitej125 wrote:
| Does this change a lot for many people?
|
| This doesn't mean you can scurry off a just build a competing
| product/service to your existing employer. You probably also have
| NDA and/or IP agreements too.
|
| > The Commission found that employers have several alternatives
| to noncompetes that still enable firms to protect their
| investments without having to enforce a noncompete.
|
| > Trade secret laws and non-disclosure agreements (NDAs) both
| provide employers with well-established means to protect
| proprietary and other sensitive information. Researchers estimate
| that over 95% of workers with a noncompete already have an NDA.
|
| Trade secrets would generally include anything from code,
| approaches to problems, product roadmaps, customer lists, etc (so
| spans not only engineering... but also product, sales, etc).
| SoftTalker wrote:
| I've often wondered how often noncompetes get
| enforced/litigated.
|
| I had to sign a noncompete once, in order to get a severance
| package when the company was going out of business. I asked a
| lawyer about it, who said don't worry about it, there isn't
| going to be anyone who will ever enforce it.
| MOARDONGZPLZ wrote:
| A buddy of mine worked in a niche industry and their
| noncompete didn't allow them to go to competitors, even to do
| something different and in an arm of the competitor that was
| not directly competitive with the company. The company spent
| a lot of time and resources suing people and threatening
| litigation. Enough so that employees desire to leave and
| still work in the industry was chilled and the competitors in
| the industry started becoming very reluctant to hire from my
| buddy's company.
|
| It was pretty messed up and this rule fixes that awful
| situation.
| saagarjha wrote:
| You already cannot use trade secrets from your last job at a
| new role. That's in pretty much every single employment
| agreement, spelled out clearly. That does not mean you cannot
| go work for a competitor and do something new there.
| lotsofpulp wrote:
| Removing the risk of legal consequence simply for changing who
| you sell your labor to is a big change for many people.
| TheCleric wrote:
| Yes, as this eliminates the threat of lawsuit I've had made
| against me for just changing jobs (multiple times).
| kube-system wrote:
| Noncompete clauses have often been used by employers to scare
| their employees into thinking they'll be sued just for simply
| finding a new job at a different company.
| LeifCarrotson wrote:
| Full text of the ruling here:
|
| https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete-rule...
|
| It's not surprising after thinking about it for a minute, but it
| did startle me to read that the FTC measures innovation by the
| number of patents issued.
|
| > _In addition, the final rule is expected to help drive
| innovation, leading to an estimated average increase of 17,000 to
| 29,000 more patents each year for the next 10 years under the
| final rule._
|
| I've always thought of that as representing a stifling of
| innovation.
| nerpderp82 wrote:
| I'd say the number of patents filed and granted by _practicing
| entities_ of small to mid-size would be a pretty good measure
| of innovation. I think patent fees and complexity should be
| progressive, esp if you have working hardware and don 't just
| flip the patent to a troll.
| akira2501 wrote:
| > I've always thought of that as representing a stifling of
| innovation.
|
| The short lifetime of patents and the requirement that you
| publish detailed information about the invention significantly
| mitigates this. If they were measuring innovation by the number
| of copyrights filed, then I might agree with you.
| sanity wrote:
| Depends on the industry, 20 years is a lifetime in software.
| crote wrote:
| In theory? Yes. In practice? No.
|
| For a lot of industries 20 years is an _awfully_ long time to
| the point of complete irrelevance - and that "detailed
| information" is often vague enough to be unusable. Combine
| that with an overly-broad range of patent-able things and an
| overworked USPTO granting clearly invalid patents, and in
| practice (at least in the tech/software world) it's doing
| more harm than good.
|
| Patents are no longer about protecting R&D investments. They
| have become more about patenting the vaguest concepts
| possible, in the hope of making a profit when someone else
| does an _actual_ invention which somehow stumbles into your
| patents ' wording.
| kiba wrote:
| _Patents are no longer about protecting R &D investments._
|
| Patents are always the tool of the moneyed and the
| lawyered, which is not the same thing as protecting R&D
| investment. There are exception, such as the guy who spent
| 12 years suing car companies over the windshield wiper, but
| that actually proves the rule because of time spent. It
| even apparently cause his marriage to break down. [1]
|
| 1. https://en.wikipedia.org/wiki/Robert_Kearns
| infotainment wrote:
| Definitely agree -- software patents should be abolished,
| full stop. They serve no purpose but to impede innovation
| and progress.
|
| I'd argue the same applies to all patents; the world would
| be better off without them in general.
| ClumsyPilot wrote:
| > overworked USPTO granting clearly invalid patents
|
| Well no system can work that way - if judges in court were
| overworked and making invalid judgements, then the legal
| system would fail no matter what kind of laws you have and
| no matter what police does
| freeopinion wrote:
| These are pretty strange arguments. Why should an
| overworked USPTO lead to more patents? That assumes that
| the default is to grant the patent. If the default is to
| reject the patent, then an overworked office would not
| lead to more patents.
|
| An overworked Supreme Court does not lead to more Supreme
| Court decisions.
| ClumsyPilot wrote:
| I think we are mixing up two different ideas
|
| Suppose an institution is overworked, it has two options
| - long queue or rush the job.
|
| Courts understand their role is important, so you have a
| long wait, but they d0 the job properly.
|
| Patent office, perhaps, rushes the job. Now whether they
| issue too many or too few patents is maybe equally bad,
| in my view, it's screwed up either way.
| danaris wrote:
| The problem is, it is in the interests of the wealthy and
| powerful that both those things be true--that the USPTO
| be so overworked they can't adequately review most
| patents, _and_ that the default be to grant the patent.
|
| And the wealthy and powerful use that wealth and power to
| influence how government functions.
|
| Thus, the current situation.
| wongarsu wrote:
| "short lifetime" is relative. Had Apple been granted a patent
| on the idea of a smartphone the same year they released the
| iPhone, that patent would only expire in three years.
|
| There are some industries where due to slow-moving markets
| the 20 year patent period is still sensible, but for most
| sectors we would be better off with a 5 or 10 year patent
| period to account for the increased speed of innovation.
| bluGill wrote:
| Apple did not invent the smart phone. The invented several
| features that make them useful (even their version one
| lacked apps), but others made smart phones before them.
| What Apple really did was make them useful by eliminating
| several of the things that made them annoying not not
| useful before.
| Nevermark wrote:
| They didn't say Apple invented the iPhone. That was a
| counterfactual example to make a point.
|
| Also, the point counts even if Apple just patented enough
| to block comparable phones.
|
| The point: For the smartphone market, 20 years would be a
| very long effective time for any foundational or
| gatekeeping patents.
| paulmd wrote:
| > What Apple really did was make them useful by
| eliminating several of the things that made them annoying
| not not useful before.
|
| that's literally every patentable invention ever, though.
|
| Remington didn't invent the hunting rifle... they didn't
| even invent the first self-loading or lever action rifle,
| probably.
|
| "removing the annoyances and downsides that make a
| previous approach infeasible or impractical" is more
| charitably described as "a useful innovation that
| advances the field".
|
| Now, the _problem_ is that a lot of patents are issued
| for things that someone else already has done, so the
| recipient of the patent isn 't actually advancing the
| state of the art. But on the face of it, "removing the
| annoyances and downsides that make a previous approach
| infeasible or impractical" is literally what patents are
| supposed to be granted for.
| cryptonector wrote:
| > The short lifetime of patents
|
| 20 years is not short! 20 years might be appropriate for
| capital-intensive innovations (e.g., in pharma), but
| definitely not for industries where innovations are not
| typically capital-intensive. E.g., 20 years for cryptography
| and software patents is a disaster.
| _aavaa_ wrote:
| In theory maybe, but in practice it seems like the opposite.
| The current growth of the 3D printer market is in part
| directly tied to the lapsing of several key patents in the
| area.
|
| Further, most patents may contain key details, but they also
| intentionally contain as much broad information as to create
| a massive exclusionary zone, not to mention burying any
| legitimately useful information.
| EasyMark wrote:
| How is the lifetime of patents short? I mean they last for 20
| years, that's an entire generation of time to make a profit?
| fsckboy wrote:
| for software patents they should have to disclose the
| sourcecode
| pictureofabear wrote:
| FRED has a good blog post on measuring innovation.
|
| https://www.stlouisfed.org/open-vault/2021/june/how-to-
| measu....
| reaperman wrote:
| Text of the rule itself starts on page 561, "XIII. Other
| Matters"
| ajb wrote:
| Both things - that the number of patents measures innovation,
| and that they serve to stifle it, can be true at the same time.
| Under a fixed patent regime, the more innovation there is, the
| more individual patents are necessary to stifle it. Of course,
| if we allow the patent regime to vary, then if it changes to
| make patents easier to acquire then that means less innovation.
|
| However, it's true that this property - of being a valid
| measure, but interventions to change it having the opposite
| effect on the inferred variable - is a very unfortunate one in
| a metric.
| bmicraft wrote:
| It'd put it like this: the more patents there are, the
| (exponentially) more "innovative power" you need to achieve
| the next one.
| crakenzak wrote:
| > leading to an estimated average increase of 17,000 to 29,000
| more patents each year
|
| Insane to me that they use this as a measure of innovation,
| when almost by definition it is the antithesis of innovation.
| adastra22 wrote:
| What definition is that? Because the legal definition of
| patent I'm familiar with requires each patent to be a unique
| innovation.
| vkou wrote:
| What objective metric would you recommend they use, instead?
| ClumsyPilot wrote:
| Productivity improvement in a physical application - it now
| takes fewer people less time to build a house
|
| It takes less resources to remedy a failed over bridge.
| You'd have to have a basket of measurement like how we
| measure CPI - current approach is lazy.
| BobaFloutist wrote:
| What if an innovation makes things better, instead of
| faster?
|
| The house takes just as long to build, but it's sturdier,
| longer lasting, better insulated, etc?
| ClumsyPilot wrote:
| Well those are all measurable quantities, and you can
| measure them in proportion to their economic importance -
| like house insulation is a big change if you live in cold
| climate, etc.
|
| I am not saying it's easy, but economics is full of
| complex measurements, financial derivatives, and god
| knows what. Maybe they should spend some effort measuring
| the real world.
| no_wizard wrote:
| Wonder ultimately how this will be handled once the _Chevron
| Deference_ case is ruled on by the Supreme Court. The
| interpretations I 've seen from other sources is that this will
| be overturned if the courts decide against the principle
| cratermoon wrote:
| They do stifle innovation when one company locks up a huge
| portfolio of them. Forcing the employees who came up with the
| patentable ideas to sign non-compete agreements prevents them
| from working on anything related to those inventions elsewhere.
| l33t7332273 wrote:
| I feel like, much like BMI, patent volume can be used to
| measure a population.
|
| Sure, for any individual's fitness or a company's
| "innovativeness" they are useless, but in aggregate they can be
| revealing.
| mrandish wrote:
| > I've always thought of that as representing a stifling of
| innovation.
|
| Sadly, over my long career as a tech startup entrepreneur, my
| experience has been that your assumption is correct the vast
| majority of the time. Now when I teach or mentor young tech
| entrepreneurs I'm often explaining why they probably _don 't_
| want to prioritize filing patents as part of their startup
| strategy. While there are certain exceptions, especially in
| pharma, biotech, materials science or medical fields, the years
| it takes for a patent to become enforceable and then the
| upfront cost + further years required to actually get a
| judgement, make patents largely ineffective in most startup
| contexts. There's also substantial uncertainty as to whether a
| startup can get the patent granted at all. After that, there's
| the challenge of getting it granted in a form which remains
| defensible and can't be easily worked around. Many people don't
| realize patent examiners can refuse to grant a patent unless
| the applicant narrows the claims.
|
| Conversely, as a tech startup these days you do need to worry
| about patents potentially being used against you. The majority
| of tech patent cases are giant vs giant fighting over turf, a
| large incumbent trying to kneecap an emerging startup
| competitor (usually filing suit to make the startup
| unattractive to investors for a year and never intending to
| actually go to court) or patent troll vs everyone. Personally,
| I had both a giant trying to stop my startup's Series A funding
| and several patent trolls. Despite having no actual merit, the
| giant's suit did freeze our Series A and we nearly died. After
| seven months we'd demonstrated we could survive without a
| Series A so they dropped the suit (of course) but by then
| they'd cost us more than half our cash in just defending an
| obviously sham claim. As one investor told me, "Yes, it's
| clearly a bullshit claim but it will still cost serious money
| and a lot of founder attention over the next 18 months to get
| it thrown out and that, unfortunately, tips this deal over our
| risk threshold." And responding to the constant patent trolls
| just burns up startup founder attention and scarce cash in
| nuisance legal fees.
|
| Despite the old-school trope of "garage inventor patents
| invention, makes fortune", frankly, from the perspective of
| fostering typical tech startups, you'd probably prefer a world
| where there were no patents outside of pharma, medical, bio,
| etc.
| oceanplexian wrote:
| Pardon my language but the patent thing has turned into a
| dick measuring contest, and serves no useful purpose.
|
| When I worked at FAANG you had a whole class of PE engineer
| who literally couldn't build anything to save their lives.
| But they would constantly file patents with a frenzy like IT
| guys rack up certifications. Of course when the patent office
| gets an application from $FAANG they approve it. And people
| who aren't in the know just see patent on the resume and keep
| hiring these people thinking they are the next Elon Musk or
| something, unfortunately.
| aidenn0 wrote:
| I am 100% for this, but it makes me sad that the legislative
| branch has nearly completely abandoned its duty to pass laws in
| favor of granting the executive branch the authority to regulate
| just about everything.
|
| This is a problem for two main reasons:
|
| 1. The executive branch can unilaterally revoke these
| regulations, making them more volatile. Maybe my non-compete is
| invalid today, but will it be in 4 years when I actually want to
| change jobs? Changing a law takes approval of either majority of
| both chambers plus the president, or a supermajority of both
| chambers.
|
| 2. It lowers the stakes in congress, which I believe causes more
| misbehavior. When the stakes are actually high enough, congress
| tends to get things done. When the stakes are low, congress
| grandstands for reelection.
| jjtheblunt wrote:
| > The executive branch can unilaterally revoke these
| regulations
|
| The US Constitution + amendments delineates the powers of the
| branches. Is the situation you describe possibly a window in
| time when executive branch constitutional overreach has not
| been yet challenged?
|
| [ edit : great explanations below -> sincere thanks ]
| mattmaroon wrote:
| It's not overreach, it's delegation by Congress to the
| executive parent is discussing. Congress often gives the
| executive the right to regulate things instead of regulating
| it themselves, and it's a controversial topic.
| aidenn0 wrote:
| Congress created the FTC, congress could eliminate or curtail
| the FTC's power.
|
| Some have argued that it's unconstitutional for congress to
| give away its power (even conditionally) in this way, but
| AFAIK that's a rather fringe legal theory. Certainly the FTC
| has existed for over 100 years at this point, so there's been
| plenty of time to challenge it.
| no_wizard wrote:
| The same fringe legal theory that is likely to win in the
| Chevron Deference case[0] before the Supreme court, which
| will gut agencies (including the FTCs) ability to regulate
| things in this manner?
|
| [0]: https://www.scotusblog.com/2024/01/supreme-court-
| likely-to-d...
| aidenn0 wrote:
| Not even remotely the same legal theory; the theory there
| is that the courts should be able to review regulations
| the agencies make for e.g. if there were less burdensome
| ways to accomplish the same goal even when the
| regulations themselves are "reasonable"
| cryptonector wrote:
| The major questions doctrine announced in W. Virginia vs.
| EPA, and the upcoming, likely reversal of Chevron together
| will greatly limit the Congress' ability delegate power
| _broadly_ to the Executive. You might call that a "fringe
| legal theory", but it seems poised to be the legal theory
| of the land.
| cryptonector wrote:
| Live by regulation, die by regulation. GP's point is that
| since this rule is made by this Administration, the next
| Administration could undo it. GP is right. As long as one
| Administration has the power delegated to it by Congress, and
| so does the next one, then the next one can change and even
| reverse the previous one(s)' regulations.
|
| The court recently found (in W. Virginia vs. EPA) that
| Congress cannot delegate power in "major questions". This
| rule might not be a "major question", but given the vagueness
| of the statutory foundation of the FTC, it's possible that
| all of the FTC's work is on thin ice. The Court would likely
| not rule the whole FTC and its past regulations
| unconstitutional, but it might start looking askance at
| regulations that seem remotely like major questions.
|
| Is this rule a "major question"? I don't know, but I'm
| inclined to think "no".
| mattmaroon wrote:
| While your points are good, on the other hand, Congress at this
| point is totally broken, it's hard to imagine it becoming
| unbroken (since it would require an amendment which is usually
| passed by Congress and they have no desire to make things
| harder for themselves), and it's beholden to special interests
| in a way that the executive branch often isn't.
|
| So at least this way, things can get done.
| cryptonector wrote:
| > Congress at this point is totally broken
|
| If Congress can delegate authority at will and with
| tremendous vagueness vagueness (as in the case of the FTC)
| then that allows Congress to be more disfunctional. If the
| Court reverses Chevron and later guts the FTC then Congress
| will have to get its act together -- they might not, but if
| they do then the Court will have helped us enormously.
| brigadier132 wrote:
| > completely abandoned its duty to pass laws
|
| That's the duty of the legislature? To make more rules?
| aidenn0 wrote:
| Pass, repeal, and revise laws, yes. That's literally what the
| word "legislator" means.
| brigadier132 wrote:
| Legislator is a person that can write laws, it does not
| mean it's their duty to write laws. In the United States
| their duty is to uphold the constitution and represent
| their constituents. Not to create more rules.
| snapetom wrote:
| This has been a problem for decades. Congress' focus is more on
| self-preservation than good policy. For example, granting
| abortion rights through case law was always incredibly tenuous
| and now that's been proven.
|
| I predict this will be kicked around the executive branch and
| bounced in courts. Even if it stands, like you point out,
| future administrations can just revoke it. All the while,
| Congress should be taking action and codifying this.
| tuckerpo wrote:
| Good! If you don't want your SMEs taking your secret sauce to a
| better employer, then be the better employer.
| SoftTalker wrote:
| Trade secrets and NDAs can still be enforced.
| endisneigh wrote:
| I'm curious if it's actually legal for them to ban noncompetes.
| paxys wrote:
| My prediction - this will be litigated in courts for the next few
| years until eventually being struck down by the supreme court in
| a 6-3 decision. And if Trump becomes president we won't even need
| to wait that long.
| animex wrote:
| And this is just the start of why Apple cancelled Jon Stewart
| over a purported Lina Khan interview.
| banish-m4 wrote:
| Lina Khan, AI, and China.
|
| Apple+ is like MSNBC: they only want incrementalist pseudo-
| agitators rather than those who speak truth to power. (MSNBC
| has a history of firing hosts who Washington king makers or
| Comcast executives disapprove of.)
| jmward01 wrote:
| -best- -reason- -ever-:
|
| The Commission also finds that instead of using noncompetes to
| lock in workers, employers that wish to retain employees can
| compete on the merits for the worker's labor services by
| improving wages and working conditions.
| Shorel wrote:
| Can they also ban tipping culture?
| 0xbadcafebee wrote:
| Tipping culture stays because consumers don't want to pay what
| the product is worth. You reduce salaries and suddenly the food
| looks cheaper, and the "tip" is what they took out of the
| salaries. When restaurants end tipping, consumers revolt at the
| real prices.
| eatsyourtacos wrote:
| That's a bunch of bullshit. The tips advantage the EMPLOYER
| because there is zero transparency to the consumer.
|
| I have no idea how much every server I go to is making. How
| do I know if it's good or bad? How do I know if they have any
| benefits? Especially now that everyone wants a fucking tip. I
| buy some ice cream with my kids and I'm supposed to tip 20%
| to someone for scooping my ice cream? I have no idea if the
| server is making $15/hour or $4/hour to determine if the tip
| is part of their pay or pure bonus etc.
|
| It's baffling you blame the consumer. Employers are the ones
| that don't want to pay what their employee is worth.
|
| Honestly the entire country is broken because of simple
| issues of non-guaranteed healthcare and non-guaranteed time
| off etc. If basic human rights were guaranteed we wouldn't
| have to play this constant game of figuring out what to pay
| people at a minimum.
| 93po wrote:
| most of the rest of the world where tipping isn't the norm
| isn't revolting at real prices
| paxys wrote:
| You can ban tipping culture for yourself if you want. The
| government doesn't need to get involved.
| faeriechangling wrote:
| I'm sure all the politicians in the United States, who champion
| the "right to work", will of course support banning legal
| contracts which have the sole purpose of restricting your right
| to work.
| Bostonian wrote:
| Banning noncompetes discourages companies from training workers,
| since they can leave immediately after their training is over. It
| also impinges on worker freedom. Currently I can apply for jobs
| with and without noncompetes, and if the job with the noncompete
| pays substantially more or is more attractive in some other way,
| I can take it. The FTC rule would deprive me of that choice.
|
| I have been hired to write software to implement investment
| strategies. My noncompete prevents me from leaving and
| immediately taking a job at company that invests in the same
| markets. That is a reasonable way for the company to protect its
| intellectual property.
| wildzzz wrote:
| Using investment strategies developed at Company A to make
| money for Company B would likely be a violation of your NDA.
| Even if you didn't use anything you learned at Company B, you
| might still expect a trade secrets lawsuit if they really
| suspect you did (printing out docs, storing docs off network,
| etc.) There already is plenty that companies can do to protect
| trade secrets from leaving with employees that don't require
| you to find a new career field. Like maybe Company A can better
| separate the work so that every software engineer doesn't need
| to have access to the secret sauce or simply making the job
| more attractive so that the ones with the secret sauce don't
| feel the need to leave at all. Why would a company bother to
| work hard to retain you if they know that leaving would involve
| taking a pay cut, relocating, or having to restart your career
| elsewhere? Employers may offer more initially when hiring non-
| compete workers but there's little incentive to grow their
| wages. As for training costs, many companies already require
| extra years of service for educational assistance. Simply make
| the employee pay back any training costs if they voluntarily
| leave for a new job within 6 months after initial training is
| concluded.
| vehemenz wrote:
| I see the point, but wouldn't this new rule also force
| employers to pay more to prevent workers from leaving in the
| first place? Employees won't leave if they are well
| compensated.
| jaysinn_420 wrote:
| You can have training repayment and non-disclosure clauses in
| contracts, leaving cost recovery and legal remedies for
| employers.
|
| Takee your investment industry example - a non-compete could
| prevent you from taking a lucrative position in a competitor of
| your current employer, doing completely unrelated work like
| writing software for their settlement system. I would rather
| have the freedom to choose where I work.
| CharlieDigital wrote:
| > My noncompete prevents me from leaving and immediately taking
| a job at company that invests in the same markets. That is a
| reasonable way for the company to protect its intellectual
| property.
|
| Eliminating non-compete doesn't mean you can steal intellectual
| property; it just means that they can't prevent you from
| working at a competitor. The IP is still protected under
| existing laws.
| lr4444lr wrote:
| Just out of curiosity, were any non-competes ever actually
| enforced by the courts for a reason other than stealing clients
| or trade secrets?
| Overtonwindow wrote:
| https://appleinsider.com/articles/23/09/25/rivos-countersues...
|
| Phillip Shoemaker.
| https://www.theverge.com/2019/5/29/18643868/apple-app-store-...
| no_wizard wrote:
| A case that isn't even a tech company: Prudential Security
| enforced non competes against minimum wage security guards[0]
|
| [0]: https://www.cbsnews.com/news/noncompete-agreement-feds-
| sue-3...
| cryptonector wrote:
| Regardless of whether this is a good or bad outcome, I'm still
| totally non-plussed that the best we can do in the law is to ban
| "unfair" business practices. What exactly is "unfair"? We all
| know it when we see it, I suppose, but we don't all see things
| the same way.
|
| More importantly, and especially if the Chevron doctrine falls, I
| don't see how the Congress can delegate so much power, so
| ambiguously, to the FTC. It seems like a "major questions" issue,
| especially if the FTC then uses this to regulate practices in a
| way that amounts to usurping Congress's power. For example,
| imagine that the FTC declared walled gardens an unfair practice.
| Or suppose the FTC set a maximum transaction fee (think of Apple
| here). Such examples would have such tremendous impact as to
| arguably require legislation rather than bureaucratic fiat.
|
| There has to be a better way. Perhaps the best way would be for
| Congress to every term consider banning recent innovations in
| business practices that are "unfair" -- to do it _before_ the
| businesses using those new practices can use them to gain so much
| power that Congress might have a hard time banning those
| practices later.
| banish-m4 wrote:
| Unfortunately, what you, I, or any non-billionaire voter thinks
| is reasonable or not is impertinent to the "free speech" of
| super PAC corporate lobbyists and $5 ideological fringe zealots
| near total monopolization of legislative output. No amount of
| grassroots action, voting, or dumb insurrections can break
| through entrenched corruption that is in the tank for
| billionaires, Russia, QAnon, and militant evangelical Christian
| white suprematists.
| throw_m239339 wrote:
| Thank you the FTC. The very idea of non-competes clauses in a
| contract is absurd and anti right to quit or to work.
| londons_explore wrote:
| It seems this also allows you to accept another job for a
| competitor "after hours".
|
| I wonder how many companies will start offering "consulting" over
| brunch on a saturday to their competitors employees?
|
| Sure, NDA's still apply, but have fun proving that if it's all
| verbal over brunch...
| grubbypaw wrote:
| No. It explicitly does not do that.
|
| "The Commission declines to extend the reach of the final rule
| to restraints on concurrent employment. Although several
| commenters raised this issue, the evidentiary record before the
| Commission at this time principally relates to post-employment
| restraints, not concurrent employment restraints. The fact that
| the Commission is not covering concurrent-employment restraints
| in this final rule does not represent a finding or
| determination as to whether these terms are beneficial or
| harmful to competition. The Commission relatedly clarifies that
| fixed-duration employment contracts, i.e., contracts between
| employers and workers whereby a worker agrees to remain
| employed with an employer for a fixed term and the employer
| agrees to employ the worker for that period, are not non-
| compete clauses under the final rule because they do not
| restrain post-employment conduct."
| evantbyrne wrote:
| Is this just clarifying existing case law? When working on
| contracts with my attorney he mentioned on multiple occasions
| that noncompetes were unenforceable. I'm in Michigan for whatever
| that is worth.
| blackeyeblitzar wrote:
| Although I agree with noncompetes going away or being limited, I
| don't feel good about agencies making broad changes that feel
| like they should be the outcome of a legislative process. I
| wonder if this will be challenged.
|
| Also - what happens in situation where someone is leaving one
| company to work for a direct competitor? How do noncompetes
| function there to prevent sharing of confidential information or
| trade secrets that will help the competitor?
| banish-m4 wrote:
| Currently:
|
| 0. Get hired by any MAANG or tech company of sufficient size
| outside of California.
|
| 1. Watch as the employment agreement is marked on the edges or in
| the metadata as being specifically tailored to that state with
| different protections and obligations than employment agreements
| signed by other workers doing the same job in different states.
|
| 2. Negotiate on onerous terms that are harmful to your interests.
|
| I don't know if this is more of an "executive order" wish because
| if the FTC had the power, it probably would've done so already.
| bufordtwain wrote:
| This is nice but I think it's small potatoes compared to what
| could be achieved economically by decoupling healthcare from
| employment.
| boppo1 wrote:
| Yeah, this is a big one. How'd that happen in the first place?
| cryptonector wrote:
| You're looking for ERISA. And the ACA.
| Duwensatzaj wrote:
| FDR froze wages during WWII while excluding insurance
| benefits.
|
| That plus tax subsidies for third-party insurance and we
| ended up in the current mess.
| k1rd wrote:
| With respect to garden leave agreements, as noted previously,
| commenters used the term "garden leave" to refer to a wide
| variety of agreements. The Commission declines to opine on how
| the definition of non-compete clause in SS 910.1 would apply in
| every potential factual scenario. However, the Commission notes
| that an agreement whereby the worker is still employed and
| receiving the same total annual compensation and benefits on a
| pro rata basis would not be a non-compete clause under the
| definition,350 because such an agreement is not a post-employment
| restriction. Instead, the worker continues to be employed, even
| though the worker's job duties or access to colleagues or the
| workplace may be significantly or entirely curtailed.
| Furthermore, where a worker does not meet a condition to earn a
| particular aspect of their expected compensation, like a
| prerequisite for a bonus, the Commission would still consider the
| arrangement "garden leave" that is not a non-compete clause under
| this final rule even if the employer did not pay the bonus or
| other expected compensation
|
| https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete-rule...
| cryptonector wrote:
| This should be higher in the comments.
| TuringNYC wrote:
| > "same total annual compensation and benefits"
|
| This would be a game changer. My experience with garden leaves
| was that the base salary remained but since the bonus and
| benefits were gone, the total comp was severely affected
| dev1ycan wrote:
| Good, thank god, I have a non compete...
| EasyMark wrote:
| I think the FAANGs are gonna come out on this one and take it all
| the way to the supreme court. I don't see this sticking at all,
| especially with the current SCOTUS
| _xerces_ wrote:
| CA already makes non-competes unenforceable and aren't most
| FAANG employees in CA?
| EasyMark wrote:
| CA isn't federal law and this involves the FTC. Sure they
| could have taken them before but I think a nation wide limit
| might stir up the hornet's nest. FAANG have offices and data
| centers all over the country
| NominalNews wrote:
| One of the best decisions made. Non-competes are harmful and the
| problem they claim to solve can be resolved in other ways.
|
| Why economists are so critical of non-competes -
| https://www.nominalnews.com/p/to-compete-or-non-compete
| trashface wrote:
| This is going to get challenged and the conservative majority
| supreme court will overrule them. 100%
| wilsonnb3 wrote:
| Would you mind linking to some of examples of their prior
| decisions that makes you think that? I am curious.
| FredPret wrote:
| > "'Robbing people of their economic liberty also robs them of
| all sorts of other freedoms,' said FTC Chair Lina Khan, who
| appeared at a House hearing in 2023."
|
| Should be the motto of every government in the world.
| option wrote:
| This is fantastic news. This will make USA even more innovative.
| m463 wrote:
| I'm not a senior executive, but I'm curious about:
|
| "existing noncompetes for senior executives can remain in force."
|
| So what happens to these people, are they stuck with the
| noncompete forever?
|
| so if they leave, they can still be sued?
|
| or is it that they can't start a competing business at the same
| time?
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