
Too Many Workers Are Trapped by Non-Competes - paulpauper
https://www.bloomberg.com/opinion/articles/2018-11-12/non-compete-clauses-trap-too-many-american-workers
======
djsumdog
I've always refused to sign any contract with a non-compete. In every case,
the employer has removed or voided it. The only exceptions were jobs in
Chicago, and I walked away from two different jobs because they couldn't
change their contract.

I often don't even bring it up during the interview, until I get an offer. At
that point if they're not willing to negotiate my basic rights as a worker,
it's not a company I want to work for and I'm glad I've wasted their time.

Always demand to see the offer letter/agreement first before you accept, and
don't be afraid to walk away if it contains a non-compete. They've screwed
over at least two friends of mine and they're totally not worth it. I've
written about my experiences with non-competes before:

[https://penguindreams.org/blog/why-i-dont-sign-non-
competes/](https://penguindreams.org/blog/why-i-dont-sign-non-competes/)

~~~
sgustard
> I'm glad I've wasted their time

That's an odd attitude. You've also wasted your own time, yes?

I can see how it's problematic to bring it up ahead of time. "By the way, I
won't sign a non-compete." Immediately the company is on alert: you plan to
quit after learning their secrets and go to a competitor? It's like drug
testing: obviously a violation of your rights, but why would I hire this one
guy who refuses to take it?

The only real solution is legislative. For you to die on that hill repeatedly
means the companies are still just as profitable, and you're unemployed.

~~~
mancerayder
_> I'm glad I've wasted their time

That's an odd attitude. You've also wasted your own time, yes?_

Wait, there's another approach.

Sign the non-compete, and let them sue you, if they even notice that is, after
you're in the new place. I had a boss that did this (which I saw happen live)
nonchalantly. And managers are worth going after more than individual
contributors in many cases. In the most recent case they went after him and
New Company's lawyers came to the rescue. For those readers not in the US,
those of us commenting from within the US have different laws in different
states. In New York State, the judges typically respect non-competes for one
year (even if it says 1000 years in the contract).

One employer of mine tied stock options to the non-compete, in a totally
separate document from the offer letter. There has to be something material,
otherwise, what are they going to do, beat you up? A restraining order so you
can't go to New Company?

~~~
ChrisLomont
This is terrible advice. Signing a contract you then willfully violate may
cost you significant time and money, and if I found out this is how you
operate, I’d never hire you. I suspect many other employers wouldn’t either.

Simply don’t sign such a contract.

~~~
mancerayder
_found out this is how you operate, I’d never hire you._

You wouldn't find out until I found a new job someplace else, right? And at
that point, why would I lose sleep over how incensed you supposedly would be,
here, hypothetically?

Worked great for my ex boss. What do you recommend, a person stays unemployed
forever because they refuse to sign these unprincipled agreements? Did you
read the Bloomberg article?

We're not all Richard Stallman. Some of us have mortgages and obligations.
Let's hope more states follow California.

~~~
ThrustVectoring
>What do you recommend, a person stays unemployed forever because they refuse
to sign these unprincipled agreements?

You don't need to be that dramatic about the non-compete. What you do is you
ask HR via e-mail whether the non-compete is negotiable or a mandatory
requirement for employment. If it is mandatory, then you have _written proof_
that the non-compete is a contract of adhesion, so you simply need to budget
for a lawyer to sue to nullify it on termination. If it is negotiable, then
you don't sign the non-compete, or sign a non-compete clause that actually
compensates you at full or partial salary for the time spent not competing.

------
twblalock
Banning noncompete agreements is something California has been doing right
since 1872 when they were first banned.

Another thing California does right is refusing to honor noncompete agreements
from other states.

~~~
everdev
You can still enter into a legally binding non-compete in California resulting
from the acquisition of a company or IP.

~~~
cortesoft
Yeah, the big difference is that they pay for that time, and the time is a
known quantity when you make the agreement. The banned non-competes are the
ones where they say, “if you decide to leave at any point in the future, you
can’t compete with us for x number of years”... but they won’t give you extra
money during that time.

~~~
everdev
Yes, it's "valuable consideration" usually included in the sale price. It
doesn't have to come in the form of a monthly payment or a salary.

------
chrismcb
Non competes shouldn't last longer than your job. I once had to sign a year
long non compete for a three month internship. Noncompetes should be void if
you are fired. They should also only apply to salaried employees, or employees
at a certain wage level. It is disgusting that minimum wage employees have to
sign noncompetes

~~~
perfunctory
> They should also only apply to salaried employees, or employees at a certain
> wage level.

Why? I don't think they should apply to anyone.

------
tranchms
I’ve found these non-competes often have no teeth. Unless you possess
exceptional knowledge or secrets, companies will not waste the resources going
after you.

And often when they do, they lose. But it’s a judgement call. I’d say the fear
of non-competes has more power than the non-competes themselves.

~~~
_m96l
> _I’ve found these non-competes often have no teeth. Unless you possess
> exceptional knowledge or secrets, companies will not waste the resources
> going after you._

You naively conflate "not biting" with "having no teeth".

Amazon forces all workers to sign non-competes. They only sue those who piss
them off. Granted, a small minority. But that minority suffers a harrowing
ordeal, typically losing their new job and their ability to work.

You better believe the rest are kept in line by the mere threat of such
lawsuit, and the courts have enforced the non-compete in the cases Amazon did
take legal action.

~~~
rayj
Didn't know that, also FUCK AMAZON from now on. But what are they going to do?
Some sort of civil suit is not that big of a deal if you have your assets
appropriately sheltered.

Although this makes me hate Jeff Bezos just a little bit more. Hope he loses
it all in the divorce battle.

~~~
iaw
> But what are they going to do? Some sort of civil suit is not that big of a
> deal if you have your assets appropriately sheltered.

I think this statement minimizes the severity of being sued. The stress of a
civil suit that threatens your long-term livelihood is a very big deal, daily
uncertainty for prolonged period of times about important parts of your life
can cause a lot of nasty health problems.

------
ngngngng
Do non competes ever come back to bite you? I signed a non compete at a
previous company, and several of coworkers left to a direct competitor. No one
cares, no one ever heard anything about it.

My current company tried to get me to sign a non compete by leaving it on my
desk. I dropped it in a drawer and now everyone's forgot about it. No one is
ever going to remember to get me to sign it. The main thing that weirded me
out about this one is it also said I can't recommend that any of my current
coworkers come work with me for something like 2 years after I leave the
company.

~~~
amerberg
One came back to bite me: [https://progressive.org/magazine/ties-that-
bind/](https://progressive.org/magazine/ties-that-bind/)

They had a joke of a case. When they first threatened to sue after I'd given
notice, the CEO told me he'd have to take legal action to set an example for
the new company. Or as the head of HR put it "they can't take our best
people." They made no mention of trade secrets or any other legitimate
business interest that would have been required to enforce the agreement in
court. Instead, the CEO said that they had a "basically an open and shut case"
because I couldn't take my "work experience" to their "closest competitor,"
which is nonsense. Not to mention that people at both companies have told me
the companies weren't even competitors.

But the new company withdrew the offer to avoid having to go to court, so the
facts and the law didn't matter.

This is how non-competes work.

~~~
didip
Wow, that sucks! So, have you move on from that company?

~~~
amerberg
Yeah, after I submitted my resignation, I was given the choice between legal
action and a promotion. I'd been performing at a very high level, been
recommended for that promotion by my boss months earlier, only to have kicked
it down the road by upper management. After I gave notice they offered to give
it to me immediately, with a raise that made them almost competitive with the
new company.

The legal threats almost scared me into staying, but then I thought about how
miserable I would be if I went back there. The postponement of the promotion
had been the least of my complaints, nothing else would be getting better, and
I'd only be inviting further bullying in the future.

So I left. I didn't get sued because the new company dropped the offer before
I started. I was unemployed for a couple of months and also spent a
significant sum on a lawyer. The whole thing was expensive and stressful
bordering on traumatic. But I've never regretted turning down the
counteroffer.

------
perfunctory
Let's introduce reverse non-competes. Reverse non-compete forbids the employer
to hire anyone who's directly competing with me on the labor market for one
year after my resignation.

~~~
erikpe
That's basically how it works in Sweden. If you are terminated (without
cause), the company isn't allowed to employ other people with similar skill
sets within a year unless they also give you an offer to come back.

------
sitkack
There is a section on Arxiv called "Physics and Society" [0] that has papers
with titles like, "Inference of Demographic Attributes based on Mobile Phone
Usage Patterns and Social Network Topology" [1], that would be a perfect place
to explore the mathematical and empirical answer to the question, "what is the
ratio and shape of the number of folks in an economy that have non-competes
and what is the result".

My hunch is that it is relatively small. I couldn't find the paper on a very
small ratio of folks can flip a population's opinions. I seem to recall it
being 5-10% but could be mistaken.

[0] [https://arxiv.org/list/physics.soc-
ph/recent](https://arxiv.org/list/physics.soc-ph/recent)

[1] [https://arxiv.org/abs/1901.02932](https://arxiv.org/abs/1901.02932)

~~~
ohazi
I bet there are a lot of people who ended up working under a non-compete at
some point, hopped to job number 5 or 6, and was at one point / is currently
violating said non-compete, but nobody at the original company actually knows
or cares where ex-employee #536 currently works and won't bother pursuing
legal action.

I've worked at several companies where management didn't seem to have any idea
what was actually in the documents they asked their employees to sign, it was
all just cookie-cutter boilerplate that they either found online, or that some
company lawyer put in there without actually planning anything further.

------
NoblePublius
I run a digital agency and employ about 65 people who make more than $150k
(product managers and developers, mostly). We stopped putting non competes
into our employment contracts awhile ago, mainly because they’re too expensive
to enforce. What we do instead is require all of our clients to sign
headhunter fee agreements that entitle us to a fee (as much as 100% of salary)
if they hire our staff. Much easier to enforce under liquidated damages
precedents.

~~~
ThrustVectoring
Did you go back and strike the non-competes already signed, too?

~~~
NoblePublius
Yeah. New agreements have supremacy clauses.

------
deogeo
Shockingly, 'right to work' laws don't forbid non-competes.

~~~
djsumdog
'right to work' has nothing to do with labour laws. A 'right to work' state
only requires that unions are not mandatory. They hurt unions because everyone
usually benefits from union negotiations, but in right to work states, they
don't get the same funding.

------
neilwilson
Non-competes are heavily restricted in the UK under the basic principles of
free competition, anti-slavery and anti-trust.

No noncompete clause can go further than is reasonably necessary to protect a
legitimate business interest, otherwise it is unenforceable. The burden of
proof is on the employer.

No individual can be prevented from plying their trade by contract with
another.

I'm amazed in the land of the free that any of these things could stand up in
a court. It's like reintroducing indenture.

~~~
Sharlin
With apologies to _Casablanca_ , I'm shocked—shocked!—to find the US legal
culture to favor the freedom of corporations over the freedom of people.

~~~
mdpopescu
Which part of "this corporation is favored over all other corporations" leads
you to the "favor[s] the freedom of corporations" idea?

~~~
Sharlin
Uh, which individual corporation is favored here? It's not like only some
corporations are allowed to have non-compete clauses.

~~~
mdpopescu
The one that has the non-compete signed with the employee is favored over all
others that would like to hire that employee.

~~~
Sharlin
And other companies are free to sign non-competes with other people. There's
no single "one" company separate from the rest except perhaps from the point
of view of a single employee. As has been said by others, non-competes are
primarily a weapon in corporate warfare, where the actual natural persons are
just pawns.

------
Asooka
Are non-competes enforceable across country borders? Example: I get hired by
Google in Switzerland, quit, then go to work for Amazon in Canada. Is the non-
compete I signed in Switzerland enforceable in Canada? What about across
USA<->Canada? Or across EU member states?

------
newsbinator
Question for those in the know: is a non-compete valid if you signed the
template, but the company never got it back to you signed on their end?

In other words, your signature is on it, but you've never seen their signature
on it.

(Company State = Texas... and I don't reside in Texas)

~~~
npsomaratna
Law student (non-USA) here.

The general contract law principle is: if both parties have signed a contract,
it is legally valid. Whether copies are possessed by only one party or both is
inconsequential.

Exceptions are if the contract contains language mandating that both parties
should receive a copy, or if there are specific laws regulating the form of
such contracts.

------
Lramseyer
Serious question - How do the previous employers find out when an employee
breaches a non-compete agreement? Is it usually word of mouth that makes it's
way to HR/legal? or is it registered through someone's SSN? Because I know
LinkedIn does a pretty good job at hiding from your current employer that
you're looking for a job. What's to stop them from hiding your current
employer to your previous employer?

~~~
Gibbon1
I think usually because the employee opens his fat mouth is why.

~~~
mcv
Sounds like the legally smart thing to do is to lie when they ask you where
you're going to work after you quit. Which sucks. It's not good to lie, and
it's bad if legal circumstances effectively require you to lie, but I guess it
may be necessary here.

A couple of suggestions for things you can tell them:

* you want to travel the world for a year and find yourself. * you're going to start your own company. Maybe even register at the chamber of commerce and give them your card in case they want to hire you. * you need to take care of a family member. * you're burned out by this work and are going to work in retail or something. * you've got the opportunity to turn your hobby into your work. * you're going to move out of state/out of the country. * it's none of their business. (Not a lie! But if they suck, it might make them suspicious and do some research.)

~~~
Gibbon1
What you do depends on your boss and the corporate culture. Some
bosses/companies are happy to see their employees go on to bigger better
things and others react with narcissistic rage. If you work for the latter
keeping your cards close to your chest at all times is best. You're not
leaving for a new job, you're quitting. Also, lock down your credit reports
too.

------
tracker1
I generally read the verbiage... especially regarding non-competes and IP
assignment. If it only regards poaching and work done for the employer, I'll
sign.. if it includes work I do on my own, or working for a competitor for an
unreasonable time-frame, I decline or strike out the offending lines.

------
andyidsinga
fwiw - here's a FAQ on non-competes in oregon:
[https://www.oregon.gov/boli/TA/Pages/ta_faq_noncompete.aspx](https://www.oregon.gov/boli/TA/Pages/ta_faq_noncompete.aspx)

~~~
microDude
I lived in Oregon when I signed a non-compete as a software engineer intern. I
did not know what I was signing and thought it just applied to stealing trade
secrets or source code.

So, I ended up working for that company after grad school, for about 6 years.
Then,,, a customer of that company (one that I worked with, and grew a
favorable reputation with) offered me a nice package (2x salary offering, plus
a RSU bonus account worth about $125k). I was not making that much at the
original company for the market (about $72k). So, I jumped....

I gave my previous employer about 6 weeks notice, and documented all of my
work, and did my best to transfer project ownership to other employees. I
really liked all of the engineers I worked with and was attempting to stay in
good graces.

Then, on my last day of work my boss calls me on the phone and screams at me
for leaving the company. He flashes the NDA on the computer screen and
highlights the non-competitor part of the agreement. Then, he has the gall to
demand that I sign another agreement, saying that I am knowingly taking trade
secrets with me..... Bull-shit, I'm not signing that I say. Then, I had to
hire a lawyer and burn through the sign on bonus and relocation at the new
company to move on. I ended up signing a version of that agreement, since my
lawyer said we would have to take them to court to get out of it, and that I
will be out after 18 months anyways. The truth of the matter is, I could have
fought it and may have won, since I made less then the threshold, but I just
wanted to move on....

Now, I am really happy. I am finally making a living (comfortable) wage for me
and my family, and will be taking a family vacation for the first time in
years.

~~~
apta
Did you tell them where you were heading? Maybe for the future it would be
better not to declare this.

~~~
microDude
Yes. I told my boss, when he asked. They would find out, since I left to their
customer.

------
soufron
Most non-competes are null. Get a Lawyer (and if you're French, come to see
me).

~~~
dorfsmay
You have no contact information in your profile.

------
resalisbury
Occupational licensing is another form of non-compete agreements. Only instead
of the employer preventing employees from moving to a a new company,
occupational licensing prevents professionals from (1) crossing state lines or
moving into new professions.

[https://hbr.org/2018/04/more-and-more-jobs-today-require-
a-l...](https://hbr.org/2018/04/more-and-more-jobs-today-require-a-license-
thats-good-for-some-workers-but-not-always-for-consumers)

------
jpkeisala
In my first job (junior developer in end of nineties) I had NDA that prevented
me to work on software industry for 2 years if I leave the company. I left to
competitor but I was worried if they sue me. They never did, so then I learned
it is just a scaring tactic's. Also, a lawyer told me later that not only it
is illegal they also would need to fully compensate the period I am in
quarantine.

------
paulie_a
I've dealt with a non compete before and it was literally telling the previous
company to go away. I used an excessive amount of swear words in my official
response. After consulting a lawyer I learned for the most part they are just
a bluff. Obviously you can't steal ip but even if the non compete was
enforceable, it's usually a scare tactic. Call the bluff. More than likely
those workers only think they are trapped because it sounds scary.

Edit: downvoted of course, but seriously under most cases the company will not
pursue it and it was likely unenforceable in the first place. It's a scare
tactic by employers and pretend control over their employees. They are
bullshit. I'd like to hire an employee that flat out said "yeah I'm not
signing that, it's bullshit" it shows they actually have a bit of grit
regarding pointless non legally binding paperwork.

------
harry8
noncompetes work even when illegal and unenforceable. Why, because you or many
of your potential employers don't want the massive cost and emotional toll of
being sued - even if you win you lose. That's all google, facebook, microsoft,
etc. you know the companies that we KNOW are guilty of operating a cartel to
drive down wages. That's all they need. This baseless illegal, legally
unenforcable contract provision means they can use to impose a huge fine on
you that is a negligible, non-material business expense to them even when they
lose and you win in court. They win and you lose in real life.

Law is supposed to exist so the strongest might not always get their way. The
law totally and utterly fails when it comes to non-competes. There are
incentives to abuse them and no meaningful consequences.

Cue the apologists working for the big silicon valley players...

~~~
twblalock
> Cue the apologists working for the big silicon valley players...

Why? Silicon Valley is in California where noncompetes are illegal. Silicon
Valley companies don't use them. I've been in Silicon Valley my entire career
and I have never seen one or heard of anyone who has.

~~~
cryptonector
Did you read the rest of the post you're responding to? Did I miss something?
I thought u/adyidsinga explained it quite well.

~~~
twblalock
> Did you read the rest of the post you're responding to? Did I miss
> something? I thought u/adyidsinga explained it quite well.

Who? Nobody with that username has posted anywhere in this entire thread as
far as I can tell.

~~~
tomhoward
They mean andyidsinga.

------
thatoneuser
Imho the only reason non competes should be permitted is if you’ve paid
someone to acquire proprietary knowledge and that realistically the company's
activities are the only reason that knowledge exists. It completely flies in
the face of freedom of the worker to say you can’t jump ship to a competitor,
unless you’re just doing it for trade secrets.

It’s anti-employee to say “hey, after us you don’t get to go use the skills
and experience you’ve worked so hard for because that would harm our profits.”
Surely employees don’t enjoy the reciprocal benefit of a company not being
able to fill their spot after they leave.

~~~
twblalock
I would argue that proprietary knowledge is already covered by trade secret
law and patent law, and there is still no justification for a noncompete
agreement in such a case. Let the employee go, and if you find out he/she has
used that secret knowledge at another company then you sue.

------
Mikeb85
And if you're a 'worker' no court is ever going to enforce a non-compete
clause.

