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Too Many Workers Are Trapped By Non-Competes (bloomberg.com)
Why have wages been so slow to rise at a time when demand for workers has pushed the U.S. unemployment rate to its lowest point in nearly half a century? One answer: contracts that tie millions of unspecialized workers to their jobs. Bloomberg reports: In far too many cases, these so-called noncompetes are an unwarranted restriction on freedom to transact and a drag on growth. If Congress won't act to narrow their scope, states should take the lead. The desire to keep workers from defecting to rival employers is as old as employment itself. As far back as the 15th century, English masters, such as dyers or blacksmiths, made apprentices promise not to set up shop nearby. Courts often refused to uphold such agreements, viewing them as coercive. As a House of Lords decision put it in 1893, "There is obviously more freedom of contract between buyer and seller than between master and servant or between an employer and a person seeking employment."
More than a century later, the idea is back in vogue, as companies exploit the power that comes with increasing size and market concentration. In the U.S., new employees are commonly required to sign contracts that forbid them to work in the same industry for a given period. The practice makes sense for highly paid jobs involving big investments in training, and for staff with valuable proprietary knowledge. But it isn't being limited to those kinds of employees. A 2014 survey found that about two in five workers were or had at some point been bound in this way, including workers such as security guards and camp counselors. Some 12 percent of employees without a bachelor's degree and earning less than $40,000 a year were tied down.
More than a century later, the idea is back in vogue, as companies exploit the power that comes with increasing size and market concentration. In the U.S., new employees are commonly required to sign contracts that forbid them to work in the same industry for a given period. The practice makes sense for highly paid jobs involving big investments in training, and for staff with valuable proprietary knowledge. But it isn't being limited to those kinds of employees. A 2014 survey found that about two in five workers were or had at some point been bound in this way, including workers such as security guards and camp counselors. Some 12 percent of employees without a bachelor's degree and earning less than $40,000 a year were tied down.
Companies should be forced to pay the full salary + benefits + average bonuses for the non-compete period. So if they don't want you working for a competitor for 12 months, then they should give you a full salary for 12 months while you are on gardening leave.
Non-competes are a problem, yes, but not the cause of wage stagnation. Job mobility is higher than it's ever been, despite the rash of non-compete contracts. Changing jobs (or threatening to) is often the only way to get a raise now, but it wasn't always this way. The main problem is that companies no longer value experience (except perhaps at hiring time but often not even then) and believe every employee with similar education is interchangeable.
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10 years ago, non-competes were invalid under Georgia law. Then we had a referendum on a ballot to put them in. You'd think that normal people would vote against this, right? But here's how it was worded (from ballotpedia.org) on the November 2, 2010 ballot:
And 68% of the idiot voters fell for it.
Perhaps that's a little unfair to the voters. The wording was clearly insanely misleading; to the point where if I were challenging a non-compete in court, I'd probably start with attacking the validity of the ballot referendum as fraudulent (probably a hopeless avenue, I know).
And that, friends, is a very good example of why you should not get legal advice from /..
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Come to California, where it's always sunny, and non-competes are laughed at by the courts.
I'm trapped by our healthcare system. With the ACA under attack I can't risk leaving, and even is I could I'd be without healthcare for the 90 to 180 days most jobs make you wait for benefits. I'm not saying noncompetes don't suck, but I've got bigger fish to fry.
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In general, non-competes for non-executive employees are not enforceable. I can't think of a single case where a noncompete against a developer has been upheld in court.
Oh, how wrong. I got sued over a non-compete and where it never went to court, just paying the legal fees alone about bankrupted me. They ARE enforceable in some jurisdictions if they are properly written and even if you think it would be stupid to sue over, that doesn't mean your former employer sees it the same way. My advice to you is to pay a LAWYER for advice if you intend to break a non-compete, no matter where you live or how bad the agreement seems. Understand what you are risking in your jurisdiction and don't take legal advice from Google or Slashdot posts, get a lawyer and pay them, then follow their advice.
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The biggest problem is how broad a non-compete can cover.
I can see the problems they can have if I worked for Microsoft on the Windows 10 Kernel team, and I went over to Apple to work on OS X Kernel. However If I Worked on Windows 10 Kernel, and went to Apple iOS Kernel development, the non-compete shouldn't be in play. Because Windows 10 doesn't directly compete against iOS because Microsoft has stopped their mobile device development. And Windows 10 primary market is Desktop.
A Non-Compete shouldn't be broad, but very particular.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
I had changes made to my non-compete clause when I was hired at my current job.
It said I couldn't work for or own another security company *while* working for my new employer. It just so happens that the company I worked for two companies prior, I still owned. I hadn't worked for the company in years, but I still owned it. We struck the ownership clause and put in a clause limiting my involvement in the old company to an advisory role.
The point of this being, it is a negotiation. Read the clauses and if something needs to be adjusted, perhaps be made more specific, bring it up and maybe propose some new wording. The company has a legitimate interest in you not taking their proprietary technology directly to their closest direct competitor, and you have a legitimate interest in being able to work in your field. Find some wording that protects both. Ideally, you can think about what kind of company you want to be working for in 5-10 years and what kind of worknyou want to be doing. You can keep that in mind while adjusting the contract as needed.
I knew a contractor that refused an "updated" contract that changed the non-compete agreements. It essentially covered anything to do with software or devices that used software. And the company wasn't even in the software business. Since he worked on multiple contracts he couldn't afford to agree to it. It was a boilerplate agreement and HR wouldn't budge, and legal wouldn't allow any changes to the boilerplate, even after the VP of R&D claimed that it was essential that they retain this contractor.