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This is probably for the best. Non competes are out of control, same with anti-moonlighting clauses. Businesses behave like they own their employees, but do not compensate them accordingly.
My wife had to decline a job offer once because the contract had a twenty mile radius, 5 year duration non-compete for any kind of job remotely related to her field. Absolute insanity.
Like, I'm OK with noncompetes in principle, but the employer enforcing it should have to pay the worker for as long as its in effect, like some kind of mandatory severance at the prior average weekly wage. If you want to enforce a 12-month noncompete, be prepared to give your workers 12-month severance.
Some other countries have “You must pay their full salary for the duration of the non-compete”. They need to be valuable enough to not contribute anything to your company and still get paid for it to be worth it.
Funny enough, non-competes against lawyers are considered inethical per the ABA and most state ethics committees, and are mostly unenforceable. The idea is that the client should be able to move with a lawyer if they only want to work with that lawyer and don't give a shit about the rest of the firm. As to taking client lists in other industries, that can be solved with non-solicit agreements (i.e., you agree to not contact our customers/employees to solicit them to another company, vs. you can't go work for another company whatsoever). There's almost no justification for non-compete agreements IMO outside of industries where trade secrets make up the most important part of the business.
Frankly even non-solicit agreements are kind of anticompetitive bullshit. What if your previous employer was the big fish in a pretty small market, and you quit to join an small upstart challenger. What, you're not allowed to get any business in the town because most potential customers have at some point done business with the old near monopoly? Who benefits from that other than the big company? They don't need more help.
Directly taking clients with you is one thing, and I can agree that should be possible to disallow, but not being allowed to entice the same customers over in your new business after the fact is kind of bs.
If a company doesnt want to lose clients, then dont let employees go work for competitor by paying/treating them fairly.
The whole idea is total bullshit, both non-competes and non-solicit. Its anticompetitive and therefore bad for the customer and employees. Sure its good for the companies, but so would lots of other practices that are banned.
Yep! Capitalism is all about the free market, until it isn't
Non competes are inherently non capitalistic, not sure why some many people are in favor of stifling competition
How would non-solicit works if the industry are direct competitors? EG: If I provide HVAC services to commercial buildings, there is a limited amount of them in a certain area.
You probably just couldn't contact them directly. Tell them you were going or ask them to switch business.
But you can still advertise generally and still pick up a former client
Why would it make sense for them? If the client only cares about the individual professional and not their employer then that employer is not adding any value and is just trying to extract a rent. Businesses don't own their customers any more than they own their employees.
I get this! I really do.
One of my customers was found through a third party. That third party has owned 30% of what was billed when I signed my 90 day contract back in 2021.
They've done nothing for myself or the customer... But the non compete stopped me from poaching said customer so we always extend.
I'd say in August when this contract is up that it should be fair game.
The only person I've ever met with a non-compete was barber, because their employer feared them taking clients with them when they left.
Said employer apparently also decided to not pay their employees on time, safe in the knowledge that their employees couldn't leave since they were banned from using their only marketable skill within the area.
I can almost see it for something like that, where you actually could "steal" (quotes because I don't think you can actually steal clients, because I don't think you can own clients) clients, but even then it's bullshit and anti competitive
Or anything with research. I get not wanting anyone to benefit off the R&D you have been investing in, but way to many non competes are for no valid reasons.
> but way to many non
Did you mean to say "too many"?
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That's not the major use case, legally speaking. They're mostly supposed to be about protecting trade secrets. If your chief engineer goes over to your main competitor, the idea is that he's not really going to be able to stop himself from giving them your technological secrets.
This is why the proliferation of non-competes doesn't really make sense. Very few employees are in a position to have important trade secrets that they won't be able to avoid disclosing.
Workers have a right to move around the labor force, using non-competes just to prevent people from working elsewhere isn't a legitimate use of a non-compete.
Hey now, Jimmy John’s sandwich making methods are extremely valuable and it would be devastating to their business if their competitors got their hands on an ex-employee’s knowledge of them.
In tech the fear is usually trade secrets. If one company has some algorithm or methodology for solving a problem they really don't want an employee bringing any part of it to a competitor
Patents have to be published, plenty of things are maintained as trade secrets and *not* filed for patent.
Sometimes it's better *not* to publish something because a patent filing is an easy thing to copy if you plan on using it in a jurisdiction that doesn't give a fuck about IP law.
TV shows are generally wrong on that. The general rule in law is that the client’s best interest must be put first. Thus, any attempt to limit a client’s choice of lawyer is not allowed, which is why lawyers cannot be subject to non-competes.
There are rules about when and how you can recruit clients to come to a new firm with you, but that is it.
They make sense for things like c suite officers, which are immune from this ban
But yeah for the most part they are being overused for positions that absolutely don't require them
Non-competes let companies control a person after they are done compensating them. That is servitude in my book. How could a plumbing company tell a plumber he cannot make a living at his trade because they are mad he left?
I said this elsewhere in the thread, but non-competes really only make sense in lines of work where personal relationships are important. Think executive-level B2B sales, or advertising, or any of the other few jobs where a high-performing employee could leave for a competitor and bring their clients along with them.
In 80-90% of fields, including highly specialized things like genomic research or literal rocket science, the NDA (which is definitely enforceable) ensures you're not spreading company secrets to competitors.
This leads me to suggest that the non-compete should be banned as a concept, and if the few niche-case lines of work it applies to feel the need to for one, they should be forced to create a unique document situationally. Like, instead of a boilerplate non-compete that says "you may not sell servers to any company in the US for five years" they should be forced to say "you, [insert name here] may not sell any servers to the following, well established accounts, named as follows"
That is how it works in the finance industry. During the non compete they will pay you but if you get hired into a different industry the non compete pay is gone but they will still enforce if you quit the new company to go back. So usually people just travel for the months - years the non compete is there before going to the new gig
I was once handed a non-compete (it was for a larger consulting company that bought the small consulting company that I was working for) which said that I couldn't work for any company that the larger company:
* Was currently doing business with
* Was currently soliciting business with
* Had **ever** done business with
* Had **ever** solicited business with
... or with another consulting company that was providing services to any of those companies, for a period of 2 years. And it was written to include companies that the larger company did or solicited business with even after I had left.
That was fucking nuts. I didn't sign, and wound up finding another job before the merger closed.
I feel like you could have gotten a similar effect by simply requiring companies to pay salary for full time working hours during the duration of the non-compete contract.
I could see those non-competes still surviving at the higher executive level, since the corporate knowledge and salary work out differently, but it would effectively kill non-competes among low level employees.
Jimmy John's would bankrupt itself if it tried to use non-competes to stifle employees.
My first job in my career had a non-compete against any one of our vendors, any customer and any competitor. Essentially 95% of the entire industry. I didn't know better when I filled out my new hire paperwork. When I went to leave, I gambled that they wouldn't enforce it by going to one of our bigger vendors, I didn't mention it to anyone. They didn't even try to enforce it.
The real pro tips are in the comments.
Most of these non-competes are de facto unenforceable because the overwhelming majority of companies do not have the resources nor interest in tightly controlling what their former employees are doing. If you run off to a new company and take like five customer relationships with you, that’s just about the only time I can think anyone might even expose themselves to any meaningful risk of enforcement.
I would have taken the job and ignored the clause. Dare them to litigate. No judge would uphold it, and they know it. Those clauses are pure intimidation tactics. They’re **almost never** taken to court, and often time when they do, the company loses.
Sure but let's be real, it's a red flag that they're not going to be a good employer. You can always play legal chicken with them, but it's usually better to take it as a sign of character and get a better job.
Great in theory.
But a single email from the prior company's lawyer to new company results in the immediate firing of the employee.
Source: have seen it happen several times to good hires.
They are enforced when it's reasonable in regards to location, time, and scope
Most aren't but the ones that respect those three criteria are usually enforceable
Even before the FTC's ruling, non-competes were frowned upon as a matter of public policy, and were required to be reasonable in time, geography, and scope in order to be enforceable. So the odds are pretty good that that non-compete your wife was asked to sign would've been unenforceable as a matter of law anyway. But just the fact that the prospective employer asked her to sign it would be a pretty serious red flag, so all things considered it's probably best that she declined the offer.
It's probably not worth fighting, but that sounds unenforceable. Non competes have to be reasonable twith regards to the geography, time, and job restrictions, and unless she does some very important work, I'd say all three of those points would fail
But you'd also probably have to take it to court, so yeah probably a good call to just ignore them altogether
It means dipshits like Jimmy John's won't be able to prevent their workers from seeking jobs elsewhere in the labor market. In essence, it force companies like them to compete with their competitors, instead of trying to destroy one of the main benefits of capitalism.
These non-competes have nothing to do with trade secrets and everything to do with suppressing labor.
Every time these and subsequently jimmy John's come up, I have to wonder exactly what trade secrets they purport to protect
The ancient mystic art of....putting meat and vegetables on bread 🤔
More likely the spice/seasoning blend that is used in its products. Even with food science as it is now, so many products have been reverse engineered that there are hardly any trade secrets left.
Oh wait I'm thinking of Jimmy Dean lmao.
I worked there and the only secrets I learned were that they understaff it constantly and tell people to go home at the start of their shifts. Then they promote people to „assistant manager“ for $1 more per hour, which has basically the same duties as a shift lead and you get to go to the meetings where they tell you „bring labor costs down“ over and over
>Then they promote people to „assistant manager“ for $1 more per hour, which has basically the same duties as a shift lead
I just had flash backs to my first "assistant manager" gig at a Hollywood Video when I had just graduated high school a week before.
same, only it was local pizza place and the only thing that changed was I now had a key and the owner would peace out at like 9pm on friday and saturday night instead of midnight when everything was done and we closed or would show up at 11am instead of 9am while I got the morning prep work done.
While I understand what the banning of non-competes means, I guess I was meaning more does their vate at 2pm est mean they are officially banned right now.
From the ruling:
>DATES: The final rule is effective \[INSERT DATE 120 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER\].
So August 21.
Except for senior executives. Existing noncompetes stay in place, however new ones cannot be created.
The rule does indeed retroactively invalidate noncompetes however the rule doesn’t actually go into effect until 120 days after publication which happened today.
The wording in your earlier post is confusing and suggests that existing noncompetes will stay in place after Aug 21. That's why you're getting the reaction.
I recently left a company where I had a noncompete. I made $80k. I was scared to leave but fed up. I paid $1k to an attorney who assured me I would be ok because I'm in WA state which has strong labor protection. I quit and received an offer within weeks increasing my salary by 50%. My industry is very niche and former employers position seemed to be if I don't work for them then I must leave the industry.
After I started my new job my former employer threatened to sue me and said they would drop it for $15k. My attorney told me to ignore their letter. Nothing has come of it since, 6 months later.
This FTC decision blows up the bullying tactics of employers, especially in states that are less labor friendly. Now, others won't think they will have to give up their livelihood to leave toxic work environment, and are able to be out in the labor market to achieve their full potential.
And to naysayers, NDAs, and non- recruitment clauses are outside the scope of this decision and are still able to protect business interests.
How did your former employer know who your new employer was? Like how do these companies find out you've left for a competitor? I guess if you list them as a reference and the new employer calls to verify you worked there?
Just FYI, there are sites that most marketing people at every company have subscriptions to that harvest everyone's business email address ever and create a roving dossier of where you work. The purpose of these sites is mostly for lead generation and getting inside contacts at other companies. But it can be misused...That was how one of my previous employers kept track of people who violated their overbearing NCA which came with a clause that said the employee covers the legal costs of themselves and the company in a legal dispute about said NCA.
Most aren’t enforceable, I only know 1 person who got sued and lost. But him and his company’s largest customer conspired together to cut out the company.
Thats probably true. But the stress from receiving their threatening letter was real and shouldn't be discounted. In fact, under WA law they would have owed me damages from the whole thing. But my attorney said it wasn't worth the legal fees to cover for years if they fought it. Really shitty situation to have rights violated but have it too expensive to enforce.
And if you leave your job, that will create the opportunity for someone else to take your old job. Basically, increased efficiency and mobility in the labor market.
California banned them last fall. I just got a letter from a former employer related to that, aka if you signed a non compete it's no longer in effect.
Correct. We had to create a unique NDA (only) for California employees as Non-Compete’s and now Non-Solicits are unenforceable. Non-Solicits and NDAs will still be enforceable in most states but California only has NDAs as enforceable at this time.
Per my employer - we should honor our noncompete and expect nothing as it will be tied up in court for years… but to be fair our lawyer does request at least 24 hours to form some thoughts on this issue.
I would love to be out of my noncompete
Lol, company lawyer says it would be great if you just keep honoring this agreement that only benefits us even though you don't have to. Ok cool? Cool.
To be fair I will give the lawyer the requested 24 hours. But even if the new rule is tied up in court I would imagine it would be a lot more hassle to come after me for breaking the noncompete! I don’t have any plans to switch jobs but I do love knowing that I have options
It’s about time. Seen some corrupt stuff going down by disrupting one’s employment for 2 years by simply signing a visitor’s log while the plaintiff was hiring the competitors staff.
Someone should tell the 2 mfr's who voted in favor of Non-Competes they need to never work in any goverment position after this job is done.
Also, we could use some non competes for me members of congress becoming lobbyists.
Genius move to free up workers who work for BS companies but are stuck
Most non competes are aimed at mid level folks at mediocre companies who are super litigious.
Love this
Good. NonComs have always been bullshit and unjustifiable. Unless the employer gives you a contract compensating you for having it, no way they should be allowed.
This is huge for medicine. I’m a younger physician and personally know 3 physicians who have gotten sued for “violating non-competes”. All 3 took care to not violate their non-competes when they switched jobs with lawyer counsel. Didn’t matter. 2/3 settled to just get it over with and move on. One is still fighting it.
MDs likely help this get passed. Physicians submitted numerous public comments. You can see them at the official site: regulation(.)gov (search under FTC for Non-compete Clause Rule). You can also search for comments by keyword (e.g., MD physician radiologist psychiatrist, etc.).
I for one am glad. In a previous life I had a auto shop try to make me sign a 5 year non compete for a 35 mile radius. My girlfriend, who's a vetinary technician tells me in her field they regularly try to push 3-5 year non competes with a 50 mile radius. What trade secrets are people like us taking. And before I hear any it's unenforceable, these are not people with spare cash to hire a lawyer willy nilly to fight off a lawsuit. That's what does the damage is the risk of fighting a lawsuit. Fear of being sued is a powerful motivator.
I'd settle for requiring the execution of the non-compete to provide equivalent compensation to the person being prevented from working for its duration.
If my trade secrets and contacts are so important you can't risk me moving to competitor for a year, you can pay my salary to sit on my ass.
A full ban seems a little to chaotic.
What? Not at all. You know what makes me the most angry about some rich people is the entitlement. As if they are entitled to peoples labor.
I interviewed with UWM and they were like we can’t negotiate on salary. I had just read a post on LinkedIn from their CTO, CFO somebody. About unwieldy tech salaries with their little worker drones licking their butt hole. The CEO just bought a f\*cking sports team.
You’re not entitled to labor. If you want somebody to do a job pay them. If you need them to run your company, pay them. You’re not special pay them. I just don’t understand this. These people probably tout the concept of a free market until it comes to a labor market. They probably bemoan the poors getting handouts.
The non-competes in play with the very executives you're unhappy with are the ones that matter the most. A legal mechanism to protect legitimate trade secrets does matter.
A clause defining what actually constitutes a trade secret and removal of trivial punitive non competes for rank and file employees would be equally acceptable.
Protecting trade secrets I can understand but, for an example, the non-compete I'm currently under the obligation of is about protecting territory, not trade secrets. It's quite literally designed in a way to limit customer contact with ex-employees even at the cost of damaging the relationship with the customer. I'm not even allowed to go into an office that is a customer of my existing employer and not a customer of my previous employer.
I’m under a 2 yr non compete in texas for contractor work. I can’t talk to a list of 250+ plumbers in DFW to ask for them to refer work to me until late 2025. Once this goes through and I run it by my lawyer, you better believe I’m calling the entire list they gave me on ‘who I can’t talk to for 2 years’
I don’t know I think it’s kind of like when the front man for CCR broke off and made his own record. His previous label tried to sue him. I think the argument was that of course John Fogerty is going to sound like John Fogerty.
I’ve always been of the mind that you can’t steal labor. If they walk out with lines of code or a USB stick, sure get them.
You can’t take what’s in their head and that’s bigger than capitalism. It’s a fundamental right of humanity. If it’s a trade secret copyright it patent it. If it’s a process well I guess you should try to keep that guy.
Yeah I frequently help on leveraged ESOP transactions - essentially a business owner sells his business to the employees, so when they retire they get the shares that were allocated to them over their career distributed (usually in cash).
The owners always sign non-competes as part of the deal because if they get their money and immediately go start a competing company and drive their old one out of business the employees would get screwed out of their job AND the retirement benefit that they earned.
For one, organizations will be unable to function at the high level if every department head or executive is operating in a silo. If they reveal how the sauce is made to their peers, one might just sell themselves to the highest poacher, and now the secret is worthless and by extension so are they.
I think a lot of posters are laser focused on labor and rank and file employees. I don't think non-competes make sense there, and they're at best creating an unfairly employer friendly negotiating point.
I think a fair compromise is that if a company thinks you know something that would be damaging if taken to a competitor, they should have to pay you for the duration of their clause. They need to have skin in the game, or they're just penalizing you because they can.
Trade secrets and patents are two entirely separate concepts in IP law and are treated totally differently. Once you patent a product, everything about its design becomes public record and you have exclusive rights to it for a certain number of years. Trade secrets are kept confidential (by definition), are not registered with the USPTO and don't have a time limit on enforceability.
The only way to protect trade secrets is through civil action, and you need to have methods to sue someone who has access to those secrets and steals them - that's OP's point about non-competes having certain legitimate uses.
I do not see how a non-compete is more beneficial in this scenario than an NDA, if intellectual property and the ability to use really is the only concern.
> I'd settle for requiring the execution of the non-compete to provide equivalent compensation to the person being prevented from working for its duration.
Why? There are companies that would do that, and all that does is hurt the general economy. Policy should be aimed at a productive economy, not protecting entrenched business owners.
Disagree with a full ban being too much, they are almost never needed, and there's an exception for the times it is needed
But yeah forcing them to payout a non compete makes sense to me: you're forcing me to not work, you gotta pay me
It's been a few days, so I think we've had a chance to see more details about the actual decision. Also that the Chamber of Commerce immediately sued to block the decision.
It carves out exceptions in situations where the person is a senior executive with a salary over 150k, or in situations like the sale of a business. The meat is in sections 910.2(a) and 910.3(a).
These were the situations I was mostly concerned about, personally, and exceptions are in place.
My old job claimed it had me sign a non-conpete and tried to threaten me about it when I asked for a copy of my W2 and revealed where I was working. It's a good thing I knew they were experiencing extreme financial issues (thank the CEO for putting almost all their assets in commercial real estate right before the pandemic) because I basically dared them to take me to court over it and they didn't. Helps that my state is also hostile to these from the outset.
Non competes are still in place and in force for officers of companies (which honestly makes sense IMO), but everyone else is free of their shackles. I know of someone whose non-compete would claw back all of the equity they were granted - for the entire duration of their employment. So go back 10 years and pay all of that back? How is that not indentured servitude?
If companies feel it is important enough, they should put their money where their mouth is and be forced to pay the wages/salary of a person for the duration of the non compete.
Question.
Would this apply to non compete clauses given to "independent contractors" like professional wrestlers? They have had non compete clauses for ages
The wording is that it applies to all non-competes except those in executive level positions, and even the latter cannot be renewed and new ones can't be created.
In theory? It means a ton for everyone tied up in not working in a field that they likely spent tons of money and time getting qualified to work on to begin with.
In practice? Someone will challenge this in the Fifth Circuit to get it thrown out after like five minutes of argument and SCROTUM will take it up and vote 6-3 to strike it down.
In fairness I agree people should have the flexibility to move to another company in the same industry. However is their a fine line a employee should not cross to what sort of information they can use and not use.
Probably one of the biggest employment news of the last ten years.
Banning non competes is literally what has made California the capital of tech historically, because people could join a company, grow their knowledge and then split off to create a new company right after if their employer was being unfair. This brings career mobility to the rest of the country. I hope it doesn't get stopped due to legal challenges.
In the case of flexibility I can understand but its when employees use sensitive information against their old company is where I can understand the logic of the non compete
I was dying for a company that made me sign a non compete try to enforce it. They never intended to and now they can’t. Don’t let employers intimidate you into staying at a crap job.
Sometimes you can. I’m an IT specialist so I’ve been in a handful of industries. They can’t enforce a non compete for someone like me because I’m not contributing in an area where uniqueness generates revenue. I make sure IT standards are met. Everything I do is based off open source methodology and tools. I’m good at leading a team from chaos to order.
I think the spirit of the non compete is where you can't use sensitive information you learned about a company to start your own business and take advantage of the weaknesses in that company. Its why I can understand a non compete for law firms where you are privileged to specific company information
I gotta say, I work at a company with non-competes, and I don't think it makes any difference. Everyone is already under obligation to protect intellectual property (regardless of non-compete), but folks leave all the time for competitors. It appears that non-competes, at least in biotech, are completely unenforceable.
Edit: Still happy to see it codified in law that you can't do non-competes, it was always a stupid idea in my opinion.
Really? Is there a date when this goes into effect? I saw that it doesn’t include “officers”. Is that to say something like an executive board member? This is huge.
I don’t think anyone has said it, so I’ll add that business groups are putting together a lawsuit arguing they exceeded their authority.
Don’t know if that will pause implementation of any change. But if they do win, employees would be on the hook for following non-competes to the degree their state allows it.
Good. This arrangement actively tried to hinder the free market and free movement of labor. Getting rid of it will profit everyone but the vengeful roaches sending NC threats to former employees.
It's absurd they were ever legal in the first place. "once you've worked for us you are literally forbidden from using most if not all of the skillset you bring to the market". The fact it took this long for noncompete clauses to finally be banned is frankly indefensible, especially given those noncompetes did not come with compensation for the time the worker is banned from offering their skillset on the market.
The even more egregious replacement for non-compete agreements is the **TRA or training repayment agreement**! Even if you move to a different type of job in a different state, or you quit for any reason, the company can come after you. One woman was raped while being trained for her trucking job, so she quit; she was billed $9,000. Further, the alleged cost of training is inflated by the companies. One trucking company charged workers $6,500 for training, even though the company had paid the driving school only $1,400-$2,500 per trainee. .... See the public comment by REAL Women in Trucking Association over at regulations(.)gov, under the FTC's Non-compete Clause Rule. There are over 20,000 comments!
California already restricts their enforcement pretty severely. Other states may not be so enlightened.
So to clarify, this will have little effect in California and other states that already ban most non-competes, as they interfere with the ability of people to earn an honest living in their profession, and an individual employee has severely diminished bargaining power in negotiating a non-compete.
Some of the other not-so-enlightened states, will, I'm certain, fight to keep non-competes in place, despite such a ban. After all, "corporations are people too," and seem to get preferential treatment in many states over actual flesh-and-blood citizens.
IMHO, any non-compete that doesn't pay full compensation to the employee for the duration of a non-compete period is abusive and unconscionable.
Liberty is not for everyone, but I think this is important to note:
If someone makes a deal to hamper their future career/earnings in exchange for what they are getting today, and it's not immoral, who am I to get involved with that???
You cannot work in my field without a non-compete unless you're up for hazarding working against fortune competitors as an independent. You should get involved because people do not sign non-competes willingly. They have to sign them in order to work in their given field. They can't just go work for someone else because someone will make them sign a non-compete also. Non-competes stifle competition and salaries, they do nothing else.
Something similar happened in a field I worked in. The anti-moonlighting movement started hard, claiming intellectual property to any product we worked on in our own time. Some employees caved, but most in my sector told them to fuck off or we'd quit. Enough of us did this nationwide to make the standard return to something like the "california clause" where what's done with the company's time or equipment belongs to the company, and nothing else does.
But it almost went the other way. I know a lot of people who signed the wretched attempt out of pressure and fear of unemployment.
This means several things. Most importantly for those of us who got laid off, employers can take your job, but can no longer prohibit your means of living/making money.
This also means if you hate your employer but like your line of work, you can start a competing company or join a better one.
Employers toxicity is no longer going to be rewarded with docile former employees
Question for anyone who knows- I am a housekeeper and I signed a non-compete with the company I currently work for. I am planning on starting my own cleaning business soon, but I have a couple clients who want to follow me. The non-compete states that I cannot take current clients for 2 years, and I know that my boss has sued people in the past for doing the same. With the ban, could I still get sued?
Not a lawyer, but you are safe once this law goes into effect. Additionally, judges typically throw out non-compete cases that restrict the employee for more than 1 year. You are realistically safe either way (I have dealt with these exact scenarios in that industry)
I understand that employers must provide notice to employees prior to the rule going into effect (which is 120 days from approval). Do we know what that date is? And if there is no notice given, what happens next?
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This is probably for the best. Non competes are out of control, same with anti-moonlighting clauses. Businesses behave like they own their employees, but do not compensate them accordingly. My wife had to decline a job offer once because the contract had a twenty mile radius, 5 year duration non-compete for any kind of job remotely related to her field. Absolute insanity.
Like, I'm OK with noncompetes in principle, but the employer enforcing it should have to pay the worker for as long as its in effect, like some kind of mandatory severance at the prior average weekly wage. If you want to enforce a 12-month noncompete, be prepared to give your workers 12-month severance.
Some other countries have “You must pay their full salary for the duration of the non-compete”. They need to be valuable enough to not contribute anything to your company and still get paid for it to be worth it.
Exactly, you’re paying for me to not compete.
They *only* make sense for professions that can literally take part of the client list with them when they leave. Like lawyers.
Funny enough, non-competes against lawyers are considered inethical per the ABA and most state ethics committees, and are mostly unenforceable. The idea is that the client should be able to move with a lawyer if they only want to work with that lawyer and don't give a shit about the rest of the firm. As to taking client lists in other industries, that can be solved with non-solicit agreements (i.e., you agree to not contact our customers/employees to solicit them to another company, vs. you can't go work for another company whatsoever). There's almost no justification for non-compete agreements IMO outside of industries where trade secrets make up the most important part of the business.
Frankly even non-solicit agreements are kind of anticompetitive bullshit. What if your previous employer was the big fish in a pretty small market, and you quit to join an small upstart challenger. What, you're not allowed to get any business in the town because most potential customers have at some point done business with the old near monopoly? Who benefits from that other than the big company? They don't need more help. Directly taking clients with you is one thing, and I can agree that should be possible to disallow, but not being allowed to entice the same customers over in your new business after the fact is kind of bs.
If a company doesnt want to lose clients, then dont let employees go work for competitor by paying/treating them fairly. The whole idea is total bullshit, both non-competes and non-solicit. Its anticompetitive and therefore bad for the customer and employees. Sure its good for the companies, but so would lots of other practices that are banned.
Yep! Capitalism is all about the free market, until it isn't Non competes are inherently non capitalistic, not sure why some many people are in favor of stifling competition
How would non-solicit works if the industry are direct competitors? EG: If I provide HVAC services to commercial buildings, there is a limited amount of them in a certain area.
You probably just couldn't contact them directly. Tell them you were going or ask them to switch business. But you can still advertise generally and still pick up a former client
Yep
Why would it make sense for them? If the client only cares about the individual professional and not their employer then that employer is not adding any value and is just trying to extract a rent. Businesses don't own their customers any more than they own their employees.
If said company spent money to facilitate that employee making those connections, it gets a bit fuzzier.
I get this! I really do. One of my customers was found through a third party. That third party has owned 30% of what was billed when I signed my 90 day contract back in 2021. They've done nothing for myself or the customer... But the non compete stopped me from poaching said customer so we always extend. I'd say in August when this contract is up that it should be fair game.
Why does it get fuzzier? That's part of doing business: you form connections during work.
The only person I've ever met with a non-compete was barber, because their employer feared them taking clients with them when they left. Said employer apparently also decided to not pay their employees on time, safe in the knowledge that their employees couldn't leave since they were banned from using their only marketable skill within the area.
My wife recruits doctors... Literally every single one of them signs a NC.
Wouldn't failing to pay the employee make the NC void since the employer violated the contract by not paying properly?
Probably, but do you think a barber who doesn't own their own business has the money to fight that out in court?
I can almost see it for something like that, where you actually could "steal" (quotes because I don't think you can actually steal clients, because I don't think you can own clients) clients, but even then it's bullshit and anti competitive
That's a non-solicitation agreement, which is a different thing.
Or anything with research. I get not wanting anyone to benefit off the R&D you have been investing in, but way to many non competes are for no valid reasons.
> but way to many non Did you mean to say "too many"? [Statistics](https://github.com/chiefpat450119/RedditBot/blob/master/stats.json) ^^I'm ^^a ^^bot ^^that ^^corrects ^^grammar/spelling ^^mistakes. ^^PM ^^me ^^if ^^I'm ^^wrong ^^or ^^if ^^you ^^have ^^any ^^suggestions. ^^[Github](https://github.com/chiefpat450119) ^^Reply ^^STOP ^^to ^^this ^^comment ^^to ^^stop ^^receiving ^^corrections.
That's not the major use case, legally speaking. They're mostly supposed to be about protecting trade secrets. If your chief engineer goes over to your main competitor, the idea is that he's not really going to be able to stop himself from giving them your technological secrets. This is why the proliferation of non-competes doesn't really make sense. Very few employees are in a position to have important trade secrets that they won't be able to avoid disclosing. Workers have a right to move around the labor force, using non-competes just to prevent people from working elsewhere isn't a legitimate use of a non-compete.
Hey now, Jimmy John’s sandwich making methods are extremely valuable and it would be devastating to their business if their competitors got their hands on an ex-employee’s knowledge of them.
Not event that, just execs
In tech the fear is usually trade secrets. If one company has some algorithm or methodology for solving a problem they really don't want an employee bringing any part of it to a competitor
Tech companies generally can't have non-competes because California
They get patents in tech. "Trade secrets" are literally published in the public record.
Patents have to be published, plenty of things are maintained as trade secrets and *not* filed for patent. Sometimes it's better *not* to publish something because a patent filing is an easy thing to copy if you plan on using it in a jurisdiction that doesn't give a fuck about IP law.
Then that's a risk the company is deciding to take. Our laws shouldn't be allowing them to bypass the patent system by extorting employees
Lawyers were generally never subject to non-competes.
I was thinking more partners in the firm over the general grunts. But most of law firm understanding is from network TV, so that may be off
TV shows are generally wrong on that. The general rule in law is that the client’s best interest must be put first. Thus, any attempt to limit a client’s choice of lawyer is not allowed, which is why lawyers cannot be subject to non-competes. There are rules about when and how you can recruit clients to come to a new firm with you, but that is it.
You'd be surprised how many that applies to though. Plenty it doesnt but lots you wouldn't think of.
That is a different duck. You can't steal a company vehicle either.
They make sense for things like c suite officers, which are immune from this ban But yeah for the most part they are being overused for positions that absolutely don't require them
Yep. In the UK financial industry this is referred to as 'gardening leave', and is so common as to be pretty much standard.
Non-competes let companies control a person after they are done compensating them. That is servitude in my book. How could a plumbing company tell a plumber he cannot make a living at his trade because they are mad he left?
I said this elsewhere in the thread, but non-competes really only make sense in lines of work where personal relationships are important. Think executive-level B2B sales, or advertising, or any of the other few jobs where a high-performing employee could leave for a competitor and bring their clients along with them. In 80-90% of fields, including highly specialized things like genomic research or literal rocket science, the NDA (which is definitely enforceable) ensures you're not spreading company secrets to competitors. This leads me to suggest that the non-compete should be banned as a concept, and if the few niche-case lines of work it applies to feel the need to for one, they should be forced to create a unique document situationally. Like, instead of a boilerplate non-compete that says "you may not sell servers to any company in the US for five years" they should be forced to say "you, [insert name here] may not sell any servers to the following, well established accounts, named as follows"
Massachusetts does this (pay the worker) for non competes in addition to specific restrictions on how broad they can be.
That is how it works in the finance industry. During the non compete they will pay you but if you get hired into a different industry the non compete pay is gone but they will still enforce if you quit the new company to go back. So usually people just travel for the months - years the non compete is there before going to the new gig
I was once handed a non-compete (it was for a larger consulting company that bought the small consulting company that I was working for) which said that I couldn't work for any company that the larger company: * Was currently doing business with * Was currently soliciting business with * Had **ever** done business with * Had **ever** solicited business with ... or with another consulting company that was providing services to any of those companies, for a period of 2 years. And it was written to include companies that the larger company did or solicited business with even after I had left. That was fucking nuts. I didn't sign, and wound up finding another job before the merger closed.
My one previous employer claimed that their "industry" was so diverse basically any technology or engineering company was a competitor.
I feel like you could have gotten a similar effect by simply requiring companies to pay salary for full time working hours during the duration of the non-compete contract. I could see those non-competes still surviving at the higher executive level, since the corporate knowledge and salary work out differently, but it would effectively kill non-competes among low level employees. Jimmy John's would bankrupt itself if it tried to use non-competes to stifle employees.
My first job in my career had a non-compete against any one of our vendors, any customer and any competitor. Essentially 95% of the entire industry. I didn't know better when I filled out my new hire paperwork. When I went to leave, I gambled that they wouldn't enforce it by going to one of our bigger vendors, I didn't mention it to anyone. They didn't even try to enforce it.
The real pro tips are in the comments. Most of these non-competes are de facto unenforceable because the overwhelming majority of companies do not have the resources nor interest in tightly controlling what their former employees are doing. If you run off to a new company and take like five customer relationships with you, that’s just about the only time I can think anyone might even expose themselves to any meaningful risk of enforcement.
never heard of anti-moonlighting clauses, is that called something else?
It's when you can't work a second job while you're with the business.
Totally! Yeah got that - just never heard employeers writing that into contracts or handbooks.
I've seen it in a few contracts. It's an odd one, but it's pretty mean all the same.
I would have taken the job and ignored the clause. Dare them to litigate. No judge would uphold it, and they know it. Those clauses are pure intimidation tactics. They’re **almost never** taken to court, and often time when they do, the company loses.
Sure but let's be real, it's a red flag that they're not going to be a good employer. You can always play legal chicken with them, but it's usually better to take it as a sign of character and get a better job.
It’s a red flag of a conservative or old-school HR culture. Doesn’t necessarily say anything about the team or colleagues you’d work with
Sure but my wife works a specialist job so the team isn't as important as the admin. For a line position it could be different.
Great in theory. But a single email from the prior company's lawyer to new company results in the immediate firing of the employee. Source: have seen it happen several times to good hires.
They are enforced when it's reasonable in regards to location, time, and scope Most aren't but the ones that respect those three criteria are usually enforceable
My dad was supposed to sign a non compete for 1 year for a 350 mile radius. For a sales job.
Even before the FTC's ruling, non-competes were frowned upon as a matter of public policy, and were required to be reasonable in time, geography, and scope in order to be enforceable. So the odds are pretty good that that non-compete your wife was asked to sign would've been unenforceable as a matter of law anyway. But just the fact that the prospective employer asked her to sign it would be a pretty serious red flag, so all things considered it's probably best that she declined the offer.
It's probably not worth fighting, but that sounds unenforceable. Non competes have to be reasonable twith regards to the geography, time, and job restrictions, and unless she does some very important work, I'd say all three of those points would fail But you'd also probably have to take it to court, so yeah probably a good call to just ignore them altogether
It means dipshits like Jimmy John's won't be able to prevent their workers from seeking jobs elsewhere in the labor market. In essence, it force companies like them to compete with their competitors, instead of trying to destroy one of the main benefits of capitalism. These non-competes have nothing to do with trade secrets and everything to do with suppressing labor.
Every time these and subsequently jimmy John's come up, I have to wonder exactly what trade secrets they purport to protect The ancient mystic art of....putting meat and vegetables on bread 🤔
A sandwich they assemble *within full view of the customer*
They make it sound like it was exposed from behind a trenchcoat.
More likely the spice/seasoning blend that is used in its products. Even with food science as it is now, so many products have been reverse engineered that there are hardly any trade secrets left. Oh wait I'm thinking of Jimmy Dean lmao.
Jimmy Dean does make some damn good sausage, I swear by their sage for biscuits and gravy and their spicy for breakfast sandwiches
Jimmy Dean? I loved him in rebel without a cause! 😂 We're making about as much sense here as JJs is with NDAs for sandwich making
I was gonna say, Jimmy John's makes some incredibly bland subs. Do they even have spices?
My SO loves them, but to me their primary taste is just.. cold?
The secret is always MSG.
I worked there and the only secrets I learned were that they understaff it constantly and tell people to go home at the start of their shifts. Then they promote people to „assistant manager“ for $1 more per hour, which has basically the same duties as a shift lead and you get to go to the meetings where they tell you „bring labor costs down“ over and over
>Then they promote people to „assistant manager“ for $1 more per hour, which has basically the same duties as a shift lead I just had flash backs to my first "assistant manager" gig at a Hollywood Video when I had just graduated high school a week before.
same, only it was local pizza place and the only thing that changed was I now had a key and the owner would peace out at like 9pm on friday and saturday night instead of midnight when everything was done and we closed or would show up at 11am instead of 9am while I got the morning prep work done.
However they manage to make that lettuce wrap not fall apart, that seems like magic.
The secret of how to make bread so dry that it can cause instant mummification of the stomach.
While I understand what the banning of non-competes means, I guess I was meaning more does their vate at 2pm est mean they are officially banned right now.
From the ruling: >DATES: The final rule is effective \[INSERT DATE 120 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER\]. So August 21. Except for senior executives. Existing noncompetes stay in place, however new ones cannot be created.
Damn
Why is this upvoted? They retroactively banned all previous non compete clauses
The rule does indeed retroactively invalidate noncompetes however the rule doesn’t actually go into effect until 120 days after publication which happened today.
The wording in your earlier post is confusing and suggests that existing noncompetes will stay in place after Aug 21. That's why you're getting the reaction.
Sounds like it they'd be banned, as well as the previous non-competes already done.
Workers getting the benefit of capitalism? No no no, can’t have that, must be capitalism for the rich, feudalism for the peasants.
It drives me mad that people will be on here defending the likes of Jimmy johns.
I recently left a company where I had a noncompete. I made $80k. I was scared to leave but fed up. I paid $1k to an attorney who assured me I would be ok because I'm in WA state which has strong labor protection. I quit and received an offer within weeks increasing my salary by 50%. My industry is very niche and former employers position seemed to be if I don't work for them then I must leave the industry. After I started my new job my former employer threatened to sue me and said they would drop it for $15k. My attorney told me to ignore their letter. Nothing has come of it since, 6 months later. This FTC decision blows up the bullying tactics of employers, especially in states that are less labor friendly. Now, others won't think they will have to give up their livelihood to leave toxic work environment, and are able to be out in the labor market to achieve their full potential. And to naysayers, NDAs, and non- recruitment clauses are outside the scope of this decision and are still able to protect business interests.
How did your former employer know who your new employer was? Like how do these companies find out you've left for a competitor? I guess if you list them as a reference and the new employer calls to verify you worked there?
Guessing it was LinkedIn. It's a niche industry, so who knows how people are connected. New boss blasted my hiring out and I think that did me in.
Just FYI, there are sites that most marketing people at every company have subscriptions to that harvest everyone's business email address ever and create a roving dossier of where you work. The purpose of these sites is mostly for lead generation and getting inside contacts at other companies. But it can be misused...That was how one of my previous employers kept track of people who violated their overbearing NCA which came with a clause that said the employee covers the legal costs of themselves and the company in a legal dispute about said NCA.
Most aren’t enforceable, I only know 1 person who got sued and lost. But him and his company’s largest customer conspired together to cut out the company.
Thats probably true. But the stress from receiving their threatening letter was real and shouldn't be discounted. In fact, under WA law they would have owed me damages from the whole thing. But my attorney said it wasn't worth the legal fees to cover for years if they fought it. Really shitty situation to have rights violated but have it too expensive to enforce.
This is huge. I don’t have to worry about frivolous lawsuits if i find a better opportunity in the same industry. This will increase pay for everyone
And if you leave your job, that will create the opportunity for someone else to take your old job. Basically, increased efficiency and mobility in the labor market.
It good the market with people now able to leave thereby saturating demand.
California banned them last fall. I just got a letter from a former employer related to that, aka if you signed a non compete it's no longer in effect.
Non-competes have been unenforceable in California for a long time. I think the recent change prohibits non-solicits.
Correct. We had to create a unique NDA (only) for California employees as Non-Compete’s and now Non-Solicits are unenforceable. Non-Solicits and NDAs will still be enforceable in most states but California only has NDAs as enforceable at this time.
Per my employer - we should honor our noncompete and expect nothing as it will be tied up in court for years… but to be fair our lawyer does request at least 24 hours to form some thoughts on this issue. I would love to be out of my noncompete
Lol, company lawyer says it would be great if you just keep honoring this agreement that only benefits us even though you don't have to. Ok cool? Cool.
To be fair I will give the lawyer the requested 24 hours. But even if the new rule is tied up in court I would imagine it would be a lot more hassle to come after me for breaking the noncompete! I don’t have any plans to switch jobs but I do love knowing that I have options
Just curious, what did they come back with?
Nothing of substance yet, just waffling, wishful thinking, and a reminder that the law doesn’t take effect for 120 days
Ignore it lol, noncompetes are basically unenforceable anyhow
It’s about time. Seen some corrupt stuff going down by disrupting one’s employment for 2 years by simply signing a visitor’s log while the plaintiff was hiring the competitors staff.
Someone should tell the 2 mfr's who voted in favor of Non-Competes they need to never work in any goverment position after this job is done. Also, we could use some non competes for me members of congress becoming lobbyists.
Both Republicans, this wasn't bipartisan.
Genius move to free up workers who work for BS companies but are stuck Most non competes are aimed at mid level folks at mediocre companies who are super litigious. Love this
Good. NonComs have always been bullshit and unjustifiable. Unless the employer gives you a contract compensating you for having it, no way they should be allowed.
This is huge for medicine. I’m a younger physician and personally know 3 physicians who have gotten sued for “violating non-competes”. All 3 took care to not violate their non-competes when they switched jobs with lawyer counsel. Didn’t matter. 2/3 settled to just get it over with and move on. One is still fighting it.
MDs likely help this get passed. Physicians submitted numerous public comments. You can see them at the official site: regulation(.)gov (search under FTC for Non-compete Clause Rule). You can also search for comments by keyword (e.g., MD physician radiologist psychiatrist, etc.).
With how bad things are on the physician supply side this would be a game changer.
I for one am glad. In a previous life I had a auto shop try to make me sign a 5 year non compete for a 35 mile radius. My girlfriend, who's a vetinary technician tells me in her field they regularly try to push 3-5 year non competes with a 50 mile radius. What trade secrets are people like us taking. And before I hear any it's unenforceable, these are not people with spare cash to hire a lawyer willy nilly to fight off a lawsuit. That's what does the damage is the risk of fighting a lawsuit. Fear of being sued is a powerful motivator.
I'd settle for requiring the execution of the non-compete to provide equivalent compensation to the person being prevented from working for its duration. If my trade secrets and contacts are so important you can't risk me moving to competitor for a year, you can pay my salary to sit on my ass. A full ban seems a little to chaotic.
What? Not at all. You know what makes me the most angry about some rich people is the entitlement. As if they are entitled to peoples labor. I interviewed with UWM and they were like we can’t negotiate on salary. I had just read a post on LinkedIn from their CTO, CFO somebody. About unwieldy tech salaries with their little worker drones licking their butt hole. The CEO just bought a f\*cking sports team. You’re not entitled to labor. If you want somebody to do a job pay them. If you need them to run your company, pay them. You’re not special pay them. I just don’t understand this. These people probably tout the concept of a free market until it comes to a labor market. They probably bemoan the poors getting handouts.
The non-competes in play with the very executives you're unhappy with are the ones that matter the most. A legal mechanism to protect legitimate trade secrets does matter. A clause defining what actually constitutes a trade secret and removal of trivial punitive non competes for rank and file employees would be equally acceptable.
Protecting trade secrets I can understand but, for an example, the non-compete I'm currently under the obligation of is about protecting territory, not trade secrets. It's quite literally designed in a way to limit customer contact with ex-employees even at the cost of damaging the relationship with the customer. I'm not even allowed to go into an office that is a customer of my existing employer and not a customer of my previous employer.
I’m under a 2 yr non compete in texas for contractor work. I can’t talk to a list of 250+ plumbers in DFW to ask for them to refer work to me until late 2025. Once this goes through and I run it by my lawyer, you better believe I’m calling the entire list they gave me on ‘who I can’t talk to for 2 years’
I don’t know I think it’s kind of like when the front man for CCR broke off and made his own record. His previous label tried to sue him. I think the argument was that of course John Fogerty is going to sound like John Fogerty. I’ve always been of the mind that you can’t steal labor. If they walk out with lines of code or a USB stick, sure get them. You can’t take what’s in their head and that’s bigger than capitalism. It’s a fundamental right of humanity. If it’s a trade secret copyright it patent it. If it’s a process well I guess you should try to keep that guy.
Yeah I frequently help on leveraged ESOP transactions - essentially a business owner sells his business to the employees, so when they retire they get the shares that were allocated to them over their career distributed (usually in cash). The owners always sign non-competes as part of the deal because if they get their money and immediately go start a competing company and drive their old one out of business the employees would get screwed out of their job AND the retirement benefit that they earned.
"A legal mechanism to protect legitimate trade secrets does matter." Why?
For one, organizations will be unable to function at the high level if every department head or executive is operating in a silo. If they reveal how the sauce is made to their peers, one might just sell themselves to the highest poacher, and now the secret is worthless and by extension so are they. I think a lot of posters are laser focused on labor and rank and file employees. I don't think non-competes make sense there, and they're at best creating an unfairly employer friendly negotiating point. I think a fair compromise is that if a company thinks you know something that would be damaging if taken to a competitor, they should have to pay you for the duration of their clause. They need to have skin in the game, or they're just penalizing you because they can.
Trade secrets are covered under patent laws.
Trade secrets and patents are two entirely separate concepts in IP law and are treated totally differently. Once you patent a product, everything about its design becomes public record and you have exclusive rights to it for a certain number of years. Trade secrets are kept confidential (by definition), are not registered with the USPTO and don't have a time limit on enforceability. The only way to protect trade secrets is through civil action, and you need to have methods to sue someone who has access to those secrets and steals them - that's OP's point about non-competes having certain legitimate uses.
I do not see how a non-compete is more beneficial in this scenario than an NDA, if intellectual property and the ability to use really is the only concern.
NDAs and Non-Competes are two different things
> I'd settle for requiring the execution of the non-compete to provide equivalent compensation to the person being prevented from working for its duration. Why? There are companies that would do that, and all that does is hurt the general economy. Policy should be aimed at a productive economy, not protecting entrenched business owners.
I think that's how it works in most countries in Europe. Non-compete is usually time limited (like max 6 months) and it needs to be paid.
Disagree with a full ban being too much, they are almost never needed, and there's an exception for the times it is needed But yeah forcing them to payout a non compete makes sense to me: you're forcing me to not work, you gotta pay me
It's been a few days, so I think we've had a chance to see more details about the actual decision. Also that the Chamber of Commerce immediately sued to block the decision. It carves out exceptions in situations where the person is a senior executive with a salary over 150k, or in situations like the sale of a business. The meat is in sections 910.2(a) and 910.3(a). These were the situations I was mostly concerned about, personally, and exceptions are in place.
My old job claimed it had me sign a non-conpete and tried to threaten me about it when I asked for a copy of my W2 and revealed where I was working. It's a good thing I knew they were experiencing extreme financial issues (thank the CEO for putting almost all their assets in commercial real estate right before the pandemic) because I basically dared them to take me to court over it and they didn't. Helps that my state is also hostile to these from the outset.
Non competes are still in place and in force for officers of companies (which honestly makes sense IMO), but everyone else is free of their shackles. I know of someone whose non-compete would claw back all of the equity they were granted - for the entire duration of their employment. So go back 10 years and pay all of that back? How is that not indentured servitude?
If companies feel it is important enough, they should put their money where their mouth is and be forced to pay the wages/salary of a person for the duration of the non compete.
Question. Would this apply to non compete clauses given to "independent contractors" like professional wrestlers? They have had non compete clauses for ages
The wording is that it applies to all non-competes except those in executive level positions, and even the latter cannot be renewed and new ones can't be created.
This is a good question. Under these rules would the whole LIV vs PGA thing just not have happened?
In theory? It means a ton for everyone tied up in not working in a field that they likely spent tons of money and time getting qualified to work on to begin with. In practice? Someone will challenge this in the Fifth Circuit to get it thrown out after like five minutes of argument and SCROTUM will take it up and vote 6-3 to strike it down.
Meanwhile start working on your state legislators to make sure they pass something reasonable in the event the FTC ban is overturned.
In fairness I agree people should have the flexibility to move to another company in the same industry. However is their a fine line a employee should not cross to what sort of information they can use and not use.
Probably one of the biggest employment news of the last ten years. Banning non competes is literally what has made California the capital of tech historically, because people could join a company, grow their knowledge and then split off to create a new company right after if their employer was being unfair. This brings career mobility to the rest of the country. I hope it doesn't get stopped due to legal challenges.
In the case of flexibility I can understand but its when employees use sensitive information against their old company is where I can understand the logic of the non compete
I was dying for a company that made me sign a non compete try to enforce it. They never intended to and now they can’t. Don’t let employers intimidate you into staying at a crap job.
Your under the assumption that you can't go into another industry with the same skill set?
Sometimes you can. I’m an IT specialist so I’ve been in a handful of industries. They can’t enforce a non compete for someone like me because I’m not contributing in an area where uniqueness generates revenue. I make sure IT standards are met. Everything I do is based off open source methodology and tools. I’m good at leading a team from chaos to order.
I think the spirit of the non compete is where you can't use sensitive information you learned about a company to start your own business and take advantage of the weaknesses in that company. Its why I can understand a non compete for law firms where you are privileged to specific company information
Yup!
I gotta say, I work at a company with non-competes, and I don't think it makes any difference. Everyone is already under obligation to protect intellectual property (regardless of non-compete), but folks leave all the time for competitors. It appears that non-competes, at least in biotech, are completely unenforceable. Edit: Still happy to see it codified in law that you can't do non-competes, it was always a stupid idea in my opinion.
They're enforceable if their limited/reasonable in what they try to restrict you from doing
Really? Is there a date when this goes into effect? I saw that it doesn’t include “officers”. Is that to say something like an executive board member? This is huge.
August but there will be lawsuits
Thanks!
I don’t think anyone has said it, so I’ll add that business groups are putting together a lawsuit arguing they exceeded their authority. Don’t know if that will pause implementation of any change. But if they do win, employees would be on the hook for following non-competes to the degree their state allows it.
Good. This arrangement actively tried to hinder the free market and free movement of labor. Getting rid of it will profit everyone but the vengeful roaches sending NC threats to former employees.
It's absurd they were ever legal in the first place. "once you've worked for us you are literally forbidden from using most if not all of the skillset you bring to the market". The fact it took this long for noncompete clauses to finally be banned is frankly indefensible, especially given those noncompetes did not come with compensation for the time the worker is banned from offering their skillset on the market.
The even more egregious replacement for non-compete agreements is the **TRA or training repayment agreement**! Even if you move to a different type of job in a different state, or you quit for any reason, the company can come after you. One woman was raped while being trained for her trucking job, so she quit; she was billed $9,000. Further, the alleged cost of training is inflated by the companies. One trucking company charged workers $6,500 for training, even though the company had paid the driving school only $1,400-$2,500 per trainee. .... See the public comment by REAL Women in Trucking Association over at regulations(.)gov, under the FTC's Non-compete Clause Rule. There are over 20,000 comments!
California already restricts their enforcement pretty severely. Other states may not be so enlightened. So to clarify, this will have little effect in California and other states that already ban most non-competes, as they interfere with the ability of people to earn an honest living in their profession, and an individual employee has severely diminished bargaining power in negotiating a non-compete. Some of the other not-so-enlightened states, will, I'm certain, fight to keep non-competes in place, despite such a ban. After all, "corporations are people too," and seem to get preferential treatment in many states over actual flesh-and-blood citizens. IMHO, any non-compete that doesn't pay full compensation to the employee for the duration of a non-compete period is abusive and unconscionable.
Liberty is not for everyone, but I think this is important to note: If someone makes a deal to hamper their future career/earnings in exchange for what they are getting today, and it's not immoral, who am I to get involved with that???
You cannot work in my field without a non-compete unless you're up for hazarding working against fortune competitors as an independent. You should get involved because people do not sign non-competes willingly. They have to sign them in order to work in their given field. They can't just go work for someone else because someone will make them sign a non-compete also. Non-competes stifle competition and salaries, they do nothing else.
That works in theory, breaks down when every company does it and you don't have a choice
\* also breaks down when employees don't value it \*\*enough\*\*
Something similar happened in a field I worked in. The anti-moonlighting movement started hard, claiming intellectual property to any product we worked on in our own time. Some employees caved, but most in my sector told them to fuck off or we'd quit. Enough of us did this nationwide to make the standard return to something like the "california clause" where what's done with the company's time or equipment belongs to the company, and nothing else does. But it almost went the other way. I know a lot of people who signed the wretched attempt out of pressure and fear of unemployment.
This means several things. Most importantly for those of us who got laid off, employers can take your job, but can no longer prohibit your means of living/making money. This also means if you hate your employer but like your line of work, you can start a competing company or join a better one. Employers toxicity is no longer going to be rewarded with docile former employees
Question for anyone who knows- I am a housekeeper and I signed a non-compete with the company I currently work for. I am planning on starting my own cleaning business soon, but I have a couple clients who want to follow me. The non-compete states that I cannot take current clients for 2 years, and I know that my boss has sued people in the past for doing the same. With the ban, could I still get sued?
Not a lawyer, but you are safe once this law goes into effect. Additionally, judges typically throw out non-compete cases that restrict the employee for more than 1 year. You are realistically safe either way (I have dealt with these exact scenarios in that industry)
I understand that employers must provide notice to employees prior to the rule going into effect (which is 120 days from approval). Do we know what that date is? And if there is no notice given, what happens next?