A few years later, I moved to the company's offices in Washington State, where non-competes are allowed. Before the move I emailed HR and asked if I needed to sign the WA state employment agreement (with that non-compete clause) and they said "no". I saved that email.
Forward a decade, I resigned to work for a competitor.
That exit interview was fun. :-)
[I was working on completely different stuff at the new company. I do take NDAs and trade secrets seriously].
I’ve had both cases, with one company coming up with contract “additions” every now and then with super specific terms, including monetary amounts etc. The other companies usually had one single broad contract mentioning that any other provisions would be explicited in the company’s general HR policies. The HR policies get regularily revised, and employees didn’t need to sign every single change.
IMO it probably comes down to transparency. The company going the super granular route had many specific clauses negociated at an individual level, and stuff they wouldn’t want to have in a semi-public document any other employees could look at.
I don't think that HR really understood my question, but I sure wasn't going to clarify things for them!
Workers should be free to employed wherever or start a business that's not lifting IP.
These sort of regs needs to harmonized like UCC. California's model is mostly the right one.
http://web.archive.org/web/20230104170101/https://www.ftc.go...
> In its complaints, the FTC said the restrictions constituted an unfair method of competition under Section 5 of the FTC Act. In each case, the FTC has ordered the companies to cease enforcing, threatening to enforce, or imposing noncompete restrictions on relevant workers. They also are required to notify all affected employees that they are no longer bound by the noncompete restrictions.
I remember them saying Accuweather is close to the main campus of Penn State which has a large meteorology program. They were saying if you joined accuweather and quit you couldn't work in any weather related field for 5 years after leaving accuweather. Basically the NDA locked you in and you were a prisoner.
You don't want me ot work for a competitor for a year? Great. You get to pay me full pay and benefits for that year. Let's see how keen companies are to enforce a noncompete then.
Even then they should be limited in scope but without paid gardening leave they should be utterly unenforceable.
The problem even with paid noncompetes is that you are only getting your salary, not bonus and in the roles it is enforced, salary kind of caps out and bonus ends up being 25%.. 50%.. 75%+ of your income.
Some firms have started to enforce garden leaves long enough that you are guaranteed to miss at least one, if not two bonus cycles.
Additionally, your health care coverage is revoked at most of these companies during your gardening leave so you have to decide whether to go without, take COBRA, or hope you are on your spouses plan already.
Finally, the terms of the contract are generally asymmetric. Your employer has the right to waive the garden leave, but you do not. So you don't know if you are getting a few months paid time off until the day you resign. For legal reasons most companies won't make an offer deal with you and give you a deal like "if you can get out of your garden leave at old job and start here earlier, we'll let you take a month off paid by us before you start" as it is solicitation.
That said - 3 month garden leave over the summer is awesome.
Which is why they should be required to pay your TC+xx%, including any costs you may incur for things like health insurance, not just your salary.
How is this not an illusory contract?
When I gave advanced notice to Tudor Investment that I would be quitting they threatened to fire me with cause so that they could still enforce the non-compete without paying me in accordance with NY state law.
And they followed through with their threat, sending me a letter telling me I was being terminated with cause the day I officially quit.
To make their shitty shenanigans worse, they made the unpaid non-compete just short enough so that it wouldn't be worth it to sue. The NY Department of Labor also doesn't handle complaints if you're salaried above a certain threshold.
Don't ever work for Tudor Investment, they're two-faced assholes, but I shouldn't be telling you that when the government should.
I'd love to shame the company as you're doing, but we're legally bound by the settlement not to say anything about them but how great and wonderful they are as a company.
None of this is fool proof and requires savings, and I'm sorry if it seems like I'm victim blaming. As you point out, our legal system wont even reach discovery for $30,000, it's not a system of justice, it's a system of power, so do consider utilizing the power you have to keep quiet. "I'm quitting, I don't have another job lined up, but I might look around; oh yes, of course I'll follow the contract, but I'll seek my own counsel to advise me on how best to do so; goodbye". It's hard to imagine this could end up any worse than what you already experienced.
Source?
Labor Standards cannot accept every claim. Labor Standards will not accept claims if you:
- Worked as an executive, administrative, or professional employee and earned over $900 per week
Could you elaborate on that part?
That sort of non-compete that seems reasonable to me- very specific, time limited, and only for people with actual trade knowledge.
A good test is the number of openings a prohibition covers. The non-compete I signed covered maybe 30 openings nationwide in a good year, and zero in my local metro area.
One easy test for contract fairness I learned from my lawyer is, "Would it make sense if it were symmetric?" So, e.g., would your employer also agree not to go after clients that your next employer has? Or would they agree not to hire any engineers you consider competitive with yourself while you're there and for a year after you leave?
My guess is no.
Also- most of the reasonable cases for noncompetes are already covered by trade secret/NDA stuff
Posting this on the website and claiming that it constitutes "vigorous enforcement" shows just how ineffective these underfunded Government agencies typically are. They rarely choose to go after large companies, who can keep flouting regulations with impunity.
Smells like an Abacus Federal Savings Bank [1].
----------------------------------------
[1] https://en.wikipedia.org/wiki/Abacus_Federal_Savings_Bank
https://www.justice.gov/opa/pr/justice-department-requires-s...
Simple, small, limited conditions to stop certain behaviors.
As to why many industry/business non-competes are legal? There’s a good chance they may not be. But until taken to court we don’t really know.
I’d be curious to know why these companies were chosen. Were they especially bad? Or just the companies they had the best evidence against?
I would argue that's not fair at all. Think about what you're saying: you're saying that your Mexican restaurant should effectively not have to worry about your competition providing a better job to your staff than what you offer. That changes the dynamic so that you don't have to worry about doing your best to retain your staff.
This problem is the crux of why Silicon Valley is so successful (where you can't do this there) and tech hubs in other locations aren't anywhere close to as successful (where you can do this there).
I’m curious if the Supreme Court has taken up cases about non-competes and analyzed if they violate the constitution since they clearly block individual freedom to pursue a living.
Another example could be tacitly encouraging holding multiple jobs.
When the interests of employers conflict with the interests of overall economic productivity, government should lean towards the latter, instead of always taking the side of the employer. Let capitalism do what it does best.
> “In its complaints, the FTC said the restrictions constituted an unfair method of competition under Section 5 of the FTC Act. In each case, the FTC has ordered the companies to cease enforcing, threatening to enforce, or imposing noncompete restrictions on relevant workers. They also are required to notify all affected employees that they are no longer bound by the noncompete restrictions.”
Here is the full excerpt of section 5 as it currently stands in the United States Code as section 45 (15 U.S.C. § 45(a).) [Text in square brackets are my own]:
§45. Unfair methods of competition unlawful; prevention by Commission
(a) Declaration of unlawfulness; power to prohibit unfair practices; inapplicability to foreign trade
(1) Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful.
(2) The Commission is hereby empowered and directed to prevent persons, partnerships, or corporations, except […a dozen exceptions…], from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce.
(3) This subsection shall not apply to unfair methods of competition involving commerce with foreign nations (other than import commerce) unless— […insert paragraphs of exceptions…]. If this subsection applies to such methods of competition only because of the operation of subparagraph (A)(ii) [“on export commerce with foreign nations, of a person engaged in such commerce in the United States”], this subsection shall apply to such conduct only for injury to export business in the United States.
(4)(A) For purposes of subsection (a), the term "unfair or deceptive acts or practices" includes such acts or practices involving foreign commerce that—
(i) cause or are likely to cause reasonably foreseeable injury within the United States; or
(ii) involve material conduct occurring within the United States.
(B) All remedies available to the Commission with respect to unfair and deceptive acts or practices shall be available for acts and practices described in this paragraph, including restitution to domestic or foreign victims.
Why we are reading section (§) 45 of USC, not section 5: “Almost every provision of an act that is classified as a section of the Code is assigned a designation that differs from its act section number. For example, section 401 of the Social Security Act (act of August 14, 1935, chapter 531) is classified to section 601 of title 42. Most Code sections are based on an entire act section, but a few sections,[…], are based on less than an entire act section.” [3]
Citations:
[1] The Federal Trade Commission Act of 1914: https://www.govinfo.gov/content/pkg/COMPS-388/uslm/COMPS-388...
[2] Current United States Code (of law): (15 U.S.C. § 45(a).) https://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prel...
[3] A guide to reading US Law https://uscode.house.gov/detailed_guide.xhtml
If a company really cares that much about stopping competitors from taking advantage of your skillset, they need to be willing to pay up.
If you are skilled in being the chief of staff at google maps, it is likely your highest market value is in that particular niche.
Restricting your employment opportunities to those where you don’t have the highest market value through the use of non-competes is absolutely unethical and needs to be banned.
Chief of what? People use Bing Maps?
You are never allowed to steal trade secrets or use them elsewhere even if you didn’t sign any agreement about it.
An NDA isn’t even technically required. There are state and national laws which blanket ban using trade secrets outside of the company you worked for.
There are dozens of small optimizations in my tech that where painstakingly discovered through years of research and iterative improvement. These are not cost-effectively patentable.
Even if you believe the trade secrets 'work' do you think companies are going to document every design of optics, electronics, laser frequencies, rf powers? Then if we did then we'd get a series of posts about how onerous the regular confidential info acknowledgement forms are for the employee.
Not to mention, once it becomes 'commonly known' via disclosure, it may not even be protectable anymore.
Non-competes sidestep all these issues. Sure, if they are overly broad its bad, but they have an important role to play.
Edit: My (possibly incorrect) understanding is that rather than having a blanket “everything is our secret” kind of contracts like we have now, the act requires the company to specify what they have that they consider a secret, and to show that they take steps to protect those secrets above and beyond regular day-to-day information exchange within their company.
For example, a list of customers would have to be explicitly identified as “secret”, and handled more carefully.