
Resistance to Noncompete Agreements Is a Win for Workers - JumpCrisscross
https://www.wsj.com/articles/resistance-to-noncompete-agreements-is-a-win-for-workers-11558195200
======
drpgq
I'm surprised more states and provinces don't take the example of California
as a guide for non-competes. Places are always trying to create their own
Silicon whatever which is obviously easier said than done, but getting rid of
non-competes is one thing that can be done.

~~~
jjeaff
I don't think getting rid of non-competes would necessarily attract companies
to your silicon-whatever.

~~~
dredmorbius
It's talent, not employers, in short supply.

~~~
ironmagma
Not really true. The whole existence of a “brain drain” indicates that the
places the workers are coming from have insufficient opportunities.

~~~
dredmorbius
Which results in talent being in short supply.

The talent is both better rewarded _and considered and treated_ elsewhere.

It's quite possible for talent to depart locations based on nonfinancial
considerations, or considerations with indirect financial effects, as with
noncompetes. The Great Migration and Jewish refugee migration (1920s-50s, and
later, Europe) are cases in point.

On multiple grounds, California ~1960 - 2000 offerred both better compensation
and better considerations for technical talent. The pendulum is swinging based
on a few factors, notably housing costs an conditions.

------
baronswindle
I am bound by a non-compete agreement, but until a few months ago, I didn’t
remember that I had signed it. At that time, I received an offer for much more
money and more responsibility from a competitor. However, a close friend and
co-worker reminded me about the agreement when I told him I was mulling the
offer.

Ultimately, I decided I didn’t want to risk asking my manager for a release,
and I certainly didn’t want to violate an enforceable non-compete without the
blessing of my employer. So I scuttled the move.

I was disappointed, but I hold nothing against my employer or against the laws
of NY. They hid nothing from me when I accepted the offer, and the noncompete
was very limited in scope (geography, industry, and duration). If I had left
for the competitor, I would have brought a lot of knowledge that I gained as a
result of my position in the company. Not legally protected IP, mind you, but
still valuable technical know-how and information about our customers’ biggest
problems and the trade offs of various solutions. I don’t think it’s
unreasonable to allow organizations to protect that kind of information.

Edit to add that I don’t believe all non-compete agreements are reasonable.
Just that I think it’s misguided to ban them wholesale.

~~~
paxys
> I don’t think it’s unreasonable to allow organizations to protect that kind
> of information.

Why though? As you pointed out, it isn't protected IP, but rather knowledge
and skills that YOU have developed and hold in your head. Does the company
legally or morally have any license over or?

~~~
baronswindle
I didn’t learn this information in a vacuum nor on my own time. I worked on
systems where I saw abstractions that worked well and others that could be
improved. I spoke and tested ideas with users. I attended meetings where
people presented findings that were the product of hundreds of hours of work
and read countless reports with similar information.

If I left for a competitor, I would be working on a lot of similar problems.
Of course, I wouldn’t immediately tell my new employer everything valuable I
learned in my old job, but in the normal course of doing my new job, I
inevitably would reveal information that my old employer spent time and money
to learn.

~~~
AlexandrB
> Of course, I wouldn’t immediately tell my new employer everything valuable I
> learned in my old job, but in the normal course of doing my new job, I
> inevitably would reveal information that my old employer spent time and
> money to learn.

This is ridiculous. Modern employers don't even invest much in employee
training anymore and expect you to come with all the skills you need. And non-
competes are like -ve training where anything you learn you're expected not to
use for a period (and you forget some of it in the meantime).

In the big-picture view this seems like a huge waste of a country's human
resources. When people are switching jobs the match between employee <->
position is forced to be sub-optimal by non-competes, reducing overall
productivity.

Edit: It's giving employers an _awful_ lot of credit to say that they "spent
time and money" to learn something. An employer is already short-changing
their employees by paying them less than their productivity (see: profit).
It's more accurate to say that _you 're_ spending time and money (in the form
of profit you give up to the employer) to learn something for their benefit.
And now the employer is expecting to have a monopoly on that as well. Terrible
deal for a worker.

~~~
baronswindle
Contracts of all sorts increase switching costs, but they also potentially
create value. Sure, in some cases, one or more parties could become better off
by taking some action that is prohibited by the contract, but that doesn't
mean that we would be better off as a society if we outlawed all contracts
that have the potential to encumber somebody in the future.

------
fhrow4484
In Washington State, there was an almost full-ban on non-compete that was
proposed a few years ago. Google came to the public hearings with full support
for the law as it is (which make sense given the status for non compete in
California - and how it got sued by Microsoft over one employee). The law
would have made it that non-compete are void if laid-off, and void if over 1
year max or if you're not an executive employee.

But Microsoft, Amazon, and the hospitals fought it hard. (Hospitals are using
it on both nurses and doctors apparently)

So the bill got rewritten where it only applies to people with a total comp
less than 185k, and where student debt could be subtracted to that 185k. This
got fought more by opponents.

Now the ban on non compete only applies to people whose yearly salary (total
comp as listed on W-2) is less than 100k, So doctors and tech workers at those
companies get nothing out of it, except the clarification that non compete:

\- cannot be for longer than 18 months

\- if employee is laid off and non compete is enforced, the company must pay
base salary for the duration of non-compete.

Geekwire had a good coverage of it over the years:

[https://www.geekwire.com/2016/non-compete-bill-stalls-
washin...](https://www.geekwire.com/2016/non-compete-bill-stalls-washington-
state-opposition-business-groups/)

[https://www.geekwire.com/2018/effort-kill-non-competes-
washi...](https://www.geekwire.com/2018/effort-kill-non-competes-washington-
state-fails-leaving-controversial-contracts-intact/)

[https://www.geekwire.com/2019/tech-leaders-sound-off-
washing...](https://www.geekwire.com/2019/tech-leaders-sound-off-washington-
states-new-non-compete-restrictions/)

EDIT:

original bills:
[http://lawfilesext.leg.wa.gov/biennium/2015-16/Pdf/Bills/Hou...](http://lawfilesext.leg.wa.gov/biennium/2015-16/Pdf/Bills/House%20Bills/2931.pdf)
;
[http://lawfilesext.leg.wa.gov/biennium/2017-18/Pdf/Bills/Hou...](http://lawfilesext.leg.wa.gov/biennium/2017-18/Pdf/Bills/House%20Bills/1967.pdf)

final bill:
[https://app.leg.wa.gov/billsummary?BillNumber=1450&Initiativ...](https://app.leg.wa.gov/billsummary?BillNumber=1450&Initiative=false&Year=2019)

~~~
detaro
> _\- if employee is laid off and non compete is enforced, the company must
> pay base salary for the duration of non-compete._

That sounds like a pretty big "nothing" to get out of it?

~~~
maxxxxx
The trick is not to enforce the non-compete but to deter other companies from
hiring because it's too much trouble.

~~~
wolco
Should be a single time decision made at the end of employment

------
thatoneuser
Non competes should be enforced symmetrically. If a company won't let you work
for another company they can't hire another employee.

~~~
dredmorbius
That's the net effect, and it hurts employees far more than employers.

------
bradleyjg
There are trade-offs here even if looked at purely from the worker's point of
view. While it is probably strictly superior from that POV to have the exact
same job with the exact same terms except without a non-compete, the inability
to commit to a non-compete means that the equilibrium is shifted and the exact
same job with the exact same terms likely wouldn't have existed in the first
place.

Perhaps on the balance laws against non-competes are a good idea, but we
should always be wary of claims of a free lunch.

~~~
baronswindle
This is a great point. Non-compete agreements reduce risk of losing otherwise
unprotected information to a competitor and probably increase retention of
valuable employees. So preventing employers from using these agreements would
increase risk and turnover, and employers might (read: probably would)
decrease offered compensation in response.

Now, this effect might be dwarfed by the upward pressure on compensation
caused by greater availability of alternative jobs for employees, but it’s not
obvious to me that would be the case. I’d be interested to see some empirical
studies on the subject.

~~~
lovich
I disagree with the assumption here that employers are offering increased
compensation. When it's standard practice to have non competes _and_ they take
years to be out of effect then you don't get competition that would require
increased compensation for employees.

At this point even if a competitor jumped in and offered no non competes for
the same wage, it wouldn't matter as no one can work for them. The mechanisms
of capitalism require little to no barriers to entry and industry wide
practices like non competes add large barriers which prevent the normal supply
and demand mechanisms

