The case for banning non-competes

Also the people claiming (and believing) that they have no intention of suing are not the people who make the decision to sue or not (unless it's an extremely small company, or you are an important enough hire to be discussing this with the CEO and General Counsel). Even if they have the best intentions, some random recruiter or manager really has no insight into this.

> They implored me to trust that they had "never sued anyone" and "have no intentions to", and I think they honestly believe that. But then why have the non-compete at all?

Exactly. 'That's great; we can resolve that issue easily. Let's just skip the non-compete - you're not using it anyway and I'm not comfortable with it.'

EDIT: A non-lawyer's suggestion (talk to a lawyer before you do this): Skip signing or edit documents (cross out and initial sections you don't like, add words - and initial each change) and then sign and send it back. Don't say a thing; leave it to them to bring it up - most people won't bother disputing it with you.

> I'm in a US state that allows non-competes and recently turned down a job because I wasn't comfortable with the non-compete expressly because the company's opinion of its own market was so broad. They implored me to trust that they had "never sued anyone" and "have no intentions to", and I think they honestly believe that. But then why have the non-compete at all?

FWIW you can try editing the contract, removing the NCC clause, or tacking on steep consideration for exercising the NCC (as well as hard limit on it).

If they never sued anyone and have no intention to, they don't need an NCC clause, strike it out and ask them to sigh the updated contract.

> They implored me to trust that they had "never sued anyone" and "have no intentions to", and I think they honestly believe that.

It doesn't matter what they believe, because a company does not have the same consistency of goals and actions as a person, and even a person can't be entirely trusted on things (even family sometimes turns on each other if the circumstances are sure enough). A company? Their entire board and management might change over time, or they might be bought out and have another entity with different goals.

Put another way, when considering and NDA during hiring, you should consider whether you would work for Oracle under the same NDA. Because what would happen if Oracle bought (or bought a controlling interest) in that company tomorrow? Do you still think you could go on past behavior with regard to legal action?

This is the exact same with privacy, and that's where I usually bring this up. It doesn't matter that I think Google is unlikely to do anything bad with the private info they have about me right now. I'm more worried about the Google (or whoever ends up with the data) five, ten or fifteen years from now.

> be financially compensated (significantly, usually on the order of 50% gross salary for the entire period)

I think this is the most important protection that's needed in the US. NCCs for high-level executives with golden parachute clauses actually makes a lot of sense. If their former company is essentially paying them (usually a lot!) after they leave during the NCC period, that is unlikely to get abused and overused.

For anyone who's knowledge and connections is not important enough to those kinds of payouts offered to C-suite execs, NCCs are just a way to bully employees into not leaving.

As another comment said, and I can confirm from personal experience, just the fact that you need these to enforce a non-compete is no panacea. There is usually enough probable cause, or whatever legalese name it has, to take an employee to court and cause them enormous havoc and expense (UK anyway, but the rest of your post reads consistent with UK laws).

Additionally, if you think you are small fry for a firm to sue you, not necessarily. Enforcement of non-competes is just as much aimed at deterring others from trying as it is at affecting you personally, if you spread the cost for the company over the 10-20 employees who are deterred, it suddenly looks cheap.

Even if against the odds of going against a large corporation with deep pockets you eke out a win in court, you are almost certainly not getting all your money back, and none of your time and stress either.

Those NCC/NCAs are unenforceable in California (outside some very specific exclusions, like C-level/founders), and California thrives, arguably because of it! I don't want my employer to be able to bully me into a contract where I can't switch to whatever job I want (even for "max 2 years" and half my previous pay...). A blanket ban clearly works and removes some of the employee/employer power imbalance. Should be the end of discussion.

Apparently in the UK non-compete are enforceable even when non remunerated, although your other points might stand: the non-compete must be in pursuit of a business need (i.e. not just a punishment because you left), and as should not extend in time and space more than required to fulfill that need (non-compete more than 6 months are rarely enforced).

If you're using melodies and samples from work hours, then maybe not. And it would be tough to argue that your at-home trading app code is completely uninfluenced by ideas you have at work.

Why is that obvious?

Because it creates a clear conflict of interest; stock trading apps compete with each other much more directly than do music albums.

You know, you're right?

I've been so indoctrinated in how non-competes work that I didn't even see that this wasn't obvious. Gah.

> If I work as a studio musician can I also be working on my own album after hours?

Yes.

> Why is that obvious?

Just because there's a law somewhere that covers both a part of making music and part of making software, and just because some programmers make music and some musicians write software, and both are sometimes creative, doesn't mean they have much in common.

> if you work at a company like that (faang, basically) you probably have a choice of working elsewhere

Heh. I advise early career students from my alma mater. One of them took a job with a mom-and-pop web dev + IT firm. Super mom and pop. Like, maintaining word press and similar installs for maybe a few hundred clients and then bundling that with generic IT services (computer repair, maintenance, blah blah blah). Basically, as boring as you could possibly get.

That employer told my advisee that because the company develops software, their non-compete covers all software.

Are they correctly interpreting state law? Absolutely not. Does that matter to a 2x-year-old making 80K worried about losing their job, being sued, being blackballed in their small regional labor market (which they don't want to leave for family reasons)? Also no.

> 2 - every such agreement I have signed has had a “carve out” clause: you can list things you’ve been working on (which is vague, I have listed areas I’m interested in and have looked into and counted that as ”work”) and exclude the stuff listed there from the agreement.

Wait, are you sure that list works how you think it does?

The vast majority of employers won't even talk to you about the scope of their non-compete.

At the outset, you are supposed to white-list things when you start employment. But then anything non on that white-list (which includes every idea you have after the moment you fill it out!!!) has to be assumed to be covered under the NDA, unless you're willing to risk a court battle and an enemy.

> They have to notice you're at the other company, then go through the trouble of suing you. For relatively low-level workers, I doubt it'd be worth the trouble.

IIRC, No, they just let the other company know about the non-compete, then suggest that once the new employer has that notice, continuing to employ you constitutes tortious interference for which the old employer might sue the new one. Then the new company decides whether you are worth a possible lawsuit. For relatively low-level workers, it's usually not worth the trouble — for the new employer.

De jure, maybe, but de facto it most certainly can, as the OP's anecdote attests to.

I wonder if the "I have read the Terms and Conditions" checkbox has some responsibility for this.

I'm constantly amazed at how many people don't seem to understand that a contract is a negotiation. Most people wouldn't dream of taking a job that didn't pay enough financially, but agree to jobs with awful terms and conditions because they didn't read. We are all used to contracts that are too long to understand.

The very existence of a non-compete will also scare off some employers. I worked for a very small company for a number of years and we basically wouldn't even talk to anyone who had a non-compete even if it seemed low risk. Just wasn't worth it--especially if they were from a client.

> re: grad students versus elite universities, under NDA.

I think it is important to not conflate NDA and non-compete, NDAs have a validate place, and are likely what should be used instead of non-competes in most situations.

You don’t even need to say that. My three lines I’ve used for every job are:

The resignation letter simply reads: “Effective today’s date I hereby notify my employer of my intent to resign my position of position on date two weeks from today”. Signed and dated with nothing else.

If asked why, the answer is “I’ve decided to seek opportunities elsewhere”.

If asked where, the answer is “I’d rather not say at this time”.

As you say, there’s almost no benefits and only drawbacks to divulging any other information than that in most cases.

I currently don't know. Just dealt with a random agency who was representing them.

Though if you get a new job during the period the non-compete is valid, the amount can be reduced down to 50%, depending on your income. The company also can't enforce the non-compete if they fire you. The Norwegian way of handling this is good, I think.

This is definitely a problem, especially because industries who frequently utilize the paid non-compete (e.g. finance) often have a significant percent of comp from non-salary (bonuses etc).

But you could fix this with craftier legislation instead of banning non-competes, e.g. maybe you have to pay the persons last years total compensation instead of just their salary

You’re correct, you cannot enforce a non-compete on your average engineer, it has to be some specialist function.

Or, you take a year to:

- Get a Master's degree

- Travel and see the world

- Do consulting

- Take a job in Indonasia

- Teach

- Develop a new open source project

- Etc.

The resume gap / career stagnation is a choice. It's rare that you can have a gap year like this. I totally don't feel bad about paid non-competes.

This feels like it starts to get to the heart of the matter. If you want to compel someone's activities, especially if it involves restricting their employment, seems pretty fair to compensate them throughout the period in which it applies.

Why not 100%?

I believe this is true in most European countries, with minor variations.

This would mean that you can then also work in a related but not competing industry at the same time. It's not a no-work afterwords contract, but don't compete with us. that won't affect your total compensation then, or your career trajectory usually either. The idea is that a non-compete should only be used for someone it will actually matter to the business the, and not all the low level employees that don't have any impact on anything like that. right now you have tech support and call center employees with year long non-competes that prevents the, from working in another similar role at a new company, https://www.protocol.com/policy/tech-non-compete

But a non-compete doesn't mean that you have to take that time off. It means that you can't work for a competitor.

In the current system you will never get wealthy from salary and bonuses, because companies are being taxed through workers by proxy and the pressure is for keeping salaries as low as possible. Only way to break through is to start own business and become lucky. Big companies keep lobbying for more red tape to keep new competition at bay.

Start a new career, start an unrelated company, do non profit work, do research, etc...

I imagine these people have money, so what's making potentially an extra 200k? You make that in a year.