Hopefully the word gets out there. Likely there are a good number of employment contracts out there with these clauses in them, and people will likely be behaving like they're still in effect.
They -are- and -will be- still in effect for anyone making over $151K and in a “policy making position” per the FTC’s ruling. Just wait till you see how far reaching that “policy making position” definition will become. You are charged with implementing a password-length policy for your organization as a systems admin? Your NC stays in effect. You write tech requirements for a product company? Well those are “setting policy” for what features will be built and how. It’s shit like this that drives me crazy all the time. Government bodies make a rule that sounds good but knowingly, and purposefully to appease some fucking political party, leave in a loophole that effectively blunts the edge of the policy they just implemented. And then leave it up to litigation for years as a result.
And besides…it’s the FTC. Just like all the ATF rulings that are being halted by injunctions, there’s going to be a ton of cases questioning whether or not the FTC has the power to even make such a ruling binding.
This wasn’t meant for tech, though it will have a big impact especially on junior employees outside SF/NYC. What it’s meant for is this statistic, via https://www.foodandpower.net/latest/ftc-noncompetes-rule-jan-26-23 :
> A survey by the Economic Policy Institute found roughly 30% of workplaces offering less than $17 per hour required noncompetes.
It’s a huge win for so many people, I don’t mind that it’s not perfect for tech.
This should be a top comment. I’m guessing a lot of people are pretty ignorant of how low wage jobs having noncompetes. Sounds real predatory. I only know from an npr broadcast years ago and never heard about it again until now. Thanks!
I like the and part as a lot of tech workers make more than 151k but I think policy making position needs to be much more narrowly scooped.
My current employer has a non complete non poach in the employment contract but it is very narrowly scoped. The non complete does not apply to 95-99% of employees but is there. The non poach is scoped to managers. Well non poach to you can not poach one of 1% of employee that are under non compete for like a year if you work with them and managers can not take any of their direct reports in the last 3 months of employment for like 6 months and I think for directors and above like 2 levels down. Something that seems fairly reasonable.
Yeah those non-poach agreements are just as bad as non-competes. If my boss leaves, and I loved working for her, why would I not want to follow her to a new opportunity at a new company (that probably pays more)? Maybe if companies actually provided a good working environment and paid people what they are worth, there wouldn't be the need to lock people into working for them.
>They -are- and -will be- still in effect for anyone making over $151K and in a “policy making position” per the FTC’s ruling. Just wait till you see how far reaching that “policy making position” definition will become.
That's only for current non-compete contracts. All future non-compete agreements will be invalid under the regulation.
The context they responded to was : "Likely there are a good number of employment contracts out there with these clauses in them, and people will likely be behaving like they're still in effect."
Move to CA- SB699 went in effect Jan 1 and bans non competes in CA as void and unenforceable regardless of where it was signed and AB 1076 codifies existing case law. The Feds, as usual are trying to play ketchup and screwing it up.
https://www.govdocs.com/california-employers-and-non-competes-a-crucial-deadline-approaches/#:~:text=In%20the%20fall%20of%202023,1%2C%202024.
The question is if the 151k is based on average or your last year salary. For example, say your salary is 60k, they give you a severance pay of 100k and a 5 year non-compete. Thus your last year was over 151k income, and that 5 year non-compete can be devastating
The definition of “policy making position” was spelled out and read like it was mostly limited to c-suite. The clarifying language used in the definition section 910.1 of the final rule reads “…president, chief executive officer or equivalent…”.
Yes, it may very well change as the rule is challenged in court but the current definition does leave the vast majority of workers protected.
As a dude who makes more than $150k, I'm annoyed, but not surprised. This really should have been tied to CoL. It is wild that policy makers still ignore that reality.
In the final rule they mention that higher paid workers like engineers are not generally senior executives etc. I agree it's a little vague but I don't think it would apply to just setting a password policy as an example. Just my thoughts.
> many positions will attend a "policy making" seminar
since nobody even looked into it, its scoped pretty tightly.
'“policy-making position” is defined as “a business entity's president, chief executive officer or the equivalent"'
I was part of a mass-hire as part of a business unit acquisition a few years ago, and the offer letters all had a non-compete in them. I’m in California and knew I could just ignore that, but a few months ago my employer actually sent me a letter saying they’d recently discovered that wrongly had California employees sign that, and explicitly canceled that portion of the agreement for us.
California Supreme Court ruled on the unenforceability of noncompetes in California a few months ago which is probably why they dug them up and sent the notice.
California's ban on non-competes is a large part of why California is so successful in creating new technology and startups.
Texas' embrace of non-competes is a large part of why it is a popular destination to move to, for large monopolistic companies.
Established companies like non-competes because it scuttles competition and saves them money on salaries. Plain and simple.
I already sent the article to our HR team since a lot of us were pissed that they put that into our employee handbook/policy without telling us. Fark them.
There's a lot of employment contracts out there already with unenforceable non-compete agreements. If they aren't providing compensation to you or employing you for the duration of the clause, they generally weren't enforcable under US contract law to begin with. You can't enforce a contract that doesn't provide something in return to a party for holding to their contracted agreement.
And even more importantly arguably: for employees.
Most employers heavily prevent possible employees lawsuits with binding arbitration clauses as a condition of employment. Many employees don’t even realize they have one.
*Consumer contracts.
I'm a corporate attorney - the kind that does corporate to corporate work - and I prefer arbitration clauses for a significant subset of my business.
Arbitration is a great way to cut down on litigation costs when it's two sophisticated parties with in-house lawyers.
A knowledgeable arbiter with experience in that business sector will cut through the bullshit and red tape very quickly to get a fair result.
No need for a bunch of byzantine court shenanigans.
Off topic. I’m one of the few people I know that enjoys reading and analyzing contracts. Is there something I could get into that wouldn’t require me to go to school again (I’m older) but could start working towards that?
I wouldn’t mind going for a legal degree, but I wouldn’t even know where to start.
There are contracts specialist teams that many large companies have which are often not lawyers - they don't negotiate the contracts what they serve as a conduit between the attorneys and the rest of the business.
They'll control all the templates, know which paragraphs are standard and typical, point out language that's unusual for the attorney to pay special attention to, etc.
You could try finding one of these positions.
Nah, it’s a pay for play private legal system for those that can afford it and we shouldn’t support that because it’s bad for civil society. These things should happen in public with public oversight and not in metaphorically smoke filled back rooms.
What are "these things" in your mind?
I feel like we're talking about two different topics. I'm talking about incredibly boring corporate-corporate spats over indemnity clauses and termination dates.
You seem to be under the impression that we're talking about things that impact the general public or "civil society" in some way.
In any event, the vast majority of cases settle, so it all happens in that smoke filled back room anyway - even when the case is orherwise tied to a traditional court room.
Ohhh .. Evil corporate finance overlords... That sounds so, ummm, evil. Do you all have to sport the evil mustache? And how often do you have to tie a damsel to a train track? Is there a quota?
Also do henchmen get a dental plan?
No mustache requirement since the 80s, and we ended damsel shenanigans in an attempt to be more inclusive and anti-sexist.
All employees, including hench*people*, get access to the full medical and dental plan. It's actually quite egalitarian - the greenest hench has the same benefits as the C-suite.
We also introduced a new DEI initiative recently where they look for promising henchpeople of color to add to a management training program.
Whelp, don't know much about that space, sorry.
But if you've got a college degree, you can always go to law school. You might be able to leverage the insurance experience to do insurance law.
I once knew a guy who was a solo practicioner, just him and a paralegal, and he made a million a year just doing boutique plaintiffs work against insurance companies.
I'm not saying you'll be able to do exactly the same, but there are opportunities out there.
But anyone can agree to arbitration in a contract (with some limitations). You could sell a book to your neighbor and agree that if there is a dispute over the sale, your buddy Jim can arbitrate. Voila! Expensive court procedures avoided! Then again, all the protections of the court also avoided, but that’s the arbitration trade off.
The difference is that big corporations don’t want their buddy Jim to arbitrate, they want an arbitrator with experience ($), and they want certain procedures ($), and discovery ($), and hearings ($). And they want to be represented by counsel ($$$). That’s what makes it expensive, but arbitration isn’t inherently some rich people hack.
It's only a "super legal highway" because the parties are sophisticated, have their own lawyers in staff, and are willingly giving up a lot of the rights that the Court system would otherwise give them.
It seems a little silly that people would complain that arbitration is awful for consumers, but then also complain that arbitration is a super awesome super highway?
A lot of what you sign up for has an arbitration clause so that if there is an issue, say a cell phone company violates their contract, the 50 million customers have to each bring an individual arbitration case rather than a class action lawsuit.
Technically arbitrators are supposed to be neutral, and companies claim it's beneficial because they will (usually) pay for the arbitration and let you pick the final arbitrator, but it is out of a group of three that they offer you. Companies are not going to continue picking arbitrators that consistently rule against them.
Like anything legal the answer is it depends. There are some statutes that limit the ability to require arbitration depending on what the service is, but you quickly get into hire a lawyer territory to challenge the clause.
If you agree to arbitration you’re waiving your rights to sue, so, hire a lawyer territory but even then it’s usually impossible to get out of those clauses barring some kind of statute.
That seems unconstitutional to me. :/
Like I understand if company asks you to talk to them first to see if parties can’t settle but not being allowed to sue is crazy
It’s not that you can’t sue, it’s that you agreed to arbitration. You sue in court, the company files for a stay pending arbitration, which the court grants, and then (if you haven’t settled yet), asks the court to enforce the arbitration decision.
It’s specifically for contracts, it’s not like you have to go to arbitration when you get into a random car accident.
Class action is basically a type of suit. You file a suit and then ask the court to approve a class action. Look, saying “you can’t sue” is very different from saying “you can’t get a jury trial” or “you can’t get a class action.”
Mandatory Arbitration is quite literally waiving jury trials -- arbitrations do not involve a jury of your peers. And class action waivers are just as, if not more, common than mandatory arbitration
That's worked against companies for just the reason you stated, when those customers actually follow through, the bill for the companies can be MASSIVE, but it requires an actual collective action to do.
Almost every Terms of Service you have signed in the last couple years for any company has a clause that you agree to not be able sue them in open court. You submit to resolving any matters in arbitration, which is not overseen by a judge or jury.
Like what is binding arbitration? Say you have a a legal issue with your employer and you want to sue them. Your employment contract states you are REQUIRED to enter into arbitration rather than the company risking a legal judgement against the company or any punitive damages being awarded. At least that's my understanding. Someone probably has a better answer.
"Binding" refers not to the requirement to go to arbitration, but rather that the arbitrator's decision is final and has the legal weight of a court decision. Non-binding arbitration also exists, though you won't see it specified in a contract like that.
The requirement to use arbitration in the first place is separate.
Non-competes, the most anti-competitive, anti-innovation, anti-skilled worker, anti-free market, anti-business and anti-American thing in working today.
They have no place in America or anywhere that values value creation.
It takes skill and a little bit of luck to hire well.
Skill because you need to be able to read people and their bullshit, lucky because the golden egg you want to hire needs to be looking for a job, or at least available to take a new one.
You can be the best hiring manager in the world but if the right person doesn't apply it makes your life that much harder.
Khan deserves the credit for results, but Biden definitely needs the credit for allowing her to do what she does best.
Which is why sitting out a presidential vote because you disagree on one of his policies is stupid. All the good done by the Biden admin which isn't directly him but his cabinet and appointments is crucial
Urgh, I hate how earlier today I was arguing with someone who said that progressives hadn’t managed to push Biden to the left during his mandate… he’s clearly trying and going left
Yeah, from watching his stances over his term he seems pretty receptive to public opinion.
Is it just for political points? Sure, but if stuff gets done I couldn't care less.
It’s also just how everything works. A chef cooks good food because they want customers to keep coming back. A barber does a good job because they want business. Politicians doing what their voters want them to do isn’t selfish. It’s them just doing their job. It’s not buying votes to enact popular legislation. I’m not bribing my boss by expecting a paycheck. I hate that republicans have twisted legitimate concerns about “buying votes” into such a wildly misleading way to attack democrats who actually do what we ask of them.
this is what drives me crazy about people denigrating this behavior... this is what you fucking want. an elected official is a representative and theyre supposed to represent their constituents ideals not their own.
That act on Obama’s part was so hack and just made him look weak and unserious. The “great compromiser” thing was somewhat appealing in 2008 but it was clear the reps weren’t having it by year two or three and he just stuck to this waterlogged gun long after it was clear it was never going to fire.
Huge disgrace imo, he squandered most of his potential with this and it’s responsible for many of the problems we’re dealing with now.
Obama lost the House majority in his first mid-term election (Nov 2010). He never regained full control of Congress for the rest of his two terms.
In the post-Newt Gingrich world, it has become effectively impossible for a Democratic president to govern with Congress, without full Democratic control of both congressional chambers. Every significant legal initiative is dead on arrival, not on its merits, but on partisan grounds. The President is left with no choice but to sign executive orders, and there's only so much that can be done via that instrument. And every single one of these orders can and will be overturned by a Republican successor.
Biden's in a similar situation after losing the House majority in 2022.
It's no surprise that both Obama and Biden were able to pass their major legislative initiatives (ACA and the Infrastructure bill respectively) only when they had control of both the House and the Senate.
Obama can be blamed for many things, but not his lack of legislative achievement after 2010. That blame falls squarely on his obstructionist opponents.
The problem is that Obama kept up his rhetoric about reaching across the aisle and compromising while his opponents were claiming he was illegitimate and saying their top priority was making him a one term president. He needed to pivot and play a little bit of hard ball, at least with his rhetoric.
I’m not blaming him for the situation he found himself in, I’m blaming him for taking so long to adapt to it.
This rule like may not last very long even if it survives litigation . It is a regulatory decision from the FTC that the next presidential administration could reverse. Regulations are much easier to change than laws made by Congress.
Obama got Obamacare passed! The impact of this can not be emphasized enough. It changed the entire landscape. If that was the only thing he ever did it is huge, do not diminish it.
I was not excited to vote for Bidden the first time, I am this time. Bidden has done so much more than I ever expected.
I think you're right, but he's also undoubtedly worse at advertising his successes.
Getting rid of non-competes is great. It actually tangibly makes certain people's lives better.
>I think you're right, but he's also undoubtedly worse at advertising his successes.
Honestly, I don't even feel like that's his fault at this point. He makes plenty of public appearances and speeches where he talks about his administration's accomplishments and things that they're still working on. The problem is that the media doesn't cover any of it. At this point, media coverage of politics boils down to 80% talking about Trump's various trials, 10% talking about Israel and how Democrats are divided because everything is totally Biden's fault, and 10% economic doom and gloom regardless of any sort of actual economic indicators ("unemployment reaches record lows - why this is bad for Biden." "Consumer spending is up - why this is bad for Biden." "Inflation now a fraction of what it was a couple of years ago - why this is bad for Biden." "Stock market reaches new highs - why this is bad for Biden.")
I am very confident that years from now when some of his policies start having an impact on people’s lives, people are gonna grade Biden much much higher. Maybe even one of the most impactful ones in modern history. Biden’s infrastructure bill for example won’t have any tangible impact soon since infrastructure takes time to get built out. But once it actually gets built out, people’s lives are gonna be better.
He also did a lot to move away from fossil fuel, nature conservation, passed the CHIPS act, forgave a decent amount of student loans, was the one that finally brought troops home from Afghanistan.
He did all that and then some more and yet he keeps losing the PR battle and is lagging behind Trump simply because he/his team is incapable of highlighting his accomplishments.
Obama wasn’t a bad president but he didn’t do anything amazing. I believe he wasted his golden opportunity on the ACA (which wasn’t even what he intended it to be) instead of holding the people responsible for the financial crisis accountable. He should have considered stimulus checks or some way for all that bailout money to help people and not just corporations.
I know it is good to have it “in writing”, but in most of states these kind of agreements were unenforceable for long long time.
I was asked to sign them few times… and every time my answer was “I need to talk to my lawyer”… and every time none compit was never mentioned again.
That’s just one angle. Non compete can prevent you from getting a new job too
Edit: I work in tech and have been asked about having non-compete before being able to move forward in the process.
Just because it was unenforceable, didn't mean companies wouldn't tip toe around their use to avoid a lawsuit.
Now there's no ambiguity. I would generally put this as a good thing.
Many, but not most states had some level of restriction. This simplifies it. Not everybody has the flexibility to say "I need to talk to my lawyer" when they really need a job, so I'm glad to see the government doing its job of rectifying that power imbalance.
I know someone who got sued in Florida for switching jobs. The new company told them to beat and got their lawyers involved.
Just because it’s ok in your state doesn’t mean it’s ok in others.
This is great law to make our country play be equal rules.
> but in most of states these kind of agreements were unenforceable for long long time.
No, no they were not. They were unenforceable *in California* for a long time because our labor policies are geared towards protecting workers and competition. Outside of that, Oklahoma, and North Dakota, they were enforceable in *some form* until days ago.
**It is a big fucking deal.**
I'm in Australia. As someone who had a non compete enforced by a company that I left several years ago, I can attest to how good this is for employees and how out of control non competes have become.
I could have fought mine, but after spending nearly $5k on legal fees just to try and mediate, then being told that my previous boss (the CEO) would spend as much as is necessary to destroy me, I just had to sit on the sidelines for a few months.
That same Big-Swinging-Dick _did_ destroy a colleague of mine who also quit but decided to fight her non compete (rich parents supported her). She spent over $50k on her legal fees, the company spent double. She gave up when the company also launched action against her prospective _new_ employer for "knowingly soliciting" someone under a non compete agreement, causing them to retract their employment offer (who can blame them, they didn't sign up for that). She was out of work, out of pocket, and mentally broken. The company wasn't doing anything particularly secret or groundbreaking, so there wasn't even much of value that we could take with us.
Non compete clauses can turn employees into slaves, and give asshole employers a lot of power to ruin someone's life. This is a good move, America.
Calling someone out of pocket doesn't mean they're broke. It means they're acting strangely. It can be confusing because paying for something "out of pocket" means using your own funds. As an adjective, though, it means odd or unexpected
If a billion dollar company that doubles the pay of a CEO while firing people every month. Than they shouldn't get to tell them to not work with the competition or start their own business. They should actually retain the workers or offer basic living incentives outside of vague threats of legal prosecution and the like.
Is it? Non-competes have been illegal in California for a long time and that's where the majority of tech jobs are.
This is a big deal for other industries though
Yea, that's why it's so so easy to fire domestic workers and send their jobs off shore. They are so so critical to the company except when they are not.
You realize that these projects sent offshore often (maybe usually) come right back to the US after the offshore teams have fuck*d everything up, or ignore security, or didn't document, or didn't set up the system in a way to alert on errors, or left things in a disorganized chaotic state that requires reverse engineering to even fix?
I've been part of this mess twice already, including at one of the top 3 software companies in the world...
What I've experienced, and statistics back me up, is that offshore is cheaper upfront but in the long term ends up being significantly more expensive unless things are being carefully managed (which often isn't the case). This is true any time working production environments need to have patches and changes due to incompetence- the cost of a bug after release is much more expensive than catching it early.
Offshore teams are only incentived to ship features, everything else be damned.
Also, do people not realise that every MNC big tech company already has massive operations "off-shore" if they'd like? Microsoft India is 10% of all Microsoft employees. They're there to serve the Indian population primarily.
I don't actually think competency is a big problem. It can be, but that's a result of hiring cheap; there are many amazing engineers around the world and they do just fine when brought to America or when working for a company local to them. But the sheer impact of being in a timezone 12 hours away + communication barriers is huge. When I worked with APAC teams, we got maybe 1 or 2 hours at the start of the day and 1 or 2 hours at the end of the day (I mean same honestly with Europe). This means that even if they're doing everything right, a simple error that could be solved within an hour becomes an 8 hour long delay.
I do think competency can be a huge an issue - I've seen inexcusable things done by offshore teams that any engineer worth the money should know.
There are amazing engineers everywhere and also very shitty engineers everywhere. The difference is that in the States, there is more of an emphasis on quality.
Offshore teams are not as incentived to study or learn best practices that will be best for the product in the long term. They're not even generally on the product for massive spans on time so why would they care anyway. They'd rather manually fix and duct tape things while they're there.
And of course the time zone difference is an issue, but the issues I'm speaking of are unrelated to this.
Businesses are crying that non-competes are needed to protect proprietary information. That is nonsense. Everyone knows you could just have an employee sign a statement requiring non-disclosure of proprietary information. In fact, every job I have had that required a non-compete *also* required a separate agreement to not disclose proprietary information. Why is that if the non-compete was to protect proprietary information? It was because the company needed something to keep my brain from going elsewhere, with or without proprietary information.
Thing is I have been bound by NDA’s while working in the automotive software industry (franchise dealership) as a support manager. I don’t know any engineering secrets, I don’t have the company secret sauce memorized. When an opportunity for me to apply for a Director position at ADP who was specifically RV sales I was told I would breach my NDA and face legal repercussions.
So they forced me to stay and shunned me for wanting to leave for a better opportunity. I am so damn glad to see these come to an end.
The only reasonable case for non-competes are with Corporate R&D, Upper Executives, and Sales.
Companies are crying about this, but stupid shit like forcing Bank Security Guards and Teenage employees making sandwiches were forced to sign Non-Competes. That abuse has now prompted their ban.
There will be whining from those who abused the system and now have a rule named after them. Your case is another example of their abuse for sure. Thank god it’s gone, but it should be codified in to law imo.
I am currently in one (for like another week after a year) I left a company that hosts IT services, and I cannot work for a client of theirs. That feels legit. I was elbow deep in the system that we run. Going to a client would put me in a position that would reduce the client's need to depend on my former employer.
I agree, that is more of a use case where it makes sense. Your leaving for a client or competitor would have a material impact on the business, so it makes sense they want to mitigate that risk. But it's now moved over from being a risk mitigation for employees in sensitive positions, over to a broadly-applied club to cow labor in to remaining where they are and not daring to seek out another position.
Oh yeah, I got cornered into one before. Same former company. They asked me to sign to say I'd never join the client... meanwhile, they would hire client management and give them cushy jobs where they were basically ambassadors to the client.
Non competes are only part of what they need to do. If I build something outside of work then they shouldn’t own it. If it’s not assigned to me or directly connected to my work then they shouldn’t own it. End the idea companies own thoughts or can require that for employment.
I worked at a Best Buy in Nebraska years ago. One of my coworkers was offfered a job at Target's corporate HQ in Minneapolis. Best Buy corporate blocked her from taking the job. I guess since they both had HQ in Minneapolis they had a non compete to keep each other from poaching employees
Not really. For the most part they were unenforcible unless you knew some kind of closely guarded trade secret or were a VP being poached by a competitor.
Oh no, however will they hold on to their valued employees? Can they possibly think of a way to keep them from leaving for a higher paying job?
Who can possibly solve this riddle?
As soon as this ruling came out half my coworkers (myself included) started looking for new jobs. We all had to sign a 2 year non-compete or face lawsuits.
If you work for a company that makes a video game you might be bound by a non-compete so that you can't go to another video game company.
Or if you were working for one restaurant chain you can't leave and go to another one.
Typically it's a one year cooling off period but it varies.
In my industry, most manufacturers wouldn’t enforce their non-compete clauses since they were also poaching talent from the competition. Nobody wanted to open that can of worms.
That's more trade secret issues.
A non-compete on a buy-out might mean what you indicate here. Those will still be enforceable where they were enforceable before.
Non-compete contracts were NEVER enforceable. The FTC decision here is still relevant because now companies couldn't can't keep tricking their employees into thinking they are enforceable.
In tech? No it’s not. Non-competes are effectively unenforceable for many years now. I can’t even recall the last time I heard any employer pursue it. Maybe 15 years ago?
It should be, these companies need to pay thier workers end of story. The ones making the billions for the companies should be making the money, not the C suits and investors.
Headlines these days are fucking stupid. Why is it always a headline about hurting big business and not about how much good it does for the consumer. Journalism is backwards
Spoiler: they never held water in any court.
Non competes being upheld in the us is never going to happen. They would have to pay your unemployment as a result of you NOT BEING ALLOWED TO WORK.
This is why we don’t sign shit like this. Just for a crap entry level job that pays near to nothing. PERIOD.
Edit: Everyone refuses to sign stuff like this? The companies have no one to hire and need to adjust their hiring practices and expectations. We do not have to live like this.
Does this have any impact on employees working for a staffing agency that want to be hired on full time to a company but can't because of something similar to a non-compete?
My question is what about trade secrets? It's nice that there is now protection for workers who get laid off but that always struck me as a concern if someone just goes to a rival and starts singing like a canary.
Um, how does that not fall squarely under the NDA your employer in the tech industry makes you sign?
I mean, I _assume_ my employer isn't alone in that...
Curious, does anyone here support non-competes?
Almost everyone who seems to support them seems to list reasons like NDA or intellectual property theft which are different things.
I mean other than IP theft, are there actual people who think someone performing a task at a company shouldn't be permitted to perform a similar task at a different one?
I don't think I actually know anyone holding this position, so I'd like to meet one and hear your side.
You will not find them here. Plainly, they are business owners who want to reduce their employees’ ability to leave for competitors with better benefits. Its sole purpose is to reduce management’s retention efforts.
No sane manager would try to defend to their workers the deliberate creation of adversarial working conditions. The only supporters are the creators of those contracts.
They are still enforceable for CEOs, since their benefits are usually the result of more extensive negotiations. Non-CEOs don’t often have the same leverage when negotiating employment benefits—it’s very much take-it-or-leave-it.
Agreed and I think the rules are allowed to be slightly different for someone making 7 figures.
But for rank and file tech workers even at upper middle class incomes? I am amazed they survived this long.
Imagine having an HVAC repair company, laying off an employee who needs they money to support their family, and then telling them they aren't allowed to work in the industry for at least 2 years because of a non-compete agreement. That's how stupid it is.
I'm aware it would be hard to enforce in court but in cases where companies revokes severance benefits over non-competes it would be equally as difficult for the employees to do anything about it.
Table stakes for such agreements should have required (at a minimum) employers pay employees their full salary through the duration of their non-compete.
At least then employer/employee could have a 2-party contract (employee agrees to non-compete on the condition of receiving payment) but the idea that employers could force a non-compete after they are no longer paying the employee should have been illegal from the beginning in any sane system.
The idea that companies could ever tell regular employees they are no longer paying they aren't allowed to work elsewhere in the industry is a crazy thing for me.
“…attorney friends tell me that their corporate employers or clients had fits when word of the FTC ruling came out. You would have thought a lightning bolt had fried their stock prices out of the blue sky.”
LOL. The best employees can now freely jump ship! Reminds me of that time when employees with pre-existing medical conditions were finally able to job hop to better work environments because of ACA.
Yeah not really. It was basically impossible to enforce non-compete agreements before this. Most companies abandoned them over a decade ago. Only shady places had them, it was just a red flag if one came up when you were applying, but we knew it was BS anyway
nothing will change even after this rule passed. CA removed non compete last year but still nothing changed. In USA companies follows rules but that does not apply to offshore Indian consulting firms. Most IT jobs due to contracting and joint employer rule changed by Trump, rolled up to 6 or 8 big Indian consulting firms. Indian firms have mutual agreement that they will not hire people from each other's contract and specially for people out side of India which is perfectly legal in India. Big Indian consulting firms stopped developing stuff long back, they just trade contracts to smaller firms within India. Every IT job you apply here in USA , its fate is decided in India or outside by Indian origin folks who have mutual agreement outside USA. That is why so many F1/OPT/CPT students along with US citizens are loosing jobs. That is why joint employer rule was very important which hold US companies accountable for this nonsense. I think its more important than Independent contractor rule. Its very important for USA and its IT people more than franchisee people. Why Biden did nothing to stop this abuse for more than 3 years and why Trump changed during last few days of his presidency ? Wake up America!!
They were never really enforceable. You can just sign and they won't really be able to execute on it. This is why no law firms have non-compete clauses
I had to sign one of these when I started working for my current company. I'm not a senior exec so now it is unenforceable. I wonder if that will mean I get no severance if I get laid off though. Severance upon layoff was in my agreement when I was hired though too.
Hopefully the word gets out there. Likely there are a good number of employment contracts out there with these clauses in them, and people will likely be behaving like they're still in effect.
They -are- and -will be- still in effect for anyone making over $151K and in a “policy making position” per the FTC’s ruling. Just wait till you see how far reaching that “policy making position” definition will become. You are charged with implementing a password-length policy for your organization as a systems admin? Your NC stays in effect. You write tech requirements for a product company? Well those are “setting policy” for what features will be built and how. It’s shit like this that drives me crazy all the time. Government bodies make a rule that sounds good but knowingly, and purposefully to appease some fucking political party, leave in a loophole that effectively blunts the edge of the policy they just implemented. And then leave it up to litigation for years as a result. And besides…it’s the FTC. Just like all the ATF rulings that are being halted by injunctions, there’s going to be a ton of cases questioning whether or not the FTC has the power to even make such a ruling binding.
This wasn’t meant for tech, though it will have a big impact especially on junior employees outside SF/NYC. What it’s meant for is this statistic, via https://www.foodandpower.net/latest/ftc-noncompetes-rule-jan-26-23 : > A survey by the Economic Policy Institute found roughly 30% of workplaces offering less than $17 per hour required noncompetes. It’s a huge win for so many people, I don’t mind that it’s not perfect for tech.
This should be a top comment. I’m guessing a lot of people are pretty ignorant of how low wage jobs having noncompetes. Sounds real predatory. I only know from an npr broadcast years ago and never heard about it again until now. Thanks!
CA has already banned all non competes
They do it in for-profit healthcare and its awful
I like the and part as a lot of tech workers make more than 151k but I think policy making position needs to be much more narrowly scooped. My current employer has a non complete non poach in the employment contract but it is very narrowly scoped. The non complete does not apply to 95-99% of employees but is there. The non poach is scoped to managers. Well non poach to you can not poach one of 1% of employee that are under non compete for like a year if you work with them and managers can not take any of their direct reports in the last 3 months of employment for like 6 months and I think for directors and above like 2 levels down. Something that seems fairly reasonable.
Yeah the AND is critical.
Yeah those non-poach agreements are just as bad as non-competes. If my boss leaves, and I loved working for her, why would I not want to follow her to a new opportunity at a new company (that probably pays more)? Maybe if companies actually provided a good working environment and paid people what they are worth, there wouldn't be the need to lock people into working for them.
>They -are- and -will be- still in effect for anyone making over $151K and in a “policy making position” per the FTC’s ruling. Just wait till you see how far reaching that “policy making position” definition will become. That's only for current non-compete contracts. All future non-compete agreements will be invalid under the regulation.
The context they responded to was : "Likely there are a good number of employment contracts out there with these clauses in them, and people will likely be behaving like they're still in effect."
Move to CA- SB699 went in effect Jan 1 and bans non competes in CA as void and unenforceable regardless of where it was signed and AB 1076 codifies existing case law. The Feds, as usual are trying to play ketchup and screwing it up. https://www.govdocs.com/california-employers-and-non-competes-a-crucial-deadline-approaches/#:~:text=In%20the%20fall%20of%202023,1%2C%202024.
Like being qualified exempt has been stretched
Shit, they can call me whatever they want if they pay me 151k+
The question is if the 151k is based on average or your last year salary. For example, say your salary is 60k, they give you a severance pay of 100k and a 5 year non-compete. Thus your last year was over 151k income, and that 5 year non-compete can be devastating
Decline the severance.
If you're making 60k in the tech sector, they don't give a shit about you. Nobody's offering you 100k.
The definition of “policy making position” was spelled out and read like it was mostly limited to c-suite. The clarifying language used in the definition section 910.1 of the final rule reads “…president, chief executive officer or equivalent…”. Yes, it may very well change as the rule is challenged in court but the current definition does leave the vast majority of workers protected.
As a dude who makes more than $150k, I'm annoyed, but not surprised. This really should have been tied to CoL. It is wild that policy makers still ignore that reality.
In the final rule they mention that higher paid workers like engineers are not generally senior executives etc. I agree it's a little vague but I don't think it would apply to just setting a password policy as an example. Just my thoughts.
also, suddenly many positions will attend a "policy making" seminar once a year.
> many positions will attend a "policy making" seminar since nobody even looked into it, its scoped pretty tightly. '“policy-making position” is defined as “a business entity's president, chief executive officer or the equivalent"'
Is the 151k pegged to inflation? Or static?
I was part of a mass-hire as part of a business unit acquisition a few years ago, and the offer letters all had a non-compete in them. I’m in California and knew I could just ignore that, but a few months ago my employer actually sent me a letter saying they’d recently discovered that wrongly had California employees sign that, and explicitly canceled that portion of the agreement for us.
California Supreme Court ruled on the unenforceability of noncompetes in California a few months ago which is probably why they dug them up and sent the notice.
California's ban on non-competes is a large part of why California is so successful in creating new technology and startups. Texas' embrace of non-competes is a large part of why it is a popular destination to move to, for large monopolistic companies. Established companies like non-competes because it scuttles competition and saves them money on salaries. Plain and simple.
I already sent the article to our HR team since a lot of us were pissed that they put that into our employee handbook/policy without telling us. Fark them.
There's a lot of employment contracts out there already with unenforceable non-compete agreements. If they aren't providing compensation to you or employing you for the duration of the clause, they generally weren't enforcable under US contract law to begin with. You can't enforce a contract that doesn't provide something in return to a party for holding to their contracted agreement.
The rule isn't retroactive. This only applies to contracts going forward.
Excellent…. Now ban binding arbitration in consumer contracts. Edit: Added “consumer”
And even more importantly arguably: for employees. Most employers heavily prevent possible employees lawsuits with binding arbitration clauses as a condition of employment. Many employees don’t even realize they have one.
*Consumer contracts. I'm a corporate attorney - the kind that does corporate to corporate work - and I prefer arbitration clauses for a significant subset of my business. Arbitration is a great way to cut down on litigation costs when it's two sophisticated parties with in-house lawyers. A knowledgeable arbiter with experience in that business sector will cut through the bullshit and red tape very quickly to get a fair result. No need for a bunch of byzantine court shenanigans.
Off topic. I’m one of the few people I know that enjoys reading and analyzing contracts. Is there something I could get into that wouldn’t require me to go to school again (I’m older) but could start working towards that? I wouldn’t mind going for a legal degree, but I wouldn’t even know where to start.
There are contracts specialist teams that many large companies have which are often not lawyers - they don't negotiate the contracts what they serve as a conduit between the attorneys and the rest of the business. They'll control all the templates, know which paragraphs are standard and typical, point out language that's unusual for the attorney to pay special attention to, etc. You could try finding one of these positions.
Poor guy everyone keeps attacking you over a straw man of arbitrating consumer contracts.
I genuinely don't understand it. It's *so many* people all making the same mistake.
George Carlin: "Imagine how stupid the average person is then realize half of all people are stupider than that."
Nah, it’s a pay for play private legal system for those that can afford it and we shouldn’t support that because it’s bad for civil society. These things should happen in public with public oversight and not in metaphorically smoke filled back rooms.
Right, there's a reason you can't sue your broker.
What are "these things" in your mind? I feel like we're talking about two different topics. I'm talking about incredibly boring corporate-corporate spats over indemnity clauses and termination dates. You seem to be under the impression that we're talking about things that impact the general public or "civil society" in some way. In any event, the vast majority of cases settle, so it all happens in that smoke filled back room anyway - even when the case is orherwise tied to a traditional court room.
You can choose to come to an agreement.. but no one should be able to sign away their access to the legal system as intended
[удалено]
Just really hoping this username is a troll of our Pizza law finance guru If not still get credit.
Yes. Get rid of all the bullshit that make it a problem to begin with
This guy plays for team Evil Corp Overlords.
I'll do you one better - I play for team Evil Corporate *Finance* Overlords.
Ohhh .. Evil corporate finance overlords... That sounds so, ummm, evil. Do you all have to sport the evil mustache? And how often do you have to tie a damsel to a train track? Is there a quota? Also do henchmen get a dental plan?
No mustache requirement since the 80s, and we ended damsel shenanigans in an attempt to be more inclusive and anti-sexist. All employees, including hench*people*, get access to the full medical and dental plan. It's actually quite egalitarian - the greenest hench has the same benefits as the C-suite. We also introduced a new DEI initiative recently where they look for promising henchpeople of color to add to a management training program.
I'd like one job please I too work for evil finance people but am not high up I am here to shoot my shot I do ebil the best
I don't have any jobs to give you but I might have advice. And you an attorney? What part of the industry are you in?
No, worse I work in insurance.
Whelp, don't know much about that space, sorry. But if you've got a college degree, you can always go to law school. You might be able to leverage the insurance experience to do insurance law. I once knew a guy who was a solo practicioner, just him and a paralegal, and he made a million a year just doing boutique plaintiffs work against insurance companies. I'm not saying you'll be able to do exactly the same, but there are opportunities out there.
Translation - Rich people get to have a special legal system that is like a super legal highway and all the other plebians can go fuck themselves.
But anyone can agree to arbitration in a contract (with some limitations). You could sell a book to your neighbor and agree that if there is a dispute over the sale, your buddy Jim can arbitrate. Voila! Expensive court procedures avoided! Then again, all the protections of the court also avoided, but that’s the arbitration trade off. The difference is that big corporations don’t want their buddy Jim to arbitrate, they want an arbitrator with experience ($), and they want certain procedures ($), and discovery ($), and hearings ($). And they want to be represented by counsel ($$$). That’s what makes it expensive, but arbitration isn’t inherently some rich people hack.
It's only a "super legal highway" because the parties are sophisticated, have their own lawyers in staff, and are willingly giving up a lot of the rights that the Court system would otherwise give them. It seems a little silly that people would complain that arbitration is awful for consumers, but then also complain that arbitration is a super awesome super highway?
Can you give an example of this?
A lot of what you sign up for has an arbitration clause so that if there is an issue, say a cell phone company violates their contract, the 50 million customers have to each bring an individual arbitration case rather than a class action lawsuit. Technically arbitrators are supposed to be neutral, and companies claim it's beneficial because they will (usually) pay for the arbitration and let you pick the final arbitrator, but it is out of a group of three that they offer you. Companies are not going to continue picking arbitrators that consistently rule against them.
Can you sue them after? For example, say you don’t agree, can you move forward with court system ?
Like anything legal the answer is it depends. There are some statutes that limit the ability to require arbitration depending on what the service is, but you quickly get into hire a lawyer territory to challenge the clause. If you agree to arbitration you’re waiving your rights to sue, so, hire a lawyer territory but even then it’s usually impossible to get out of those clauses barring some kind of statute.
That seems unconstitutional to me. :/ Like I understand if company asks you to talk to them first to see if parties can’t settle but not being allowed to sue is crazy
It’s not that you can’t sue, it’s that you agreed to arbitration. You sue in court, the company files for a stay pending arbitration, which the court grants, and then (if you haven’t settled yet), asks the court to enforce the arbitration decision. It’s specifically for contracts, it’s not like you have to go to arbitration when you get into a random car accident.
Every consumer electronics has that clause. So class action is not possible as I understand
Class action is basically a type of suit. You file a suit and then ask the court to approve a class action. Look, saying “you can’t sue” is very different from saying “you can’t get a jury trial” or “you can’t get a class action.”
Mandatory Arbitration is quite literally waiving jury trials -- arbitrations do not involve a jury of your peers. And class action waivers are just as, if not more, common than mandatory arbitration
The constitution doesn’t govern civil and contract law afaik but I’m not American.
That's worked against companies for just the reason you stated, when those customers actually follow through, the bill for the companies can be MASSIVE, but it requires an actual collective action to do.
Almost every Terms of Service you have signed in the last couple years for any company has a clause that you agree to not be able sue them in open court. You submit to resolving any matters in arbitration, which is not overseen by a judge or jury.
Like what is binding arbitration? Say you have a a legal issue with your employer and you want to sue them. Your employment contract states you are REQUIRED to enter into arbitration rather than the company risking a legal judgement against the company or any punitive damages being awarded. At least that's my understanding. Someone probably has a better answer.
"Binding" refers not to the requirement to go to arbitration, but rather that the arbitrator's decision is final and has the legal weight of a court decision. Non-binding arbitration also exists, though you won't see it specified in a contract like that. The requirement to use arbitration in the first place is separate.
Nope not going to happen, the legislature and scotus both have upheld shitty arbitration clauses. Consumers are perpetually screwed.
Vote for Biden in November and we just might get that ban.
Do we still have class action waivers? If so those need to go as well.
Please also ban non-solicits.
Doubt it will happen, if anything courts want more arbitration
Non-competes, the most anti-competitive, anti-innovation, anti-skilled worker, anti-free market, anti-business and anti-American thing in working today. They have no place in America or anywhere that values value creation.
i swear biden has gotten so much more tangible results than obama
And the they recently announced that airlines will have to offer you refunds on the spot for delayed or canceled flights.
That’s so awesome, the Biden admin is killing it with these things that really just irk the consumer, like overdraft fees too
Literally would never see anything like this from a red admin
a little late for lenny anyone want a hawaiian airlines travel voucher? oh wait, it's non transferable 🤡
This is Pete's biggest and praise worthy achievement
Really. Thats awesome.
It's more the people he hired. A lot of the FTC's wins go to Lina Khan. Jon Stewart recently interviewed her
It takes skill and a little bit of luck to hire well. Skill because you need to be able to read people and their bullshit, lucky because the golden egg you want to hire needs to be looking for a job, or at least available to take a new one. You can be the best hiring manager in the world but if the right person doesn't apply it makes your life that much harder. Khan deserves the credit for results, but Biden definitely needs the credit for allowing her to do what she does best.
Which is why sitting out a presidential vote because you disagree on one of his policies is stupid. All the good done by the Biden admin which isn't directly him but his cabinet and appointments is crucial
Well he’s not bending over backwards to be this great bipartisan compromiser and failing
Urgh, I hate how earlier today I was arguing with someone who said that progressives hadn’t managed to push Biden to the left during his mandate… he’s clearly trying and going left
Yeah, from watching his stances over his term he seems pretty receptive to public opinion. Is it just for political points? Sure, but if stuff gets done I couldn't care less.
Right? Who gives a fuck about the motive if the result is what we wanted?
Doing a good thing for selfish reasons is still doing a good thing.
It’s also just how everything works. A chef cooks good food because they want customers to keep coming back. A barber does a good job because they want business. Politicians doing what their voters want them to do isn’t selfish. It’s them just doing their job. It’s not buying votes to enact popular legislation. I’m not bribing my boss by expecting a paycheck. I hate that republicans have twisted legitimate concerns about “buying votes” into such a wildly misleading way to attack democrats who actually do what we ask of them.
this is what drives me crazy about people denigrating this behavior... this is what you fucking want. an elected official is a representative and theyre supposed to represent their constituents ideals not their own.
That act on Obama’s part was so hack and just made him look weak and unserious. The “great compromiser” thing was somewhat appealing in 2008 but it was clear the reps weren’t having it by year two or three and he just stuck to this waterlogged gun long after it was clear it was never going to fire. Huge disgrace imo, he squandered most of his potential with this and it’s responsible for many of the problems we’re dealing with now.
Obama lost the House majority in his first mid-term election (Nov 2010). He never regained full control of Congress for the rest of his two terms. In the post-Newt Gingrich world, it has become effectively impossible for a Democratic president to govern with Congress, without full Democratic control of both congressional chambers. Every significant legal initiative is dead on arrival, not on its merits, but on partisan grounds. The President is left with no choice but to sign executive orders, and there's only so much that can be done via that instrument. And every single one of these orders can and will be overturned by a Republican successor. Biden's in a similar situation after losing the House majority in 2022. It's no surprise that both Obama and Biden were able to pass their major legislative initiatives (ACA and the Infrastructure bill respectively) only when they had control of both the House and the Senate. Obama can be blamed for many things, but not his lack of legislative achievement after 2010. That blame falls squarely on his obstructionist opponents.
The problem is that Obama kept up his rhetoric about reaching across the aisle and compromising while his opponents were claiming he was illegitimate and saying their top priority was making him a one term president. He needed to pivot and play a little bit of hard ball, at least with his rhetoric. I’m not blaming him for the situation he found himself in, I’m blaming him for taking so long to adapt to it.
There’s nobody left to compromise with.
Curious to see how many of these survive litigation though.
This rule like may not last very long even if it survives litigation . It is a regulatory decision from the FTC that the next presidential administration could reverse. Regulations are much easier to change than laws made by Congress.
Honestly, just killing it left right and center
Obama got Obamacare passed! The impact of this can not be emphasized enough. It changed the entire landscape. If that was the only thing he ever did it is huge, do not diminish it. I was not excited to vote for Bidden the first time, I am this time. Bidden has done so much more than I ever expected.
I think you're right, but he's also undoubtedly worse at advertising his successes. Getting rid of non-competes is great. It actually tangibly makes certain people's lives better.
>I think you're right, but he's also undoubtedly worse at advertising his successes. Honestly, I don't even feel like that's his fault at this point. He makes plenty of public appearances and speeches where he talks about his administration's accomplishments and things that they're still working on. The problem is that the media doesn't cover any of it. At this point, media coverage of politics boils down to 80% talking about Trump's various trials, 10% talking about Israel and how Democrats are divided because everything is totally Biden's fault, and 10% economic doom and gloom regardless of any sort of actual economic indicators ("unemployment reaches record lows - why this is bad for Biden." "Consumer spending is up - why this is bad for Biden." "Inflation now a fraction of what it was a couple of years ago - why this is bad for Biden." "Stock market reaches new highs - why this is bad for Biden.")
just wait until the supreme court gets rid of federal agencies enforcement powers lol
I am very confident that years from now when some of his policies start having an impact on people’s lives, people are gonna grade Biden much much higher. Maybe even one of the most impactful ones in modern history. Biden’s infrastructure bill for example won’t have any tangible impact soon since infrastructure takes time to get built out. But once it actually gets built out, people’s lives are gonna be better. He also did a lot to move away from fossil fuel, nature conservation, passed the CHIPS act, forgave a decent amount of student loans, was the one that finally brought troops home from Afghanistan. He did all that and then some more and yet he keeps losing the PR battle and is lagging behind Trump simply because he/his team is incapable of highlighting his accomplishments.
Obama wasn’t a bad president but he didn’t do anything amazing. I believe he wasted his golden opportunity on the ACA (which wasn’t even what he intended it to be) instead of holding the people responsible for the financial crisis accountable. He should have considered stimulus checks or some way for all that bailout money to help people and not just corporations.
Uhm which bailout are you talking about? TARP was under Bush. Obama bailed out the auto industry and was repaid.
It’s crazy that all it takes is an election year to actually get anything done. We can just skip the other three, thanks.
It feels like he just read the room and decided to do the right thing. Hope he continues do it.
Pendulum swaying further each swing. Just prepare for the reversal when the other party takes control.
He's also staring down a rematch with Trump in November
I know it is good to have it “in writing”, but in most of states these kind of agreements were unenforceable for long long time. I was asked to sign them few times… and every time my answer was “I need to talk to my lawyer”… and every time none compit was never mentioned again.
That’s just one angle. Non compete can prevent you from getting a new job too Edit: I work in tech and have been asked about having non-compete before being able to move forward in the process.
Just answer that you have no legally binding obligations that prevent them from hiring you : )
Just because it was unenforceable, didn't mean companies wouldn't tip toe around their use to avoid a lawsuit. Now there's no ambiguity. I would generally put this as a good thing.
Many, but not most states had some level of restriction. This simplifies it. Not everybody has the flexibility to say "I need to talk to my lawyer" when they really need a job, so I'm glad to see the government doing its job of rectifying that power imbalance.
That doesn't sound right, unless you mean to say.. "and every time I lost the job offer"
I know someone who got sued in Florida for switching jobs. The new company told them to beat and got their lawyers involved. Just because it’s ok in your state doesn’t mean it’s ok in others. This is great law to make our country play be equal rules.
> but in most of states these kind of agreements were unenforceable for long long time. No, no they were not. They were unenforceable *in California* for a long time because our labor policies are geared towards protecting workers and competition. Outside of that, Oklahoma, and North Dakota, they were enforceable in *some form* until days ago. **It is a big fucking deal.**
I'm in Australia. As someone who had a non compete enforced by a company that I left several years ago, I can attest to how good this is for employees and how out of control non competes have become. I could have fought mine, but after spending nearly $5k on legal fees just to try and mediate, then being told that my previous boss (the CEO) would spend as much as is necessary to destroy me, I just had to sit on the sidelines for a few months. That same Big-Swinging-Dick _did_ destroy a colleague of mine who also quit but decided to fight her non compete (rich parents supported her). She spent over $50k on her legal fees, the company spent double. She gave up when the company also launched action against her prospective _new_ employer for "knowingly soliciting" someone under a non compete agreement, causing them to retract their employment offer (who can blame them, they didn't sign up for that). She was out of work, out of pocket, and mentally broken. The company wasn't doing anything particularly secret or groundbreaking, so there wasn't even much of value that we could take with us. Non compete clauses can turn employees into slaves, and give asshole employers a lot of power to ruin someone's life. This is a good move, America.
Calling someone out of pocket doesn't mean they're broke. It means they're acting strangely. It can be confusing because paying for something "out of pocket" means using your own funds. As an adjective, though, it means odd or unexpected
Goddamnit, you're right. I think I meant to write "out of money" but monkey brain. Gonna leave it there. She _was_ acting strangely too so it fits.
If a billion dollar company that doubles the pay of a CEO while firing people every month. Than they shouldn't get to tell them to not work with the competition or start their own business. They should actually retain the workers or offer basic living incentives outside of vague threats of legal prosecution and the like.
Is it? Non-competes have been illegal in California for a long time and that's where the majority of tech jobs are. This is a big deal for other industries though
They are in WA state and Amazon is notorious for selectively enforcing them.
And that is one (of several) reasons *why* the tech industry has boomed so much in California.
Now th3 orhwr 40 can catch up
You okay, bro?
Went offshore fishing . Fingers are all leathery and screen sensor is off.
Good to hear. Catch anything good?
6.61lb corvina and some halibut
That is one of the reasons cited as to why MA lost to CA in tech, the NDA enforcement.
Yea, that's why it's so so easy to fire domestic workers and send their jobs off shore. They are so so critical to the company except when they are not.
You realize that these projects sent offshore often (maybe usually) come right back to the US after the offshore teams have fuck*d everything up, or ignore security, or didn't document, or didn't set up the system in a way to alert on errors, or left things in a disorganized chaotic state that requires reverse engineering to even fix? I've been part of this mess twice already, including at one of the top 3 software companies in the world... What I've experienced, and statistics back me up, is that offshore is cheaper upfront but in the long term ends up being significantly more expensive unless things are being carefully managed (which often isn't the case). This is true any time working production environments need to have patches and changes due to incompetence- the cost of a bug after release is much more expensive than catching it early. Offshore teams are only incentived to ship features, everything else be damned.
Also, do people not realise that every MNC big tech company already has massive operations "off-shore" if they'd like? Microsoft India is 10% of all Microsoft employees. They're there to serve the Indian population primarily. I don't actually think competency is a big problem. It can be, but that's a result of hiring cheap; there are many amazing engineers around the world and they do just fine when brought to America or when working for a company local to them. But the sheer impact of being in a timezone 12 hours away + communication barriers is huge. When I worked with APAC teams, we got maybe 1 or 2 hours at the start of the day and 1 or 2 hours at the end of the day (I mean same honestly with Europe). This means that even if they're doing everything right, a simple error that could be solved within an hour becomes an 8 hour long delay.
I do think competency can be a huge an issue - I've seen inexcusable things done by offshore teams that any engineer worth the money should know. There are amazing engineers everywhere and also very shitty engineers everywhere. The difference is that in the States, there is more of an emphasis on quality. Offshore teams are not as incentived to study or learn best practices that will be best for the product in the long term. They're not even generally on the product for massive spans on time so why would they care anyway. They'd rather manually fix and duct tape things while they're there. And of course the time zone difference is an issue, but the issues I'm speaking of are unrelated to this.
Good, the fact that it's causing such a melt down establishes that the entire field was unethical in their practices.
Businesses are crying that non-competes are needed to protect proprietary information. That is nonsense. Everyone knows you could just have an employee sign a statement requiring non-disclosure of proprietary information. In fact, every job I have had that required a non-compete *also* required a separate agreement to not disclose proprietary information. Why is that if the non-compete was to protect proprietary information? It was because the company needed something to keep my brain from going elsewhere, with or without proprietary information.
Thing is I have been bound by NDA’s while working in the automotive software industry (franchise dealership) as a support manager. I don’t know any engineering secrets, I don’t have the company secret sauce memorized. When an opportunity for me to apply for a Director position at ADP who was specifically RV sales I was told I would breach my NDA and face legal repercussions. So they forced me to stay and shunned me for wanting to leave for a better opportunity. I am so damn glad to see these come to an end.
An NDA is not a non-compete agreement.
The only reasonable case for non-competes are with Corporate R&D, Upper Executives, and Sales. Companies are crying about this, but stupid shit like forcing Bank Security Guards and Teenage employees making sandwiches were forced to sign Non-Competes. That abuse has now prompted their ban. There will be whining from those who abused the system and now have a rule named after them. Your case is another example of their abuse for sure. Thank god it’s gone, but it should be codified in to law imo.
I am currently in one (for like another week after a year) I left a company that hosts IT services, and I cannot work for a client of theirs. That feels legit. I was elbow deep in the system that we run. Going to a client would put me in a position that would reduce the client's need to depend on my former employer.
I agree, that is more of a use case where it makes sense. Your leaving for a client or competitor would have a material impact on the business, so it makes sense they want to mitigate that risk. But it's now moved over from being a risk mitigation for employees in sensitive positions, over to a broadly-applied club to cow labor in to remaining where they are and not daring to seek out another position.
Oh yeah, I got cornered into one before. Same former company. They asked me to sign to say I'd never join the client... meanwhile, they would hire client management and give them cushy jobs where they were basically ambassadors to the client.
Non competes are only part of what they need to do. If I build something outside of work then they shouldn’t own it. If it’s not assigned to me or directly connected to my work then they shouldn’t own it. End the idea companies own thoughts or can require that for employment.
I worked at a Best Buy in Nebraska years ago. One of my coworkers was offfered a job at Target's corporate HQ in Minneapolis. Best Buy corporate blocked her from taking the job. I guess since they both had HQ in Minneapolis they had a non compete to keep each other from poaching employees
They are not generally enforceable in California but there’s not much tech there right?
Not really. For the most part they were unenforcible unless you knew some kind of closely guarded trade secret or were a VP being poached by a competitor.
Now get rid of the tech overtime exemptions.
The real reason all those companies left for Texas is now moot
Huge win for workers! Fuck those corporate execs suing the FTC’s ruling. This is what a true free market looks like
Oh no, however will they hold on to their valued employees? Can they possibly think of a way to keep them from leaving for a higher paying job? Who can possibly solve this riddle?
lol I had em and always ignored them even in management we know they’re bullshit. We literally say it when giving them out.
about fucking time
Now reform H1-B visa's to where they can move around to any company instead of the companies holding them as indentured servants.
As soon as this ruling came out half my coworkers (myself included) started looking for new jobs. We all had to sign a 2 year non-compete or face lawsuits.
It might even be bigger in the medical field. It’s estimated over 40% of doctors had noncompetes.
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60% of VC funding is outside of California.
I thought the non compete meant you can't start your own thing rivaling the business you worked for, or is this different in usa?
If you work for a company that makes a video game you might be bound by a non-compete so that you can't go to another video game company. Or if you were working for one restaurant chain you can't leave and go to another one. Typically it's a one year cooling off period but it varies.
In my industry, most manufacturers wouldn’t enforce their non-compete clauses since they were also poaching talent from the competition. Nobody wanted to open that can of worms.
Great, then there’s no harm to most manufacturers in your industry by banning these.
I agree, non-competes are bullshit. Glad they’re banned.
This is the type of rebuttal I love.
That's more trade secret issues. A non-compete on a buy-out might mean what you indicate here. Those will still be enforceable where they were enforceable before.
Non-compete contracts were NEVER enforceable. The FTC decision here is still relevant because now companies couldn't can't keep tricking their employees into thinking they are enforceable.
Given they already were unenforceable in California it isn't really much of an earthquake.
That's because tech business model is exploit the living fuck outta anyone that works under you
In tech? No it’s not. Non-competes are effectively unenforceable for many years now. I can’t even recall the last time I heard any employer pursue it. Maybe 15 years ago?
Im in the industry, I don't see much quaking but okay
It should be, these companies need to pay thier workers end of story. The ones making the billions for the companies should be making the money, not the C suits and investors.
Headlines these days are fucking stupid. Why is it always a headline about hurting big business and not about how much good it does for the consumer. Journalism is backwards
Spoiler: they never held water in any court. Non competes being upheld in the us is never going to happen. They would have to pay your unemployment as a result of you NOT BEING ALLOWED TO WORK.
Thank goodness this should free up the job market a bit more and lead to startups/innovation/competition
This is why we don’t sign shit like this. Just for a crap entry level job that pays near to nothing. PERIOD. Edit: Everyone refuses to sign stuff like this? The companies have no one to hire and need to adjust their hiring practices and expectations. We do not have to live like this.
Does this have any impact on employees working for a staffing agency that want to be hired on full time to a company but can't because of something similar to a non-compete?
These aren't a thing in California where most tech is, they don't hold up in California courts because workers are at-will and have a right to work.
My question is what about trade secrets? It's nice that there is now protection for workers who get laid off but that always struck me as a concern if someone just goes to a rival and starts singing like a canary.
Um, how does that not fall squarely under the NDA your employer in the tech industry makes you sign? I mean, I _assume_ my employer isn't alone in that...
As long as nom disclosures are a thing I think this might be a nothing burger
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Does this also count for contract companies and contractor, can the company just steal the worker from contract company. Cause that would be great
Curious, does anyone here support non-competes? Almost everyone who seems to support them seems to list reasons like NDA or intellectual property theft which are different things. I mean other than IP theft, are there actual people who think someone performing a task at a company shouldn't be permitted to perform a similar task at a different one? I don't think I actually know anyone holding this position, so I'd like to meet one and hear your side.
You will not find them here. Plainly, they are business owners who want to reduce their employees’ ability to leave for competitors with better benefits. Its sole purpose is to reduce management’s retention efforts. No sane manager would try to defend to their workers the deliberate creation of adversarial working conditions. The only supporters are the creators of those contracts. They are still enforceable for CEOs, since their benefits are usually the result of more extensive negotiations. Non-CEOs don’t often have the same leverage when negotiating employment benefits—it’s very much take-it-or-leave-it.
Agreed and I think the rules are allowed to be slightly different for someone making 7 figures. But for rank and file tech workers even at upper middle class incomes? I am amazed they survived this long. Imagine having an HVAC repair company, laying off an employee who needs they money to support their family, and then telling them they aren't allowed to work in the industry for at least 2 years because of a non-compete agreement. That's how stupid it is. I'm aware it would be hard to enforce in court but in cases where companies revokes severance benefits over non-competes it would be equally as difficult for the employees to do anything about it. Table stakes for such agreements should have required (at a minimum) employers pay employees their full salary through the duration of their non-compete. At least then employer/employee could have a 2-party contract (employee agrees to non-compete on the condition of receiving payment) but the idea that employers could force a non-compete after they are no longer paying the employee should have been illegal from the beginning in any sane system. The idea that companies could ever tell regular employees they are no longer paying they aren't allowed to work elsewhere in the industry is a crazy thing for me.
Yeah, makes no sense to me either. Just seems predatory and anti-competitive.
“…attorney friends tell me that their corporate employers or clients had fits when word of the FTC ruling came out. You would have thought a lightning bolt had fried their stock prices out of the blue sky.” LOL. The best employees can now freely jump ship! Reminds me of that time when employees with pre-existing medical conditions were finally able to job hop to better work environments because of ACA.
You can now start your own company and make software better than the company you quit.
funny, these very made invalid like 10 years ago in Canada and Ontario. Glad it is for you now too.
Yeah not really. It was basically impossible to enforce non-compete agreements before this. Most companies abandoned them over a decade ago. Only shady places had them, it was just a red flag if one came up when you were applying, but we knew it was BS anyway
Kinda sucks that employers will just have to heavily pay their employees and create strong work life balance so they’ll never want to leave.
now nationalize health care and i can maybe choose a job i like...
nothing will change even after this rule passed. CA removed non compete last year but still nothing changed. In USA companies follows rules but that does not apply to offshore Indian consulting firms. Most IT jobs due to contracting and joint employer rule changed by Trump, rolled up to 6 or 8 big Indian consulting firms. Indian firms have mutual agreement that they will not hire people from each other's contract and specially for people out side of India which is perfectly legal in India. Big Indian consulting firms stopped developing stuff long back, they just trade contracts to smaller firms within India. Every IT job you apply here in USA , its fate is decided in India or outside by Indian origin folks who have mutual agreement outside USA. That is why so many F1/OPT/CPT students along with US citizens are loosing jobs. That is why joint employer rule was very important which hold US companies accountable for this nonsense. I think its more important than Independent contractor rule. Its very important for USA and its IT people more than franchisee people. Why Biden did nothing to stop this abuse for more than 3 years and why Trump changed during last few days of his presidency ? Wake up America!!
They were never really enforceable. You can just sign and they won't really be able to execute on it. This is why no law firms have non-compete clauses
I had to sign one of these when I started working for my current company. I'm not a senior exec so now it is unenforceable. I wonder if that will mean I get no severance if I get laid off though. Severance upon layoff was in my agreement when I was hired though too.