Simple, straightforward, to the point, and understandable by a layman. I wish more bills could be like this.
It's not perfect. As other commenters mention, this only protects hourly employees, not salaried employees like myself (and I assume a majority of most other commenters here). But it is also a good start. It is a much more egregious pile of BS that someone vacuuming floors or flipping burgers for minimum wage is required to sign a non-compete than I am. I would love it if I was protected from non-compete agreements too, but I'll happily take Non-Compete Agreements for Sandwich Artists are Illegal BS as a stepping stone toward the ultimate goal of Non-Compete Agreements are Illegal BS.
> I'll happily take Non-Compete Agreements for Sandwich Artists are Illegal BS as a stepping stone toward the ultimate goal of Non-Compete Agreements are Illegal BS.
Could be a stepping stone, or it could be divide-and-conquer, to appease some people, so they don't push for non-competes for everyone. Similar to how some right-to-repair laws are only for tractors.
A layman would have to know how to find 29 U.S.C. 201 section 13(a)(1) in order to understand whether they are covered. That's a fairly expansive definition of people who will not be covered:
> (a) Minimum wage and maximum hour requirementsThe provisions of sections 206 (except subsection (d) in the case of paragraph (1) of this subsection) and 207 of this title shall not apply with respect to—
>
> (1) any employee employed in a bona fide executive, administrative, or professional capacity (including any employee employed in the capacity of academic administrative personnel or teacher in elementary or secondary schools), or in the capacity of outside salesman (as such terms are defined and delimited from time to time by regulations of the Secretary, subject to the provisions of subchapter II of chapter 5 of title 5, except that an employee of a retail or service establishment shall not be excluded from the definition of employee employed in a bona fide executive or administrative capacity because of the number of hours in his workweek which he devotes to activities not directly or closely related to the performance of executive or administrative activities, if less than 40 per centum of his hours worked in the workweek are devoted to such activities); or
Unless I have the wrong text... I'm a layman, see...
It makes me wonder whether an income threshold makes more sense as a dividing line than hourly vs. salaried. Higher salary equals more specialized knowledge equals higher risk to employers when those employees move to a competitor with trade secrets in their head (or equals higher value of those trade secrets).
Hourly vs. salaried is often correlated to pay scale, but imperfectly, and it does seem like specialization / economic value of knowledge is really what they're trying to get at with the split in this bill.
Strictly speaking there is a pay threshold, since there's a pay threshold for overtime exemption. The (more general) problem is, that threshold is ridiculously low, something like $25,000/year.
I skimmed the document and missed that part. That's disappointing. Why bother making the distinction? What's different about salaried employees that they should be subject to non-competes but hourly workers shouldn't? I understand that lower paying jobs need protection, but I have never heard of a minimum wage worker at a fast food restaurant having to sign a non-compete. This law seems to only have an impact on skilled hourly workers who likely aren't in a different situation than salaried workers.
There are companies that value their trade secrets. If you employ an engineer for ten years and they know the ins and outs of your process and then go to work for a competitor, soon the competitor has a better product because they have all their own secrets plus yours.
In theory you could try to use an NDA, but the problem with an NDA is that if the employee goes to work for the competitor and then suddenly they have all your secrets, there is no easy way for you to actually prove that they weren't independently rediscovered by some other person at the other company, and nobody there has any incentive to tell you different. You may not even know that they now have any specific one.
The restriction is obviously unreasonable to the employee, because it prevents them from switching jobs to another that uses the skills they're trained in, but now it's politics. Who has more political power when a bill prohibiting non-competes comes before Congress?
Excluding professionals makes it so those companies no longer really care and makes it a lot easier to actually pass the bill.
But the situation is symmetric: your risk of losing secrets to your competitors is exactly balanced by your prospects of gaining secrets from your competitors. This tends to flatten the playing field and make secrets relatively less valuable, which promotes the spread of knowledge, and makes everyone better off in the long run.
All of what you said is only beneficial to the employer if the employer believes that the competitor's secrets are as valuable as the employer's own secrets. Which is almost never the case. Especially not for the largest employers. The likelihood of some startup's secrets being as valuable as Google's secrets is remote in the extreme.
No, the symmetry necessarily holds in general. It is not dependent on anyone's belief.
Now, it is true that some company's secrets will be more valuable than others, and it's also true that most companies think that their secrets are more valuable than their competitors. But because of the symmetry, most companies are simply and necessarily wrong about that.
It is also true that some companies will lose money as a results of losing secrets. But society in general will be better off. Which of those is preferable is a matter of taste, of course. Some people are perfectly fine with a legal regime that enriches them (or that they think enriches them) at the expense of everyone else. But if people are making rational decisions, most people should prefer enriching society at the expense of the wealthy rather than the other way around.
>It is also true that some companies will lose money as a results of losing secrets...
That's the point though, how do Google's stewards square their pottential support for losing secrets, with their fiduciary duty to numerous teacher, firefighter and police officer pension funds? That duty to the investment funds backing heaven only knows how many 401k's? Their duty to countless other pension funds and retirement accounts?
"Society will be better off in the future your honor." Is only gonna go so far.
This is part of the problem, society might be better off at some undefined and uncertain point in the future. But for investors in Google, they will be better off right now, and in the short term future. So we're always in this position of trying to argue an idealistic future, that never turns out the way you plan it in any case, against an optimal present.
I think as techies we have to start presenting arguments for the changes we'd like to see in the world that are a bit more practical. Not only on labor issues like non competes, but also on issues like tech's relationship to labor, tech's relationship to fundamental rights, tech's relationship to children, etc etc etc.
At present, a lot of our arguments sound a little tone deaf at best, callous at worst, and out of touch at the mean. I've said before, in my neck of the woods, if I tell people, "Amazon treats their employees like crap." They get it.
If I say, "Google can track your location with android phones so don't bring your phone to see your weed man." They get it.
I can even say, "Facebook is full of Ruskies trying to influence the election." They'll get it. They'll know what I mean and everything that entails.
But if I come at the people in my small town with, "Big Tech is what drives wealth inequity by disrupting traditional labor markets and causing data privacy issues. Which, of course, concert to cause knock on effects in the larger economy." Yeah, that's the kind of post-graduate parrot-speak that makes them look at my mother disapprovingly for raising such a pretentious ass-hat.
> That's the point though, how do Google's stewards square their pottential support for losing secrets, with their fiduciary duty to numerous teacher, firefighter and police officer pension funds?
They don't. It makes perfect sense for Google to oppose right-to-compete.
However...
> "Society will be better off in the future your honor."
This aphorism implies that this decision is going to be made by a judge. It isn't. It is being made by the legislature, and the legislature is supposed to reflect the will of the people. So the right outcome here (if everyone is acting rationally and honorably) is to enact right-to-compete despite Google's objections.
The situation is no different than (to pick a very extreme example) that it was right to pass the 13th amendment despite the fact that it was vociferously opposed by a lot of people who lost a lot of money as a result.
I agree with every point you've made in this thread, but bilbo0s has a good point about the optics. The vast majority of the voters do not understand economics, do not think systemically about "the greater good", and wouldn't follow an argument as abstract as "Most companies think their secrets are worth more than their competitors, but the only ones who are correct about that are giants like Google, who have every reason to push for trade-secret and non-compete agreements that restrict your labor freedoms and hamper your ability to get a better wage." There's a bunch of leaps of logic here that I believe and you believe because we understand competitive bargaining and have worked for Google, but which are completely foreign to someone who takes the first job they can get because they need money right now.
The fight for the 13th amendment was framed as "Slavery is evil. If you support slavery, you are evil too." That's the kind of moral argumentation that's simple enough that it can get voter support. There was a lot of economic jockeying going on and fights between new vs. entrenched interests going on in the Civil War, but all of that was hidden from the voters and largely written out of the histories. "Google spies on you" is an effective way to convince people to vote against Google's interests; "Google is commoditizing their complements and restricting their ability to make contracts to better their bargaining position" is gibberish to the average voter.
It's an unfortunate fact of life that nearly all good decisions are made for the wrong reasons. Sometimes I wish everybody could just understand markets and systems and vote according to their enlightened best interest - but they don't, and much of the fucked-upedness of the world comes from that.
> "Society will be better off in the future your honor." Is only gonna go so far.
Investment funds are usually well-diversified anyway - so when society is better off, they are better off too. It's really, really uncommon for someone to hold a sizeable position in a single company or even sector in the medium-to-long run. So, even if you posit that this bill might "hurt Google" (and never mind that Google is in CA where non-compete agreements are heavily limited already - funny coincidence, that one), only comparatively few stakeholders would truly be made worse off.
That doesn't matter to that particular employer, and "the economy as a whole" isn't a lobbying group. A big company benefits itself, and does so by protecting its trade secrets.
What if I don't want to be "protected" from non-compete agreements? If my company wants to pay me 7 figures to not work for 1-2 years (or to work in another industry and double dip), I should have the right to take them up on the offer. Why do you think you're entitled to ban me from entering a mutually beneficial arrangement with my employer because you made the paternalistic assumption that such contracts are intrinsically bad for me?
Would you find a tax on non-compete clauses (perhaps with a size depending on how many non-compete clauses are currently active) somewhat less objectionable?
I’m not wholly advocating for that, but it seems to me like a compromise position with the benefit that it has a clear upper bound on the cost it would impose (when denominated in money), while still doing something towards whatever people are trying to do by banning it.
Any tax on the employer-employee relationship is essentially a tax on the employee. It’s like how payroll taxes are economically equivalent to income taxes, even though one is (partly) administratively levied on the employer, not the employee.
This tax would only be applied per instance of a non-compete clause, not per employee.
That way the non-compete clause isn’t included unless the company gets sufficient benefit from it to outweigh the tax.
I would think that if the size of this tax was large enough, it would be equivalent to banning non-compete clauses, and if it was 0 it would be like doing nothing.
Doesn’t this therefore allow for interpolating between “non-compete clauses are allowed” and “non-compete clauses are forbidden”?
> ‘‘(3) LIMITONAPPLICABILITY.—This sub-section shall not apply with respect to any employee described in section 13(a)(1).
That's:
| (1) any employee employed in a bona fide executive, administrative, or professional capacity (including any employee employed in the capacity of academic administrative personnel or teacher in elementary or secondary schools), or in the capacity of outside salesman (as such terms are defined and delimited from time to time by regulations of the Secretary, subject to the provisions of subchapter II of chapter 5 of title 5, except that an employee of a retail or service establishment shall not be excluded from the definition of employee employed in a bona fide executive or administrative capacity because of the number of hours in his workweek which he devotes to activities not directly or closely related to the performance of executive or administrative activities, if less than 40 per centum of his hours worked in the workweek are devoted to such activities); or
I think that means that this doesn't apply to... a great number of people who really wish it did.
"Professional" as a term of art refers to architects, doctors, and lawyers. "Professional capacity" includes engineers, programmers, really, anyone you might colloquially refer to as a "professional".
While reading this, I found that "Computer Professionals" are often exempt from Minimum Wage and Minimum Hours/Overtime Pay, because of 29 usc 213(a)(17). (104th congress, HR 3448)
Fortunately, this bill (in it's current state) does not reference that exemption, and only exempts executives, school employees including teachers, and outside salesmen.
| professional capacity (including any employee employed in the capacity of academic administrative personnel or teacher in elementary or secondary schools),
Looking at the Congress page for it, it has been introduced two and a half months ago, and hasn't seen any further action since then. Is it scheduled for a committee hearing?
It's strange, this only calls out one specific class of exemptions [13(a)(1)], the one that deals with outside sales and executives, and not section 13(a)(17) which exempts "Computer Professionals"
Yeah, this one is aimed at companies trying to make janitors and food service workers sign a NDA. A good step to be sure protecting some folks that don't get a lot of attention.
This is great. Makes me think more highly of Marco Rubio, especially given how simple it is. I hope it passes, and hope it's extended to all types of employee.
Rubio, a Republican, wants to decrease the power of employers by curtailing non-compete agreements?
I'll give this some serious consideration if it gets out of committee, and until that time I'm thinking this is bill is more about signaling than anything else. Still, increasing regulation on employer relations like this is a good start.
No its not. The freedom to contract is nowhere to be found in the traditional libertarian view of rights to life liberty and property. In fact, libertarians (including those center libertarians in the republican party) consistently reject the ability for people to sign away their rights via contract.
You cannot claim in good faith that republicans support the 'freedom' to contract your rights away. Can you contract the rest of you labor away for a fixed sum (ie slavery)? Of course not. You have the grand ole party to thank for that too. The ethic is consistent
"You give up the right to spend 40 hours a week the way you want, instead spending them the way we want, while we give up the right to use some our money however we like and instead give it to you."
That's the employee giving up their right to the fruits of their labor and the employer giving up their property right to the monies used to compensate the employee.
And none of those things interfere with the more fundamental right to life liberty and property. Is the employer allowed to hold the employee there against his will if he changes his mind? Of course not. You cannot give up your right to leave a contract at any time. Which is why non competes are decidedly anti civil rights and thus anti libertarian and thus against the rights based factions of the rephblican party
Do you need help with the definition of "free market"?
> In a free market, the laws and forces of supply and demand are free from any intervention by a government, or by other authority. Proponents of the concept of free market contrast it with a regulated market in which a government intervenes in supply and demand through various methods, such as tariffs, used to restrict trade and to protect the local economy.
Contracts on competition -- being neither bought nor sold -- are not under the purview of the free market any more than romantic love is.
Another way to think about it. Republicans are typically for smaller government. A non conpete clause is only enforceable via government petition. A private company cannot threaten force against a person because of who they work for. All enforcement is via government. Thus banning non competes leads to less litigation and a smaller government.
Finally there is no regulation being added to the market here. The government is in fact removing regulation by declaring via statute that it will no longer interfere when people violate certain types of agreements. Thats called the government butting out of peoples business
Really, still making up your own definitions, and of basic vocabulary terms now? Pathetic.
Private contracts like non competes are not regulations. On the other hand, laws designed by the government are regulations. Which this bill will be if it becomes law. To disallow certain agreements in the labour market. To regulate it. Because it's regulation. That makes it less of a free market.
You're right. The part of the bill that says they are disallowed is a regulation. The part of the bill that says the government won't do a damned thing about the silly agreements you make with other people is not.
It's not perfect. As other commenters mention, this only protects hourly employees, not salaried employees like myself (and I assume a majority of most other commenters here). But it is also a good start. It is a much more egregious pile of BS that someone vacuuming floors or flipping burgers for minimum wage is required to sign a non-compete than I am. I would love it if I was protected from non-compete agreements too, but I'll happily take Non-Compete Agreements for Sandwich Artists are Illegal BS as a stepping stone toward the ultimate goal of Non-Compete Agreements are Illegal BS.