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'Send Noncompete Agreements Back To the Middle Ages' (bloomberg.com)
Stephen Mihm, Bloomberg contributor and associate professor of history at the University of Georgia, argues against the use of noncompete agreements (NCAs) because they limit the free flow of employees and discourage innovation. An anonymous Slashdot reader shares an excerpt from his report: The agreements, known as NCAs, forbid workers from taking valuable skills acquired from one employer to a competing firm. They first appeared in the Middle Ages, when master artisans required them of apprentices because they didn't want to face direct competition once their proteges set up shop on their own. Courts eventually sanctioned these restraints, provided they didn't harm the public interest, establish a monopoly or unduly restrain an employee's right to work. But this trend toward wider use of the contracts, which gathered steam from the late 18th century onward, conveniently omitted that they originally applied to skilled laborers operating in a pre-capitalist society. Yet employers increasingly used noncompete clauses to limit the mobility of unskilled wage laborers along with skilled workers.
Have NCAs helped or hindered economic growth? The most famous study looked at California, one of only a handful of states that do not permit NCAs. The de facto prohibition of the agreements affected skilled and non-skilled workers alike, and employees high and low could jump from job to job without any fear of legal reprisal. The mobility seems to have disseminated innovation very swiftly from company to company, creating the kind of dynamism and technological spillover that helps foster long-term success. The prohibition of NCAs clearly benefited Silicon Valley. Further proof was provided by the comparison to another claimant to high-tech supremacy: Route 128 in Massachusetts. The conclusion was that California's ban -- and the embrace of the agreements in Massachusetts -- helped tilt the balance of power to California.
Have NCAs helped or hindered economic growth? The most famous study looked at California, one of only a handful of states that do not permit NCAs. The de facto prohibition of the agreements affected skilled and non-skilled workers alike, and employees high and low could jump from job to job without any fear of legal reprisal. The mobility seems to have disseminated innovation very swiftly from company to company, creating the kind of dynamism and technological spillover that helps foster long-term success. The prohibition of NCAs clearly benefited Silicon Valley. Further proof was provided by the comparison to another claimant to high-tech supremacy: Route 128 in Massachusetts. The conclusion was that California's ban -- and the embrace of the agreements in Massachusetts -- helped tilt the balance of power to California.
Get rid of non-compete clauses so people can go wherever they want with the knowledge they have.
We should also get rid of any law which says someone who works for government can't leave and use their knowledge working for a firm lobbying the very place they just left.
No problem, right folks?
Using them to protect trade secrets is one thing, using them to render former employees unemployable without risking lawsuits is unacceptable. The US in general needs stronger worker protection laws.
If "those assholes" take the knowledge back to China or Russia and get paid handsomely for it, good luck suing or prosecuting them if they stay outside of countries in the US sphere of influence.
I've had several employees leave to start their own businesses doing the exact same thing we do. I'm friends with all of them. We steer work to each other, and collaborate on larger contracts to compete with the bigger firms.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
You linked to "Huawei Reveals the Real Trade War With China"
With the exception of a few fringe states (specifically Massachusetts), they're generally unenforceable when it comes to preventing an employee from seeking gainful employment.
Given that you said "jobs prospects" instead of "job prospects", I'm guessing you're in the U.K. My advice -- come to California.
Two California companies I signed with had NCAs. Rather than argue with legal I just crossed those section out, and any other I didn't like, then signed it. Didn't hear any complaints back.
"The ability to delude yourself may be an important survival tool" - Jane Wagner -
I'd actually love to hear more about that dynamic. Got any helpful insight on how you all work together?
Politicians supporting liberal economy should be against NCA, since labor mobility is a tenet of the Optimum currency area theory.
Hating people who leave you (and your tribe) is an instinctive, knee jerk reaction hardwired into the more primitive part of our brains.
Overcoming it is the medieval equivalent of marrying you and yours to other noble families to consolidate alliances.
Even if you work for yourself, there's a mighty good probability you once worked for others in the same field. Don't hate your employees for wanting the same opportunity.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
Get another lawyer.
So far as I know there's no country in the western world that lacks "Right to work" laws. That means that if your specialty limits your career options and you're in a non-compete, then you should be able to employ "right to work" since no company has the right to lock you into your position by making it impossible to find employment elsewhere.
I think right to work sometimes even has requirements that if they don't offer you an exit clause... something like "You can't compete for 2 years, though if you wish to be released, the company will be responsible to cover your salary during that time" etc... then you have a really good case. Remember, the non-compete isn't to take ownership of you. It's to protect the company from IP theft. If they believe they can't protect their IP any other way, then it's their responsibility to cover the cost of distancing you from the IP during that time.
If they release you at some point, you probably could get a lawyer to make sure you're compensated for your loss of work associated to the non-compete as well.
When someone leaves, it means that we didn't offer them something to convince them to stay. Loyalty is great if you're a dog. But when it comes to someone's ability to place food on their tables, if they believe they can do better somewhere else and I can't offer them the same benefits, that's just how it goes.
Of course... if the guy gets your daughter pregnant, spray paints your living room and then puts up billboards bashing your company.... I think then there's reason for enmity.
The article this post is linked to is incorrect, here is the correct one: https://www.bloomberg.com/opin...
Of course... if the guy gets your daughter pregnant, spray paints your living room and then puts up billboards bashing your company.... I think then there's reason for enmity.
That son of a bitch put up negative billboards? Cretin.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
Get another lawyer. So far as I know there's no country in the western world that lacks "Right to work" laws. That means that if your specialty limits your career options and you're in a non-compete, then you should be able to employ "right to work" since no company has the right to lock you into your position by making it impossible to find employment elsewhere.
Well they can, you just have to be clearly compensated for it. Otherwise it is an unfair restriction of trade.
You get employed because you have skills gained from working in the field.
The employer wants a new employee to hit the floor running.
But they don't want those skills taken to the next employer.
They are the employees skills, not the employers skills.
A company is the sum of the abilities of their employees.
Go well
For software engineers, most NDA/NonCompetes I've seen are written to claim they own all IP except for what you exclude in a postage size stamp area at the bottom--completely unfair to the employee. I write in that area: See attached exhibit A for addendum to this contract, where I then explain that when there are clauses that are in confusion, then the addendum takes precedence, and then I list everything I've ever done, regardless of how booring, including anything posted to my blogs, social media, and personal github page; and I add clauses that the company only owns IP specifically pertaining to their existing products, and any new product work that is expressly added by their own addendum. It's about 5 pages of addition, and it basically inverts the burden of proof back to the employer. Nobody ever reads it, and I've always had to insist on getting it counter signed, but it's always counter signed.
You have the control in these scenarios, never accept a boilerplate NDA. Attach 10 pages of addendum, rewrite it, bring your own, whatever. But don't accept the stock one, ever.
tora
Glad it worked out for you. A friend of mine is a contrasting example. He runs a rural hotel and and noticed that most of his business was on weekends, so during the week he had a lot of empty rooms and couldn't give his staff as many work hours. So he came up with the idea of a weekday camp program - urban elementary schools would send a class to spend a week at his hotel. The children would go on guided hikes of the surrounding countryside and playing outdoor games, learning about animals, plants, and the environment. He discussed it with the schools and they loved the idea, he just needed a curriculum the schools could review and approve, and people to run the camp. So he hired a half dozen people to develop a program and run it.
A year later, after he'd invested more than a half million dollars paying for materials and these people's wages to develop the program, it was complete. He just had to present it to the schools so they could sign up. Then overnight, all six of them quit. They left paper copies of the program he'd hired them to develop (teaching materials, curriculum, games, etc), so he spent a few months finding new staff to run it. After they were hired, he approached the schools and...
That's when he learned that the original six employees had completely poached his idea. They'd taken the program he'd paid them to develop, rented a nearby camp facility, and were running it themselves. They'd also poached his list of contacts at the schools, and with a 3 month head start they had already signed up the schools most interested in the idea, leaving scraps for him. He never recovered financially, and his hotel was on the brink of bankruptcy for close to a decade. Last time I visited, it was horribly run down because after losing his original investment and without the expected new revenue, he had had to put off repairs and updates. Basically those six employees fleeced him out of a half million dollars in R&D costs.
Yeah there are asshole companies who will abuse NCAs to grind employees under their heel. But there are also asshole employees who will steal whatever they can from the company without a NCA. Given that abuse can happen on both sides, I'm really not sure what the solution is.
Wasting half million dollars on a project not related to his core business sounds like weird decision. He should have at least spun off those employees as a subsidiary and wrote all R&D costs as subsidiary's debts. That way even if they decided to go their own way they would still have to repay any costs incurred. NCA isn't the best solution really, properly organized subsidiary companies and well thought out contracts are.