Slashdot Mirror
Are America's Non-Compete Laws Too Strict? (nrtoday.com)
Slashdot reader cdreimer shared an article from the New York Times:
Idaho achieved a notable distinction last year: It became one of the hardest places in America for someone to quit a job for a better one. The state did this by making it easier for companies to enforce noncompete agreements, which prevent employees from leaving their company for a competitor... The result was a bill that shifted the burden from companies to employees, who must now prove they have "no ability to adversely affect the employer's legitimate business interests." The bar for that is so high that Brian Kane, an assistant chief deputy in the Idaho attorney general's office, wrote that this would be "difficult if not impossible" for an employee to do...
For the most part, states have been moving toward making it easier for people to switch teams... The most extreme end of the spectrum is California, which prohibits noncompete agreements entirely. Economists say this was a crucial factor behind Silicon Valley's rise, because it made it easier for people to start and staff new businesses. But as states like Utah and Massachusetts have tried to move closer to this approach, legislators have run into mature companies trying to hold onto their best employees... A recent survey showed that one in five American workers is bound by a noncompete clause. They cover workers up and down the economic spectrum, from executives to hairdressers.
Two economists tell the newspaper that since 2000, U.S. workers have changed their jobs less and less, which is sometimes blamed on strict employment contracts as well as the occupational licensing laws which affect a third of America's workforce. The Times reports that noncompete clauses ultimately end up keeping workers' salaries lower, "because most people get raises when they switch jobs."
For the most part, states have been moving toward making it easier for people to switch teams... The most extreme end of the spectrum is California, which prohibits noncompete agreements entirely. Economists say this was a crucial factor behind Silicon Valley's rise, because it made it easier for people to start and staff new businesses. But as states like Utah and Massachusetts have tried to move closer to this approach, legislators have run into mature companies trying to hold onto their best employees... A recent survey showed that one in five American workers is bound by a noncompete clause. They cover workers up and down the economic spectrum, from executives to hairdressers.
Two economists tell the newspaper that since 2000, U.S. workers have changed their jobs less and less, which is sometimes blamed on strict employment contracts as well as the occupational licensing laws which affect a third of America's workforce. The Times reports that noncompete clauses ultimately end up keeping workers' salaries lower, "because most people get raises when they switch jobs."
So, let me know if I have this right:
Americans need to stay in their jobs to have good health insurance
American corporations can fire almost anybody anytime, for any reason
Americans have almost no vacation time away from work
And now:
Americans can't move to a different job, if it happens to be in the same field.
So explain to me why this isn't corporate slavery.
Of course non-competes are ridiculous, a kind of indentured servitude, but does anyone working in a "rank and file" kind of job (say, making less than $100k) have any experience in having them enforced against you?
My employer once asked that I sign one (after about 2 years of employment). I gave it to a friend who was an employment lawyer and he said that unless I was given "consideration" (title, raise, etc) specifically tied to signing it, it was unenforceable in my state. His advice was just to sign it and know it wasn't enforceable.
My theory has always been that unless you're some kind of high wage "key player", most of the time it's just not worth an employer's time and effort to enforce them. They have to take some time and effort to figure out where you're working, know enough details about the job to know if its actually competitive (made harder if the new employer is an actual competitor), and if they get that far, actually turn to attorneys to enforce the contract. And none of this takes into account the potential for subterfuge -- quitting to become a "freelancer", moving out of state or a new employer actively furthering subterfuge by hiring you freelance for a period or hiring you under a bogus title.
I don't see any employer action happening for less than a $10,000 outlay and that kind of spending being just does not seem worth it for "ordinary" employees.
Of course there may be exceptions, like an "ordinary" employee who happens to work closely with a particularly important trade secret or filling a job in a very narrow field where the opening itself may have been the subject of gossip among the field's community.
It depends on the job and the employer if it's worth to stick around.
But having "non-competitive" laws is almost like Jim Crow laws.
If builders built buildings the way programmers wrote programs, then the first woodpecker would destroy civilization.
IIRC from the BLAW 20x or 30x classes I took a long time ago, for a contract to be binding the two parties have to be equals.
Someone that needs a job is – generally speaking – not ever going to be the equal of a potential employer that's dangling a contract saying "sign it or no job." Such a contract should be unenforceable AIUI. And you always have the option to strike out that clause as you're negotiating. (Whether the potential employer accepts it is something else.)
Now, whether a court is going to agree that such a contract is unenforceable is a different question.
As for me, when I resign from my jobs I don't tell my soon to be ex-exployer where I'm going. When they ask, I tell them I haven't decided and I'm taking some time off before I decide what I'm doing. Well, Saturday and Sunday are time off. It's really none of their business where I'm going next.
So between a) (that clause of) the contract being generally unenforceable, b) it being none of their business, and c) I'm perfectly capable of not using any of previous employer's IP in my new job, I personally feel like I'm in pretty safe territory. It has served me well for the 30+ years I've been working as a software developer.
And BTW, IANAL. Ask your own lawyer for advice in your particular situation.
I am fifty. While I have had a couple with brief tenures, the majority of my jobs have been 5-10 years or more. It wasn't even a matter or being stagnant. I got raises, promotions, and challenging work that I enjoy. I would say it depends on the person. Choose the right jobs and have the right skillset and one does not have to jump too often.
In Sweden these are legal, but voided when your employment ends. I.e you can have a non-compete clause, but it is only enforceable as long as you pay the salary.
In Germany a non competition clause must be:
o time limited
o focused on a certain industry
And: payed!!!
If I want a certain employee not to compete I have to pay him for the above period if I fire him. And if the job is in a bracket where this makes no real sense, e.g. he is not a researcher/scientist or director, clauses like that are invalid in the contract anyway.
Other way around, if the employee is quitting, I'm not sure how that is handled.
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
It really depends on where you work. I'm over 40 and my time on the job has been increasing as I go along
- first job was 6 weeks (company closed)
- second job was 20 months (got fed up with trying to work in the system and got a better offer).
- third job was three years (split between two companies the second one died off)
- forth job was four years (got a better job and didn't want to do on-site support in the jungles of Guyana)
- fifth job was six and a half years. (left because they gave my company vital function to experts in the field: 2 new grads in China).
- Current job is going on 4 years, don't plan on leaving it till I retire
I'm one of the newest people in my group too. Most people have been there at least 8 years, some at 15+ years. At 42 I'm in the middle of the pack when it comes to age too (we did recently get a bunch of young wippersnappers in their 30s). It is still software engineering. Though I do pay price of it not being very dynamic and bleeding edge it is stable.
As I and others have said its all depends on where you work. Some places are very unstable, others are stable.
Software Engineer & Writer of Military Science Fiction and Fantasy Blog: petermwright.com Twitter: WrightPeterM
1. blog posts exaggerate and pick out the extreme cases, just because Idaho passes some bone-headed restrictive law doesn't mean that every state makes it hard to change jobs. In California most non-compete clauses are essentially unenforceable. 2. "Americans have almost no vacation time away from work" : this is hyperbolic. Most Americans in tech positions have 2-3 weeks of vacation plus company holidays. 3. there's a reason that America has 5% unemployment and a thriving economy
This got hashed out in CA years ago, and IIRC the court ultimately agreed with the ex-employee that in a high skills field the ex-employer would need to pay more than the former salary to compensate for the aging of skills and loss in promotion opportunities. So, effectively non-competes are unenforceable in CA because no employer wants to put in the contract that if the employee chooses to leave the company may decide to give them a big fat raise and pay them for two years to do nothing, i.e. to achieve clear enough "meeting of minds" to make the contract enforceable was too onerous a burden for employers.
Idaho has chosen to go the other way. Which gives a strong incentive for the most skilled workers to leave the state.