FTC bans noncompete agreements (1 Viewer)

[psychobillies]

I don't see why most people should be opposed to giving power to individual employees (labor) vs. corporations (capital).

Not all corporations are big evil billionaires lighting their cigars with million dollar bills. I don't think the government should be picking sides.

Well, they've certainly picked the corporations for many labor relations in recent history...

They shouldn't have.

 

[Zow]

To the lawyers more learned on this issue, how often do you suspect that non-competes are included in employment contracts purely as a prophylactic?

For those non-lawyers, what I mean by a "prophylactic" is the inclusion of a term that the drafter of the agreement knows it likely not legally enforceable but includes it anyway with the hopes that it scares the other signer into believing it's an enforceable term then acts accordingly. For example, a lot of public gyms will put a clause in their contracts that you waive any claim against the gym for any types of negligence. This sort of term is probably unenforceable but gyms may include it anyway because if it preempts just one out of ten people who get hurt from suing then it's worth it.

 

[psychobillies]

People sign these things voluntarily, right? Why should a government bureaucracy involve themselves in private contracts between two consenting parties? If enough workers decide not to sign them, they would go away on their own.

Sure its "voluntary" but the decision isn't whether or not to sign the non-compete. The decision is whether or not you want the job (or the promotion, etc.)

Why did you need to put voluntary in quotes?

I didn't need to put it in quotes but wanted to note the important and obvious qualification which I stated. Signing a noncompete isn't necessarily "voluntary" in the same way that I voluntarily chose to eat an entire pizza last night while watching basketball alone on my couch. In many if not most business employment situations, the negotiation leverage is not equal. You take the job or you don't. If you're a young financial advisor and are offered a job at Merril Lynch, you can't negotiate out of the noncompete. So you turn down the job and apply at Morgan Stanley and guess what?

It's still completely voluntary, which is why I asked. Your examples are of two wildly different things, but voluntary only has one definition.

 

[gianmarco]

Non-competes in healthcare are just awful. So glad they are getting done away with.

Ruling could save $194 billion in healthcare costs?

I am struggling mightily to see how a non-compete makes any sense at all for a nurse, pediatrician, x-ray tech., etc.

For some reason this reminds me of this case (the restraining order on at will employees was an abomination - that judge should have been removed from the bench.)

For physicians, the idea is that you don't join a group, build up a patient base, then leave that group and bring those patients with you.

The practical side is that almost never happens, but non competes are incredibly common place and they are pretty restrictive. Usually 15-25 mile radius and 1-2 years. Plus, if it's a hospital group, it often applies to ANY facility or branch, not just the one where you might be.

 

[psychobillies]

I'm getting repetitive. I apologize for cluttering the thread.

 

[AAABatteries]

People sign these things voluntarily, right? Why should a government bureaucracy involve themselves in private contracts between two consenting parties? If enough workers decide not to sign them, they would go away on their own.

Sure its "voluntary" but the decision isn't whether or not to sign the non-compete. The decision is whether or not you want the job (or the promotion, etc.)

Why did you need to put voluntary in quotes?

I didn't need to put it in quotes but wanted to note the important and obvious qualification which I stated. Signing a noncompete isn't necessarily "voluntary" in the same way that I voluntarily chose to eat an entire pizza last night while watching basketball alone on my couch. In many if not most business employment situations, the negotiation leverage is not equal. You take the job or you don't. If you're a young financial advisor and are offered a job at Merril Lynch, you can't negotiate out of the noncompete. So you turn down the job and apply at Morgan Stanley and guess what?

Woah - I did the same! :slapithigh: but not too high as I can't jump because I'm so fat.

 

[Scoresman]

I don't see why most people should be opposed to giving power to individual employees (labor) vs. corporations (capital).

Not all corporations are big evil billionaires lighting their cigars with million dollar bills. I don't think the government should be picking sides.

True, but very few actually give two ****s about the people they employ.

 

[thecatch]

I don't see why most people should be opposed to giving power to individual employees (labor) vs. corporations (capital).

These types of laws can have unintended consequences that sometimes leave the people they are intended to help worse off than they were before (the latest Freakonomics podcast has some discussion of this). Not necessarily saying that will be the case here (if the rule even ever goes into effect), but the analysis is (or at least should be) more complicated than your statement suggests.

 

[CletiusMaximus]

People sign these things voluntarily, right? Why should a government bureaucracy involve themselves in private contracts between two consenting parties? If enough workers decide not to sign them, they would go away on their own.

Sure its "voluntary" but the decision isn't whether or not to sign the non-compete. The decision is whether or not you want the job (or the promotion, etc.)

Why did you need to put voluntary in quotes?

I didn't need to put it in quotes but wanted to note the important and obvious qualification which I stated. Signing a noncompete isn't necessarily "voluntary" in the same way that I voluntarily chose to eat an entire pizza last night while watching basketball alone on my couch. In many if not most business employment situations, the negotiation leverage is not equal. You take the job or you don't. If you're a young financial advisor and are offered a job at Merril Lynch, you can't negotiate out of the noncompete. So you turn down the job and apply at Morgan Stanley and guess what?

It's still completely voluntary, which is why I asked. Your examples are of two wildly different things, but voluntary only has one definition.

I think this is exactly my point. You asked whether signing a non-compete is voluntary and the answer is yes, but as you note that word has an extremely broad meaning. In this instance, the use is highly qualified because many if not most employees probably don't really feel like they have a choice.

 

[McBokonon]

People sign these things voluntarily, right? Why should a government bureaucracy involve themselves in private contracts between two consenting parties? If enough workers decide not to sign them, they would go away on their own.

Sure its "voluntary" but the decision isn't whether or not to sign the non-compete. The decision is whether or not you want the job (or the promotion, etc.)

Why did you need to put voluntary in quotes?

I didn't need to put it in quotes but wanted to note the important and obvious qualification which I stated. Signing a noncompete isn't necessarily "voluntary" in the same way that I voluntarily chose to eat an entire pizza last night while watching basketball alone on my couch. In many if not most business employment situations, the negotiation leverage is not equal. You take the job or you don't. If you're a young financial advisor and are offered a job at Merril Lynch, you can't negotiate out of the noncompete. So you turn down the job and apply at Morgan Stanley and guess what?

It's still completely voluntary, which is why I asked. Your examples are of two wildly different things, but voluntary only has one definition.

You're right. For example, it's voluntary to be 100% ideologically rigid about a particular, say, political viewpoint regardless of the circumstances or any nuance surrounding an issue. It's also voluntary to be cavalier and maybe even a little callous about other peoples' circumstances.

 

[the moops]

It's still completely voluntary, which is why I asked.

It would also be voluntary to work for 3 dollars an hour in dangerous working conditions. The government gets involved in many voluntary decisions between employers and employees

 

[Captain Cranks]

If it's a truly secret IP invented by the company, I get it (but there are already things in place to protect those). But if its easy to learn and replicate... how secret and unique can it really be? Can the IP be patented / copyrighted? Or is it more like a recipe?

I've also known business owners who had non-competes to protect things like "oh, that's who they buy their materials from", or "oh, they advertise there... that's clever". While I'm sure the owner doesn't want that stuff to get out, those really aren't secret IP's that the company owns, and should not be used to prevent someone from working at another company.

This is what I wrote over at the Discord where we're having a similar discussion.

"I run a small hedge fund who spec trades electricity futures. When I bring someone in, they typically have no experience in the energy industry let alone how to "trade electricity". Over the next few weeks/months I teach them about the industry as well as my own formula on building profitable trades. Once they have this knowledge, which took me years to build, it's not difficult for them to go out and replicate it on their own. In order to protect myself from a constant cycle of training up what becomes my competition, I have a 6 month non-compete which serves as a small deterrent. It's not in place to hold someone hostage but to provide some protection to what is life changing knowledge.

They know this up front as it's part of the employment agreement. If that's not something they're willing to accept, no big deal. They can pursue another job and I will pursue another trader. I'm offering people the chance to make $300K-$1M a year WFH low stress job that requires them to work less than 20 hours a week. I expect some concessions on their part."

So effectively I have a "recipe" that would enable someone to make a lot of money. They just need to be taught how. And no, I'm not hiring. Especially now.

 

[Gatorman]

If it's a truly secret IP invented by the company, I get it (but there are already things in place to protect those). But if its easy to learn and replicate... how secret and unique can it really be? Can the IP be patented / copyrighted? Or is it more like a recipe?

I've also known business owners who had non-competes to protect things like "oh, that's who they buy their materials from", or "oh, they advertise there... that's clever". While I'm sure the owner doesn't want that stuff to get out, those really aren't secret IP's that the company owns, and should not be used to prevent someone from working at another company.

This is what I wrote over at the Discord where we're having a similar discussion.

"I run a small hedge fund who spec trades electricity futures. When I bring someone in, they typically have no experience in the energy industry let alone how to "trade electricity". Over the next few weeks/months I teach them about the industry as well as my own formula on building profitable trades. Once they have this knowledge, which took me years to build, it's not difficult for them to go out and replicate it on their own. In order to protect myself from a constant cycle of training up what becomes my competition, I have a 6 month non-compete which serves as a small deterrent. It's not in place to hold someone hostage but to provide some protection to what is life changing knowledge.

They know this up front as it's part of the employment agreement. If that's not something they're willing to accept, no big deal. They can pursue another job and I will pursue another trader. I'm offering people the chance to make $300K-$1M a year WFH low stress job that requires them to work less than 20 hours a week. I expect some concessions on their part."

So effectively I have a "recipe" that would enable someone to make a lot of money. They just need to be taught how. And no, I'm not hiring. Especially now.

I agree with this, and I also agree the law needs to be changed. There is a difference in employment where you are getting some kind of technical expertese that you don't want to leave your "shop" vs a clause designed to prevent you from having a livelyhood. This FTC ruling swings the penulum all the way to the other side, and I am ok with that to a certain extent.

Once the "non competes" were being used to keep you from flipping burgers across the street it became too much. FWIW I have never put a non compete into my contracts with my other docotrs because most were not enforceable anyway, but then again, the technical "knowhow" for what I do was learned in Optometry School, not by working for me. There should be "some" protection when the skill you learn is coming from the employer, but it shouldn't be punitive because in cases where it is, the employer is allowed to be a D!ck with no repurcussions. If cranks teaches you to trade in electricity, then sure you can open your own shop, but some "percentage" of revenue should be alloted to cranks if you are in the same industry. IMHO

 

[Captain Cranks]

If cranks teaches you to trade in electricity, then sure you can open your own shop, but some "percentage" of revenue should be alloted to cranks if you are in the same industry. IMHO

Im not even asking for that. I understand once people learn the business and see an opportunity to capture more of their profits they'll be inclined to recreate what I've done. My minority stake business partner did as much and I didn't stop him. What I am trying to prevent is someone learning the ropes a couple months, vulturing my process and then leaving before any material value add.

 

[fatness]

I've never asked an employee to sign a non-compete agreement and I'm approaching 40 years with my small business. I've trained a lot of people, and many have moved on and upward over time. Good for them. Ambition, skill, and self-confidence are important qualities to be encouraged. I'm professionally licensed by the state and I've helped 4 former employees get the training and experience they needed to get licensed themselves. 2 of them went on to start their own businesses, and when we were too busy at times I'd refer interested clients to them because I knew they'd do a good job. And they have referred work to me. To me, that's the way things are supposed to work. I got my education and experience while working for others, and when I started my business I poached no clients. How a person progresses in their career should be in their hands, not in the hands of their employer. Non-competes give the employer too much control.

For every story of an employee who left a place of employment and crapped on their previous employer by stealing clients I'd guess there are 10 or more stories, never written, of employees who left and behaved completely ethically.

TL/DR: business owner writes pro-worker post

 

[Gatorman]

I've never asked an employee to sign a non-compete agreement and I'm approaching 40 years with my small business. I've trained a lot of people, and many have moved on and upward over time. Good for them. Ambition, skill, and self-confidence are important qualities to be encouraged. I'm professionally licensed by the state and I've helped 4 former employees get the training and experience they needed to get licensed themselves. 2 of them went on to start their own businesses, and when we were too busy at times I'd refer interested clients to them because I knew they'd do a good job. And they have referred work to me. To me, that's the way things are supposed to work. I got my education and experience while working for others, and when I started my business I poached no clients. How a person progresses in their career should be in their hands, not in the hands of their employer. Non-competes give the employer too much control.

For every story of an employee who left a place of employment and crapped on their previous employer by stealing clients I'd guess there are 10 or more stories, never written, of employees who left and behaved completely ethically.

TL/DR: business owner writes pro-worker post

I agree. if you believe in Karma, then helping someone get a leg up is a solid way to go. That being said, I'm sure you know of a few guys who are not as "Noble" as the ones you have sheparded.

I've never worried about someone "taking what's mine". I pay my people well and I help htem when they go out on their own. No hard feelings, but I can understand some industries want to protect themseves. Once Jimmy Johns tried o keep fry cooks from leaving you knew the system was brokesor.

 

[-fish-]

I'm not a lawyer, but if someone does something voluntarily

I mean, I guess you can voluntarily choose not take the job because you don't want to sign it, thereby volunteering to not make money and potentially default on your mortgage, or not eat well, or not get your kids new clothes, and continue your job search in the meantime, likely in an industry where all prospective employers will force you to make the same choice. So then that person is voluntarily not choosing to try a different career path/industry where this requirement is less likely.

Not everyone is in a position where they can laugh about it.

You don't have to guess about it. That's definitely a choice they get to make. Is it the role of government to take every minute aspect of everyone's life that may seem a little unfair and make regulations to protect them? Have we given up on personal responsibility?

I totally understand not liking them. I just don't think government should be involved at all.

Are you ok with monopolies? Same idea, different scale. Also, once 30 million workers have become subject to noncompete agreements, it seems like something the government should be regulating. This is definitely affecting interstate commerce, not to mention life, liberty and the pursuit of happiness and all that.

 

[psychobillies]

People sign these things voluntarily, right? Why should a government bureaucracy involve themselves in private contracts between two consenting parties? If enough workers decide not to sign them, they would go away on their own.

Sure its "voluntary" but the decision isn't whether or not to sign the non-compete. The decision is whether or not you want the job (or the promotion, etc.)

Why did you need to put voluntary in quotes?

I didn't need to put it in quotes but wanted to note the important and obvious qualification which I stated. Signing a noncompete isn't necessarily "voluntary" in the same way that I voluntarily chose to eat an entire pizza last night while watching basketball alone on my couch. In many if not most business employment situations, the negotiation leverage is not equal. You take the job or you don't. If you're a young financial advisor and are offered a job at Merril Lynch, you can't negotiate out of the noncompete. So you turn down the job and apply at Morgan Stanley and guess what?

It's still completely voluntary, which is why I asked. Your examples are of two wildly different things, but voluntary only has one definition.

You're right. For example, it's voluntary to be 100% ideologically rigid about a particular, say, political viewpoint regardless of the circumstances or any nuance surrounding an issue. It's also voluntary to be cavalier and maybe even a little callous about other peoples' circumstances.

Do you think asking questions about the role of government in private business transactions makes someone callous and cavalier about other people's circumstances? Are you suggesting that anybody who doesn't think this is a good idea is just a bad person? Just checking, because I definitely think this is a horrible idea. I was just hoping I could have a grown up conversation about it.

 

[psychobillies]

I'm not a lawyer, but if someone does something voluntarily

I mean, I guess you can voluntarily choose not take the job because you don't want to sign it, thereby volunteering to not make money and potentially default on your mortgage, or not eat well, or not get your kids new clothes, and continue your job search in the meantime, likely in an industry where all prospective employers will force you to make the same choice. So then that person is voluntarily not choosing to try a different career path/industry where this requirement is less likely.

Not everyone is in a position where they can laugh about it.

You don't have to guess about it. That's definitely a choice they get to make. Is it the role of government to take every minute aspect of everyone's life that may seem a little unfair and make regulations to protect them? Have we given up on personal responsibility?

I totally understand not liking them. I just don't think government should be involved at all.

Are you ok with monopolies? Same idea, different scale.

I do not agree that this is the same thing. That's like saying that anyone who supports this also supports full government control of every industry and all business contracts. Same idea, different scale.

 

[-fish-]

I'm not a lawyer, but if someone does something voluntarily

I mean, I guess you can voluntarily choose not take the job because you don't want to sign it, thereby volunteering to not make money and potentially default on your mortgage, or not eat well, or not get your kids new clothes, and continue your job search in the meantime, likely in an industry where all prospective employers will force you to make the same choice. So then that person is voluntarily not choosing to try a different career path/industry where this requirement is less likely.

Not everyone is in a position where they can laugh about it.

You don't have to guess about it. That's definitely a choice they get to make. Is it the role of government to take every minute aspect of everyone's life that may seem a little unfair and make regulations to protect them? Have we given up on personal responsibility?

I totally understand not liking them. I just don't think government should be involved at all.

Are you ok with monopolies? Same idea, different scale.

I do not agree that this is the same thing. That's like saying that anyone who supports this also supports full government control of every industry and all business contracts. Same idea, different scale.

One is an attempt to freeze out other companies from an industry; the other is an attempt to freeze out workers from an industry. This issue affects 20% of the American workforce. There's no way it isn't an issue that can and should be addressed by the government. This isn't something a free market can correct, because the entire point is to eliminate a free market.

 

[Phil Elliott]

People sign these things voluntarily, right? Why should a government bureaucracy involve themselves in private contracts between two consenting parties? If enough workers decide not to sign them, they would go away on their own.

Sure its "voluntary" but the decision isn't whether or not to sign the non-compete. The decision is whether or not you want the job (or the promotion, etc.)

Why did you need to put voluntary in quotes?

I didn't need to put it in quotes but wanted to note the important and obvious qualification which I stated. Signing a noncompete isn't necessarily "voluntary" in the same way that I voluntarily chose to eat an entire pizza last night while watching basketball alone on my couch. In many if not most business employment situations, the negotiation leverage is not equal. You take the job or you don't. If you're a young financial advisor and are offered a job at Merril Lynch, you can't negotiate out of the noncompete. So you turn down the job and apply at Morgan Stanley and guess what?

It's still completely voluntary, which is why I asked. Your examples are of two wildly different things, but voluntary only has one definition.

It's more a condition to get the job. If you don't sign it you will not keep your job.

 

[SWC]

every noncompete agreement that prohibits others from using brohan and its progeny and taking things to the bank remains in full force and effect take that to the bank brochachos

 

[psychobillies]

I'm not a lawyer, but if someone does something voluntarily

I mean, I guess you can voluntarily choose not take the job because you don't want to sign it, thereby volunteering to not make money and potentially default on your mortgage, or not eat well, or not get your kids new clothes, and continue your job search in the meantime, likely in an industry where all prospective employers will force you to make the same choice. So then that person is voluntarily not choosing to try a different career path/industry where this requirement is less likely.

Not everyone is in a position where they can laugh about it.

You don't have to guess about it. That's definitely a choice they get to make. Is it the role of government to take every minute aspect of everyone's life that may seem a little unfair and make regulations to protect them? Have we given up on personal responsibility?

I totally understand not liking them. I just don't think government should be involved at all.

Are you ok with monopolies? Same idea, different scale.

I do not agree that this is the same thing. That's like saying that anyone who supports this also supports full government control of every industry and all business contracts. Same idea, different scale.

One is an attempt to freeze out other companies from an industry; the other is an attempt to freeze out workers from an industry. This issue affects 20% of the American workforce. There's no way it isn't an issue that can and should be addressed by the government. This isn't something a free market can correct, because the entire point is to eliminate a free market.

It absolutely can be corrected by the free market. If nobody signs them, then companies that need employees will be forced to not use them. Lots of people go their whole lives without ever signing one, and they're doing just fine.

 

[Bogart]

Really need to dig into the details on this. I'm 15 months into a 5 year noncompete due to partaking in an equity event last year when the company I work for was sold. Had them write the noncompete in a way that I can go and do independent consulting, but have been turning away headhunters looking to fill my position in other companies.

 

[psychobillies]

People sign these things voluntarily, right? Why should a government bureaucracy involve themselves in private contracts between two consenting parties? If enough workers decide not to sign them, they would go away on their own.

Sure its "voluntary" but the decision isn't whether or not to sign the non-compete. The decision is whether or not you want the job (or the promotion, etc.)

Why did you need to put voluntary in quotes?

I didn't need to put it in quotes but wanted to note the important and obvious qualification which I stated. Signing a noncompete isn't necessarily "voluntary" in the same way that I voluntarily chose to eat an entire pizza last night while watching basketball alone on my couch. In many if not most business employment situations, the negotiation leverage is not equal. You take the job or you don't. If you're a young financial advisor and are offered a job at Merril Lynch, you can't negotiate out of the noncompete. So you turn down the job and apply at Morgan Stanley and guess what?

It's still completely voluntary, which is why I asked. Your examples are of two wildly different things, but voluntary only has one definition.

It's more a condition to get the job. If you don't sign it you will not keep your job.

Correct. Different jobs have different conditions.

 

[CletiusMaximus]

Really need to dig into the details on this. I'm 15 months into a 5 year noncompete due to partaking in an equity event last year when the company I work for was sold. Had them write the noncompete in a way that I can go and do independent consulting, but have been turning away headhunters looking to fill my position in other companies.

If you're turning down good opportunities, it could be worthwhile to consult with a local lawyer on this. For example, in my state these agreements are generally enforceable, but the courts have set a 2 year presumptive limit on the reasonable duration of the restriction. This new rule is not effective for 120 days and even them may be unclear depending on the pending lawsuits.

 

[jwb]

If it's a truly secret IP invented by the company, I get it (but there are already things in place to protect those). But if its easy to learn and replicate... how secret and unique can it really be? Can the IP be patented / copyrighted? Or is it more like a recipe?

I've also known business owners who had non-competes to protect things like "oh, that's who they buy their materials from", or "oh, they advertise there... that's clever". While I'm sure the owner doesn't want that stuff to get out, those really aren't secret IP's that the company owns, and should not be used to prevent someone from working at another company.

This is what I wrote over at the Discord where we're having a similar discussion.

"I run a small hedge fund who spec trades electricity futures. When I bring someone in, they typically have no experience in the energy industry let alone how to "trade electricity". Over the next few weeks/months I teach them about the industry as well as my own formula on building profitable trades. Once they have this knowledge, which took me years to build, it's not difficult for them to go out and replicate it on their own. In order to protect myself from a constant cycle of training up what becomes my competition, I have a 6 month non-compete which serves as a small deterrent. It's not in place to hold someone hostage but to provide some protection to what is life changing knowledge.

They know this up front as it's part of the employment agreement. If that's not something they're willing to accept, no big deal. They can pursue another job and I will pursue another trader. I'm offering people the chance to make $300K-$1M a year WFH low stress job that requires them to work less than 20 hours a week. I expect some concessions on their part."

So effectively I have a "recipe" that would enable someone to make a lot of money. They just need to be taught how. And no, I'm not hiring. Especially now.

I get it, and yes, that's a tough spot. Six months is pretty reasonable too - I can't argue with that.

Hit prettymuch all of us up when you need more traders

 

[-fish-]

I'm not a lawyer, but if someone does something voluntarily

I mean, I guess you can voluntarily choose not take the job because you don't want to sign it, thereby volunteering to not make money and potentially default on your mortgage, or not eat well, or not get your kids new clothes, and continue your job search in the meantime, likely in an industry where all prospective employers will force you to make the same choice. So then that person is voluntarily not choosing to try a different career path/industry where this requirement is less likely.

Not everyone is in a position where they can laugh about it.

You don't have to guess about it. That's definitely a choice they get to make. Is it the role of government to take every minute aspect of everyone's life that may seem a little unfair and make regulations to protect them? Have we given up on personal responsibility?

I totally understand not liking them. I just don't think government should be involved at all.

Are you ok with monopolies? Same idea, different scale.

I do not agree that this is the same thing. That's like saying that anyone who supports this also supports full government control of every industry and all business contracts. Same idea, different scale.

One is an attempt to freeze out other companies from an industry; the other is an attempt to freeze out workers from an industry. This issue affects 20% of the American workforce. There's no way it isn't an issue that can and should be addressed by the government. This isn't something a free market can correct, because the entire point is to eliminate a free market.

It absolutely can be corrected by the free market. If nobody signs them, then companies that need employees will be forced to not use them. Lots of people go their whole lives without ever signing one, and they're doing just fine.

I'm not a lawyer, but if someone does something voluntarily

I mean, I guess you can voluntarily choose not take the job because you don't want to sign it, thereby volunteering to not make money and potentially default on your mortgage, or not eat well, or not get your kids new clothes, and continue your job search in the meantime, likely in an industry where all prospective employers will force you to make the same choice. So then that person is voluntarily not choosing to try a different career path/industry where this requirement is less likely.

Not everyone is in a position where they can laugh about it.

You don't have to guess about it. That's definitely a choice they get to make. Is it the role of government to take every minute aspect of everyone's life that may seem a little unfair and make regulations to protect them? Have we given up on personal responsibility?

I totally understand not liking them. I just don't think government should be involved at all.

Are you ok with monopolies? Same idea, different scale.

I do not agree that this is the same thing. That's like saying that anyone who supports this also supports full government control of every industry and all business contracts. Same idea, different scale.

It's nothing at all like that.

Hopefully someone will be able to explain this issue in a way you understand. It is clear that you and I are not communicating clearly. Doesn't make you wrong or right, but let's stop wasting each other's time.

 

[Sand]

Once Jimmy Johns tried o keep fry cooks from leaving you knew the system was brokesor.

So ridiculous you just have to laugh at stuff like this. Funny enough I have no idea if I signed a non-compete. My area is so specialized I'd only really be of big value halfway across the country. I'm afraid to even ask HR that question - talk about a red flag.

 

[hooter311]

Insurance salesman says yippee!!!

 

[AAABatteries]

Once Jimmy Johns tried o keep fry cooks from leaving you knew the system was brokesor.

So ridiculous you just have to laugh at stuff like this. Funny enough I have no idea if I signed a non-compete. My area is so specialized I'd only really be of big value halfway across the country. I'm afraid to even ask HR that question - talk about a red flag.

There’s a lot of training involved in becoming a sandwich artisan.

 

[BeTheMatch]

My attorney (who I work for) deals with a lot of these, representing clients trying to get out of them or making sure they're not violating them. Her immediate reaction is this ruling just cost her a lot of money.

 

[bigbottom]

Really need to dig into the details on this. I'm 15 months into a 5 year noncompete due to partaking in an equity event last year when the company I work for was sold. Had them write the noncompete in a way that I can go and do independent consulting, but have been turning away headhunters looking to fill my position in other companies.

Sounds like a sale of business non-compete, which are exempted from this rule provided it’s a bona fide sale.

 

[bigbottom]

My attorney (who I work for) deals with a lot of these, representing clients trying to get out of them or making sure they're not violating them. Her immediate reaction is this ruling just cost her a lot of money.

Yes, this used to be about 50% of my practice until 7 years ago when I switched careers.

 

[bigbottom]

Really need to dig into the details on this. I'm 15 months into a 5 year noncompete due to partaking in an equity event last year when the company I work for was sold. Had them write the noncompete in a way that I can go and do independent consulting, but have been turning away headhunters looking to fill my position in other companies.

If you're turning down good opportunities, it could be worthwhile to consult with a local lawyer on this. For example, in my state these agreements are generally enforceable, but the courts have set a 2 year presumptive limit on the reasonable duration of the restriction. This new rule is not effective for 120 days and even them may be unclear depending on the pending lawsuits.

Does the two-year presumptive limit apply to sale of business noncompetes?

 

[krista4]

Really need to dig into the details on this. I'm 15 months into a 5 year noncompete due to partaking in an equity event last year when the company I work for was sold. Had them write the noncompete in a way that I can go and do independent consulting, but have been turning away headhunters looking to fill my position in other companies.

Sounds like a sale of business non-compete, which are exempted from this rule provided it’s a bona fide sale.

I was reading his post differently, in that a company he worked for was sold and he agreed to a non-compete linked to getting equity in the acquiring company. That wouldn't be part of the exception. But he can clarify which he meant.

 

[krista4]

Really need to dig into the details on this. I'm 15 months into a 5 year noncompete due to partaking in an equity event last year when the company I work for was sold. Had them write the noncompete in a way that I can go and do independent consulting, but have been turning away headhunters looking to fill my position in other companies.

If you're turning down good opportunities, it could be worthwhile to consult with a local lawyer on this. For example, in my state these agreements are generally enforceable, but the courts have set a 2 year presumptive limit on the reasonable duration of the restriction. This new rule is not effective for 120 days and even them may be unclear depending on the pending lawsuits.

Does the two-year presumptive limit apply to sale of business noncompetes?

Here's one where I can be of direct assistance. I believe Bogart is in Texas, and sale of business non-competes can be up to five years there. So given that, and seeing his is five years, maybe you were right in your interpretation of what happened!

 

[bigbottom]

Really need to dig into the details on this. I'm 15 months into a 5 year noncompete due to partaking in an equity event last year when the company I work for was sold. Had them write the noncompete in a way that I can go and do independent consulting, but have been turning away headhunters looking to fill my position in other companies.

If you're turning down good opportunities, it could be worthwhile to consult with a local lawyer on this. For example, in my state these agreements are generally enforceable, but the courts have set a 2 year presumptive limit on the reasonable duration of the restriction. This new rule is not effective for 120 days and even them may be unclear depending on the pending lawsuits.

Does the two-year presumptive limit apply to sale of business noncompetes?

Here's one where I can be of direct assistance. I believe Bogart is in Texas, and sale of business non-competes can be up to five years there. So given that, and seeing his is five years, maybe you were right in your interpretation of what happened!

Given that his non-compete was written in a way to allow him to do independent consulting, it sounds like he no longer works there. But you could be right!

 

[krista4]

Really need to dig into the details on this. I'm 15 months into a 5 year noncompete due to partaking in an equity event last year when the company I work for was sold. Had them write the noncompete in a way that I can go and do independent consulting, but have been turning away headhunters looking to fill my position in other companies.

If you're turning down good opportunities, it could be worthwhile to consult with a local lawyer on this. For example, in my state these agreements are generally enforceable, but the courts have set a 2 year presumptive limit on the reasonable duration of the restriction. This new rule is not effective for 120 days and even them may be unclear depending on the pending lawsuits.

Does the two-year presumptive limit apply to sale of business noncompetes?

Here's one where I can be of direct assistance. I believe Bogart is in Texas, and sale of business non-competes can be up to five years there. So given that, and seeing his is five years, maybe you were right in your interpretation of what happened!

Given that his non-compete was written in a way to allow him to do independent consulting, it sounds like he no longer works there. But you could be right!

Ah yes, I missed that part. You're probably right.

 

[fatness]

Hey @Sand, you've got me quoted as saying something I didn't say.
Not a big deal, editing multiquotes trips me up too.

 

[massraider]

These types of laws can have unintended consequences that sometimes leave the people they are intended to help worse off than they were before (the latest Freakonomics podcast has some discussion of this). Not necessarily saying that will be the case here (if the rule even ever goes into effect), but the analysis is (or at least should be) more complicated than your statement suggests.

Completely agree.

And looking to poke holes in any good idea IS a great idea, not a good idea. In our business, we go out of our way to poke holes in any good idea we come up with.

But this cuts both ways. I think people are only thinking about how this affects the people subject to a non-compete, and the companies that will no longer be able to enforce them.

What about the possible good unintended consequences?

• I can easily imagine a ACTUAL trickle down effect where you have more sharp people who start their own businesses (privately owned, not publicly---which they most likely came from). More small businesses is a good thing for a litany of reasons.
• Employers paying their employees better to keep them--they can buy better homes, they can employ more people, eat out more on and on and on
• Evidence that health care prices are driven up by non-compete and consolidation worth a quick read
• Video from Robert Reich ---super liberal take, to be clear

 

[the moops]

It absolutely can be corrected by the free market. If nobody signs them, then companies that need employees will be forced to not use them. Lots of people go their whole lives without ever signing one, and they're doing just fine.

Sometimes things are too far down the road to be corrected by the free market. If say 30 years ago (no idea when these became commonplace so just making that number up) everyone decided that these were ridiculous and they refused to sign them, then yes the free market could have titled in favor of the employee and these would become obsolete.

 

[psychobillies]

It absolutely can be corrected by the free market. If nobody signs them, then companies that need employees will be forced to not use them. Lots of people go their whole lives without ever signing one, and they're doing just fine.

Sometimes things are too far down the road to be corrected by the free market. If say 30 years ago (no idea when these became commonplace so just making that number up) everyone decided that these were ridiculous and they refused to sign them, then yes the free market could have titled in favor of the employee and these would become obsolete.

I guess we'll never know.

 

[the moops]

It absolutely can be corrected by the free market. If nobody signs them, then companies that need employees will be forced to not use them. Lots of people go their whole lives without ever signing one, and they're doing just fine.

Sometimes things are too far down the road to be corrected by the free market. If say 30 years ago (no idea when these became commonplace so just making that number up) everyone decided that these were ridiculous and they refused to sign them, then yes the free market could have titled in favor of the employee and these would become obsolete.

I guess we'll never know.

But we do know, don't we? Like things would have already corrected by now if there was just the simple option of "not signing"?

 

[the moops]

@psychobillies is your skepticism of this more to do with the fact that this was done by the FTC or the fact that it is a thing at all? Like if congress passed a law about this, would that be all good?

 

[psychobillies]

It absolutely can be corrected by the free market. If nobody signs them, then companies that need employees will be forced to not use them. Lots of people go their whole lives without ever signing one, and they're doing just fine.

Sometimes things are too far down the road to be corrected by the free market. If say 30 years ago (no idea when these became commonplace so just making that number up) everyone decided that these were ridiculous and they refused to sign them, then yes the free market could have titled in favor of the employee and these would become obsolete.

I guess we'll never know.

But we do know, don't we? Like things would have already corrected by now if there was just the simple option of "not signing"?

I was speaking more to the point about it being too far down the road to be corrected. Young people today have an incredible advantage when it comes to organizing with social media. If they started bitching about this like hey ***** about everything else, I'm sure it could gain some traction.

 

[psychobillies]

@psychobillies is your skepticism of this more to do with the fact that this was done by the FTC or the fact that it is a thing at all? Like if congress passed a law about this, would that be all good?

I would be more OK with it if it were a law, but I wouldn't like it either way. It's an unnecessary government intrusion into private transactions.

Listen, I don't think you guys have an unreasonable position, I just disagree with it. Some people think government should get involved in every little thing that they think is unfair, but I'd like to see less of that rather than more.

 

[Bogart]

Really need to dig into the details on this. I'm 15 months into a 5 year noncompete due to partaking in an equity event last year when the company I work for was sold. Had them write the noncompete in a way that I can go and do independent consulting, but have been turning away headhunters looking to fill my position in other companies.

If you're turning down good opportunities, it could be worthwhile to consult with a local lawyer on this. For example, in my state these agreements are generally enforceable, but the courts have set a 2 year presumptive limit on the reasonable duration of the restriction. This new rule is not effective for 120 days and even them may be unclear depending on the pending lawsuits.

Does the two-year presumptive limit apply to sale of business noncompetes?

Here's one where I can be of direct assistance. I believe Bogart is in Texas, and sale of business non-competes can be up to five years there. So given that, and seeing his is five years, maybe you were right in your interpretation of what happened!

Given that his non-compete was written in a way to allow him to do independent consulting, it sounds like he no longer works there. But you could be right!

Sorry guys. Didn't mean to be vague. I am still currently at the company. I hate it, but the salary is good and having structure and insurance (with my youngest in high school) over working for myself as a consultant is the best move. Going to a smaller company with less stress and less pay is enticing.

We had one person leave to go to a competitor, and our company fought the hire, but since his noncompete is only two years, the competitor is basically letting him redshirt the rest of his time and then start when over.

 

[bigbottom]

Really need to dig into the details on this. I'm 15 months into a 5 year noncompete due to partaking in an equity event last year when the company I work for was sold. Had them write the noncompete in a way that I can go and do independent consulting, but have been turning away headhunters looking to fill my position in other companies.

If you're turning down good opportunities, it could be worthwhile to consult with a local lawyer on this. For example, in my state these agreements are generally enforceable, but the courts have set a 2 year presumptive limit on the reasonable duration of the restriction. This new rule is not effective for 120 days and even them may be unclear depending on the pending lawsuits.

Does the two-year presumptive limit apply to sale of business noncompetes?

Here's one where I can be of direct assistance. I believe Bogart is in Texas, and sale of business non-competes can be up to five years there. So given that, and seeing his is five years, maybe you were right in your interpretation of what happened!

Given that his non-compete was written in a way to allow him to do independent consulting, it sounds like he no longer works there. But you could be right!

Sorry guys. Didn't mean to be vague. I am still currently at the company. I hate it, but the salary is good and having structure and insurance (with my youngest in high school) over working for myself as a consultant is the best move. Going to a smaller company with less stress and less pay is enticing.

We had one person leave to go to a competitor, and our company fought the hire, but since his noncompete is only two years, the competitor is basically letting him redshirt the rest of his time and then start when over.

So did you sign the non-compete in connection with selling your stock, or in connection with accepting employment with the acquiring company? If the latter, there aren’t many jurisdictions that would uphold a five year restriction, even without the FTC rule.

 

[Bogart]

Really need to dig into the details on this. I'm 15 months into a 5 year noncompete due to partaking in an equity event last year when the company I work for was sold. Had them write the noncompete in a way that I can go and do independent consulting, but have been turning away headhunters looking to fill my position in other companies.

If you're turning down good opportunities, it could be worthwhile to consult with a local lawyer on this. For example, in my state these agreements are generally enforceable, but the courts have set a 2 year presumptive limit on the reasonable duration of the restriction. This new rule is not effective for 120 days and even them may be unclear depending on the pending lawsuits.

Does the two-year presumptive limit apply to sale of business noncompetes?

Here's one where I can be of direct assistance. I believe Bogart is in Texas, and sale of business non-competes can be up to five years there. So given that, and seeing his is five years, maybe you were right in your interpretation of what happened!

Given that his non-compete was written in a way to allow him to do independent consulting, it sounds like he no longer works there. But you could be right!

Sorry guys. Didn't mean to be vague. I am still currently at the company. I hate it, but the salary is good and having structure and insurance (with my youngest in high school) over working for myself as a consultant is the best move. Going to a smaller company with less stress and less pay is enticing.

We had one person leave to go to a competitor, and our company fought the hire, but since his noncompete is only two years, the competitor is basically letting him redshirt the rest of his time and then start when over.

So did you sign the non-compete in connection with selling your stock, or in connection with accepting employment with the acquiring company? If the latter, there aren’t many jurisdictions that would uphold a five year restriction, even without the FTC rule.

The former. I signed the non-compete to get the bag. Equity shares that were the carrot on the stick for 8 years, payable upon sale of the company.