The first, a darling "startup" adored by investors and customers alike sued me twice, sent a process server to my door at 6am on a saturday and tried to call me in for a deposition the afternoon of Christmas eve. They regularly win company culture awards and receive undeserved praise for being a place people can grow. I had a chance to grow from IC to VP and they did everything they could legally do to stop me.

The second, a publicly traded hosting company that has battled negative public perception for years had an EVP handle it wherein he basically said "sounds like you are leaving for a great opportunity. We wish you and your family well and you'll always be 'one of us.'"

The third company voluntarily and without my asking remover the non compete from my separation paperwork.

Non competes are a disaster and always will be. But how companies enforce them is the real culprit.

I have NEVER had a company balk at this when I do it. I tell them exactly why I'm removing it and why I will never agree to a contract that includes it.

I've never had any company bat an eyelid at this. They've all thought my reasons were perfectly fair and valid.

But don't have the gall to expect someone to sign a non-compete for a market wage.

You couldn't reasonably expect me as VP of a specific type of eCommerce company to not jump ship and go be the VP of a different type of eCommerce company.

For example: Would it be fair to prevent the CTO/CIO of Google jumping ship and going to be CTO/CIO of for argument's sake Facebook?

Both of these companies are technology companies in the advertising space, both have hugely different approaches and business models for their revenue streams.

Given the language of some of the non-compete clauses I routinely scrub out of contracts, a VP would be expected to sign away their right to be able to leave and still find a meaningful job in their field while there being little, if any, risk of damage to Google by this switch - I mean, aside from having to replace their CTO/CIO.

Would it be fair for me to jump ship from say Bluejeans knowing all their trade secrets that give them their edge in their specific market and running off to Skype and taking all that knowledge and putting up a product that directly takes business from Bluejeans? Well, probably not. I would say a non-compete for companies that could be considered direct competitors is absolutely fair.

Disclaimer: I picked arbitrary company names out of the air, I'm not meaning to insinuate these companies have any such language in their contracts.

This is a failure of our legal system. You can challenge a non compete in court and, depending on a few factors most heavily weighted towards if you can afford a good lawyer, you have a real shot at a win. However, this means you and only you are free from the shackles of this non compete.

Other people who signed a contract with this same exact illegal clause in it are still beholden to it, unless they have the resources to fight it (legal knowledge, time for a court battle, money to pay for lawyers). The threat of a lawsuit is enough to dissuade most people, who lack these resources, to back down from a winnable case.

Wouldn't it be more precise to say: "I've signed non competes" instead of having them?

There is no excuse for allowing less than 100% compensation, and that should include not just salary, but projected bonuses.

Well, you could take the American option where you're not allowed to work in that field, so you get 0% of your salary... (California excluded, if I understand correctly)

and i dont need a gofundme page in case someone in my family gets cancer ...

20 days if you work 5 days/week + holidays

16 days if you work 4 days/week + holidays

Sounds pretty smart to me.

Should one side be made happy when they have an unreasonable ask?

If companies do not want you to work for competitors, they should be paying your salary for that time. Employees still lose out on things like keeping their skills sharp through work, or career growth, but they are at least getting compensated for the job

When poliicians pass laws though, there are often unintended consequences. Good politicians will intentionally create loopholes out of humility, realizing that they don't understand the entire issue and how it will affect everyone.

If the loopholes are too big, then thr policy will be ineffective and they will either need to tighten the loophole later, or scrap the whole policy as unworkable.

Do you think the ban is ineffective? Are there hordes of unhappy German citizens drawing 60% of their salary because they are unable to find better work without violating the non-compete? And tons of greedy companies making zillions of euros by paying people to not work?

It literally is not a ban since it is allowed, and for less than the full compensation the employee would receive by working.

I am not discussing the efficacy as I haven't seen any numbers on how many non-competes are in effect in Germany. I am discussing the ethics of it

But for your argument to be complete I think you need at least some example of someone doing something unethical or wrong because of the policy. The policy exists today so hypothetical arguments fall a bit flat.

To illistrate my point, consider that it is legal (as far as I can tell -- not a lawyer) to walk around in California with a sword as long as it's neither concealed nor being brandished. But it doesn't make sense to argue that the lack of a law against carrying a sword is unethical because of what people might do. Theoretically people might do horrible things while carrying a sword; but empirically they do not, because few people even have swords, fewer still walk around with them, and approximately zero deaths result from it.

It is not a hypothetical situation, unless you are trying to claim that no company anywhere is using a non compete, in which case I just need to pull up the associated paperwork for pretty much every offer letter I've gotten. Alternatively I can go and poll just my social circle and compile the list of non competes.

Anything less than the full salary is unethical to me, and I'm partial to arguments that it should be more as the employee under the non compete is losing out on career growth and raises

They are also making that money while doing nothing.

They don't. They very specifically can not ask an employee to "give up their right to work", only in the US does that shit happen.

German law (and most european law around NCC in various fashion) requires that the NCC ne limited in time and not have "unreasonable clauses" e.g. can't prevent working in the field throughout the country.

As a result enforceable NCCs are extremely rare and only happen for actual business interest reasons, it's not a sword over the employee's head as it is in the US.

Also it's at least 50% of gross, so closer to 65~70% of net.

Not only is 100% not too much, but it’s the minimum that should be required. The cost of requiring a NCA should be high; that ensures they are only used when they are really worth it to the employer.

Exactly. So per the non-compete, you'd have to take a position where you are only 40% as valuable as you could be—and the 60% noncompete makes up the difference.

It's probably a bad deal for people who are extremely specialised and want to stay that way, but it'd be a pretty good deal for people like me, who love an excuse to learn something new.

If an honest engineer sees a problem which is exactly the same as one she solved at a previous company, and it is still the best solution, she will solve it in the same way. This has nothing to do with company secrets, it’s basic tradecraft. But it’s covered in many of these agreements. They’ve got to go, plain and simple.

(I was of course being a bit facetious with the 40% metric—real life isn't quite so simple—but saying the noncompete should have 100% compensation is silly. That would only make sense if your ability to work was being completely taken away)

For me the key word here is "most". I interpreted the previous comment as implying that previous employers should pay for the opportunity cost of you not maximizing your value.

Unless you are prevented from getting job that leverages _any_ of your previous experience...such as requiring a new career shift. In that case 100% compensation could be merited. Otherwise 100% is not likely to equal the opportunity cost to the employee.

If you don't choose to retire a year later, the year you sit out is costing you what you would have been making in the last year of your career.

To explain in more detail, starting with the year you return to a career job, your pay may be reduced by a differential representing one year less experience, for every year until the end of your career. You miss out on the pay for the year you didn't work, plus all the raises between years, and the one raise you never got, because your career was one year shorter. All that adds up to the pay you would have otherwise received in the last year of your career.

The problem is that 60% is not about making you whole. It’s about discouraging NCs in general.

You can sue but it's so expensive you probably won't and the company knows it.

That's funny, I've never had a job that was exactly like any of the other jobs I've had. Depending on how picky you are, I've never had a job that was even particularly similar to any of my previous ones.

I'm surprised to see such a narrow view about this issue on this forum.

The company was acquired, (and that in turn), when the new parent tried rolling out new contracts per employee, with a short turnaround to sign. Among other things, the new version basically would have prevented me from working in my field for a year.

I told them I needed time to have it reviewed by my lawyer, and I did too. Sure, the backlash had them rolling back the demand forthwith, but it convinced me that the ideal time to leave was immediately, under my old contract.

This forum oddly has some anti-labor sentiment. It is seen in this thread and also in threads related to unions, where the tone is quite obviously anti-union.

Me, I'm very anti-union in that I never want to be part of one, but OTOH, I fully support their right to exist as simply the collective extension to the individual members' right to bargain.

Personally, I won't negotiate for bonuses, or equity equivalent, though... just salary. I'm happy to use that time to invest in myself. It gets too complicated otherwise. I tend to negotiate for max salary anyway, as I don't trust bonuses or equity. YMMV.

I think I've only ever had one company actually pay me NC compensation, though. Usually they realise that they are paying for nothing and strike it from the contract.

That bullshit would not fly for a single second in germany. The NCC couldn't even prevent working for a direct competitor.

same in Italy. a contract that has no reciprocity is easily nullable hence non compete are separate from employment contracts and include a monetary compensation. they also have to be restricted in scope to actual competition (ie.e same customers or exact market), because you can't contract away the constitutional right to work from people.

there are some interesting side effects too: it's good for the employer because this allows non compete to extend longer than employment, and good it's for the employee because you get payed for all the time the non compete is valid even if no longer employed at the company.

(And I think it's unlikely that most people would choose to sit on their butts and collect their 60% salary, as opposed to taking that compensation and also finding a new job that doesn't directly compete with their old one. So the overall harm to society doesn't seem that severe.)

NC are antithetical to natural rights because they are slavery. If there is payment contingent on performance, than there isn't slavery. Given payment is required, firms that would ask for NC go way down.

Other place serf originally were peasants farming communal property who had they're rights taken away bit by bit over hundreds of years until they were bound to the land and had no rights.

Basically, "This NC is so burdensome I can't pay my mortgage if I obey it. I'm petitioning the court to release me from it and cease payment so I am not forced into foreclosure."

For example, you sell a business to someone who pays you a big premium for your goodwill value usually tied to the value of the customer base. It is entirely fair that, having taken the money in exchange for the sale of your goodwill interest, you not be able to turn around the day after the close and effectively steal it back from your buyer by setting up a competing business and conducting raids to get back your old customers. A reasonable restriction on your ability to compete in that case makes eminent sense and is not in any way unfair.

So too if you exit a professional practice and get bought out. Same principle. You get paid for the goodwill value and you should not be able to capitalize on the payment and simultaneously raid the goodwill of your former practice by competing against it. Fair and reasonable even though it restricts you in your livelihood.

Thus, even states like California, which basically ban the use of non-competes in an employment context, will fully enforce them in the situations noted above.

On the bad side, non-competes tend to operate unfairly and to burden ex-employees by preventing them from engaging in their normal livelihood even when they have been paid nothing for the privilege. Many jurisdictions do enforce them in that context and the only way to challenge them is to argue that they are unreasonably broad, which (if fought out) takes a tidy six-figure sum to prove in court.

So, yeah, all jurisdictions should adopt the California rule that largely bans non-competes in an employment context. But I don't see this happening anytime soon.

In the meantime, as an employee, you should try to avoid these if you can, negotiate to be paid for any non-compete if you have the leverage, or, if you have no choice, live with them as best you can until the law comes to a better place. As long as the law enforces them, you are sometimes just stuck.

During the sale the customer information and contacts can be (and by default usually are IIRC) considered an asset of the company, as such the seller reusing contacts can be considered a form of corporate espionage and can be prosecuted in that manner.

This holds just as clearly for departing employees, making unauthorized use of a company's assets after leaving a company is illegal whether it's sneaking in and using your old office or continuing to use contacts, just because in one of those cases the data might be in your phone doesn't change the legality.

But! This sort of corporate espionage is rather common and hard to prove. This brings us back to the commonly known point that sales people have a habit of ruining it for everyone else /s

No, employees don't get paid for "goodwill value" - whatever that means - they get paid for work they do in the course of their employment. If a company stands to lose if one of their employees changes jobs and works for a competitor, then the employer should be sure to give them generous raises and compensate them for the fair market value of their labor - not by relying on legal threats. I'm baffled by how widespread this belief that employees have some moral responsibility to sacrifice opportunities to the benefit of their current employer. Be a rational actor in the labor market, doing otherwise is an easy way to get taken advantage of.

The passage you quoted and replied to wasn't about employees, it was one of two examples GP raised to argue that that non-competes can make sense outside of an employment context.

> Thus, even states like California, which basically ban the use of non-competes in an employment context, will fully enforce them in the situations noted above.

If you get a fair compensation to end your job then a NC is justifiable.

Also, as an aside, a non-compete is not required to prevent corporate espionage, it's just easier to prove violation of. A lot of the sales teams worried about losing leads when team members departed could have pursued them with law suits focusing on the theft of corporate resources, it's regrettable non-competes have even gotten this far.

Exactly the goal, I'm sure, of the people writing up these agreements.

Skip the usual conferences for a year or two, fail to update linked-in in any meaningful way. Keep your mouth closed, and it becomes really hard for a company to toss cease and desist letters if they aren't even sure where your working. Going dark may not be a perfect defense, but lack of evidence makes it a lot harder.

- terms and conditions apply

For a large company, that's a small amount of money and a modest amount of time. For the normal employee, it's a lot of unexpected expense, a great deal of stress for months, and the risk of owing a shit-ton of money at the end of it.

If you really think there's no risk to ignoring non-competes, presumably you should be willing to guarantee the legal expenses for someone who wants to try. But my guess is that you won't offer.

The better solution to all of this is not to "ignore" the non compete risk, it is instead be to simply lie to your former employer.

What are they going to do? Hire a private investigator to track down all ex employees, to see if they have another job? Probably not.

It is pretty easy to get away with this stuff if an employee really feels like it.

That somebody has decent odds of getting away with something is only relevant if the punishment not terrible. But a 95% chance of not getting sued is not great if when you are sued it's $100k in expenses and two years of incredible stress.

Will some people do it anyhow? Sure. But most people won't, and that's what bullshit noncompetes are after.

Some parts of society can be really weird and distorting and I have no idea how we'd go about solving them.

Again this is super weird because the only thing that is an issue is giving a negative reference so a lack of a positive reference could be interpreted as a negative reference... thus, not giving everyone a positive reference should be a similar issue.

That entire law is sort of silly in most cases though, but the cases where it isn't (ex. a malicious boss for stupid reasons) are serious enough that I understand why it's around while being sad that we need it.

Companies are just copping out with hyper sensitive HR departments. I would give a glowing review but I am not afraid of detailing why someone else is an idiot and we canned him/her. I would even go so far as saying "you're making a mistake if you hire this person". I won't be sued, that fear just simply doesn't reflect reality.

Non-competes are illegal for physicians in my state, but I know of a case in which the clinic dragged the case out so much with various technicalities that eventually the Dr. settled. Now, in a subsequent case with a different defendant, lawyers are refusing to take the case for that reason. So the doctor in question is waiting for the non-compete to expire before retrying opening a private practice anywhere near their home again.

It's not enforceable legally, but they're doing so via other means.

A: No.

Q: $500,000?

A: No.

Q: $1m?

A: No.

Q: $10m?

A: Yes.

The point being... the problem is NOT non-competes. The problem is the exchange of value. They serve a useful purpose in support of business risk-taking and investment.

Make them fair, not unenforceable.

There's a myth that SV engineers can demand whatever they want and get it. No, they can't. If I get an offer for $200k, and that's actually my market value, and I demand another $100k for any reason whatsoever - I won't get them, period.

NCAs aren't legal in California, but if they were, and some smartass decided to demand another $100k cash to sign them, I guarantee he'd just get a pass, and someone less smartass would get the job instead.

I used "smartass" because it's a move that superficially seems clever, but is actually completely futile when you look at the broad picture - as my comment shows.

I don't know if us engineers have "low social status", but we certainly don't have as much negotiating power as some of us may fancy, certainly not against a huge mega-corporation.

The smart-ass part is signaling that you're less-abusable before the decision is made on hiring you.

The devious move would be to play dumb in the domain of HR paperwork, and delay signing anything. Just say you need to review it in private and make a copy, pocket the paper, and never give it back, or even bring it up again. Or mark up the document to completely pull its teeth, sign that, and turn it in with a stack of other paperwork. HR will probably just file it and tick their checkbox for it, without even flagging it for review by legal.

EDIT: fortunately, the company made a very niche product so it would be hard to argue anywhere was competing with them.

Smartass or not, if you are asked to sign anything that you are not allowed to show to a lawyer, the company is trying to abuse you, so feel free to mark it up a bit. Cross out single words that completely change the meaning of clauses that would put an obligation on you. Likely candidates are "not", "must", "shall", and "but". Write on it "This is not a contract" in small, hard-to-read print above your signature. Photograph it with your phone. Anonymously let other people know the company is doing this.

Chances are, if you asked any question at all about non-competes during the interview, you never would have made it to the empty room where they showed theirs to you.

- The legislature has to not care about laborers.

- The laborers can have no effective means of cartelizing amongst themselves.

- The businesses have to employ people who think it is okay to require uncompensated non-competes.

- They also have to be willing to sue ex-employees.

- The court/arbitration system has to side with the employer in some of the cases.

I did exactly that at a smallish company ~20 years ago. It actually worked, and caused quite a ruckus a few years later when they discovered it. At that point they didn't really have any leverage because I wasn't working for them.

I seriously doubt this would work anywhere that isn't 30-80 employees. Small enough to not have an completely automated HR system, but large enough for things to slip through the cracks.

This is why you show contracts to lawyers before signing. You have to avoid unnecessary warranties, contingent agreements, hidden addendums, and other traps for the unwary. The contract should be the whole agreement, and ideally should also say that it is the whole agreement.

Just cross that clause out with your pen, and if questioned, say that you haven't seen the documents they were trying to incorporate by reference. If they are contract terms, they can appear as clauses in the contract, and you should be able to negotiate reasonable compensation for them.

Few companies have ever tried such trickery with me, but then again they have operated almost entirely without lengthy contracts--basically, just starting date, starting rate of pay, and the "at will" clause. Those that did push documents at me early enough got to see my editing pen. But my smartass resistance to their dubious documents never got me to an offer or a real negotiation, either.

I am especially fond of crossing out the part of a background check clause that allows them to keep the 3rd-party report secret from me, while also sharing it with any other parties they please. Ordinarily, I'd just walk out, but I figure that crossing that part out puts the ball back in their court.

The thing is you don't have much way to negotiate this stuff with companies of a certain size. It's done by their lawyer and everyone gets the same stuff. Just changing we wording on the relocation and signing bonus (because the original wording made absolutely no sense in my case) took over a week of mailing stuff between lawyers and the headquarters in a different country. It's take it or leave it. Crossing stuff out with your pen or not handing in some documents might even get you sued for deception.

Sure this is different for small companies without a big HR department that is hiring on a daily basis and without complicated legal department processes. There is a good chance they just skip the NDA/NSA if you object (seen it happen), when they think you are the best man for the job.

These would not be an issue in the first place if we had a union, or a state legislature that cared about workers, or business managers with strong ethics. So many things already have to be going wrong for uncompensated non-competes to be common, that it hardly even matters what you do with them. If you really want/need the job, you just sign what they put in front of you, and then hope they don't find out when you inevitably reneg.

You could always add some words to your digital signature, like "this is not a contract", or "I refuse these terms", if that's the only way you could otherwise edit the document. If it's an automated system, it's likely that there is no human review until the documents are actually needed for some legal reason. By that time, you'll already have your money.

You could also try hacking the document system. The worst that could happen is that you don't get to work there. Second worst is that months or years into your new job, some HR person notices a discrepancy, and wants you to sign a fresh copy, or you're fired immediately. Try sending back a document that has lorem ipsum generated text or Markov chain text with the appropriate paragraph lengths? They're probably counting on you just clicking the buttons, maybe typing out your full legal name, and automatically filling the checkboxes with green checkmarks. Putting all of it into an automated system is already a means of cutting corners on legal paperwork. You can easily outsmart the computer, if there's no human helping it.

Nice idea. How do you do that in practice?

How does the judicial system decide what NCA is "fair"?

The cost of the NCA to the employee can be heavy. How do you "fairly" value it?

In reality you'll get what you have right now, where entire industries (and certainly entire companies) simply mandate NCAs in all their contracts and there's no way to remove it or get compensated for it. Don't like it? Decline the offer. Oh, and good luck getting an offer that doesn't require it - they all do.

> Nice idea. How do you do that in practice?

Require them to be reciprocal; if I am prohibited from working for anyone else but you in some kind of work for a set term, without your sign-off, then you are also prohibited from employing anyone else in that field, directly or indirectly, for the same term, without my sign-off.

Also, most employees move for a better opportunity, which often means a much better base comp + potential for much higher bonus. If I'm not going to be compensated for that, how is that "fair"?

Finally, my resume and likely my skillset will take a hit for sitting 1-2 years at home. Where's the compensation for that?

By making table stakes very expensive, the likelihood of companies even putting them into contracts will reduce to a small minority. The problem with non-competes right now is they are free and easy to put into contracts, and in practice the vast majority of employees do not refuse employment over it due to power asymmetry. They further more create chilling effects for employees to switch companies and thus make employees cheaper to hire due to the liquidity reduction.

The other objections you bring up you can negotiate for yourself :) . If they were willing to put up the table stakes, you're probably an important hire to put that in for and thus probably have negotiation power.

Yes, an insolvent company still exists.

If it is dissolved and it's interest in the NCA wasn't transferred (either because noone wanted it or it wasn't legally transferrable), then it doesn't matter, but mere insolvency isn't the same (in fact, if it can collect money for violations, insolvency may lead it to be more aggressive.)

> Who would enforce it?

The insolvent firm itself, which may be effectively run by (or for the benefit of) its creditors.

A friend of mine received two offers for almost the exact same compensation. One had a non-compete clause buried deep in the employment contract. Most candidates probably wouldn't even find it.

He asked what the non-compete means. They told him it's almost never enforced. As in, by the mere language, they could sue pretty much any employee who switched jobs.

So ask an independent lawyer to get an answer, right?

The lawyer told him it basically depends on the judge and the judicial climate if it ever goes to trial. Sometimes these cases get dismissed. Other times, the NCA is enforced.

Even if he wanted to negotiate, he couldn't. He doesn't know how much the clause is going to cost him. All the key information is missing, such as whether the company will actually sue, whether the "judicial climate" is right for the judge to side with the plaintiff or summarily dismiss the suit, etc.

It's the perfect example of "negotiations" being useless, especially for a weak uninformed party like a job candidate.

Ask for that, and if you ever get sued over it, well...the fees are covered...

I am quite thankful non-competes are unenforceable because I believe they (and much other contract legalese) are a soft form of classism that creates an unequal information state between the majority of employers and employees. The end result is that these sorts of inequalities distort the free market.

In general it's impossible to put a price on an unworkable concept. Attempting to do so just adds token compensation as a fictional justification for the existing problems.

Market based incentives only work if there's a clearing price.

[0] Or even higher if a new position would be a significant raise!

For some people, at some points in their lives/careers, a one year sabbatical at half salary is manna from the gods. For others, they were planning to shift towards a significantly different role anyway. For still others, it's a big speed bump in their careers and, anyway, how are they going to pay their mortgage and their kid's college?

I pointed out that a couple of the phrases in the contract, when combined, indicated they would have IP rights to EVERYTHING I did not just work they paid me for.

They moved on to another candidate.

IANAL but I really doubt that would be legal under german IR/IP laws.

Imagine, just shackling your primary economic labor force to an arbitrary plot of land and demanding taxes and work of them?! How ghastly.

Next thing you know, you'll be claiming right to their innovations in the advancement of farming technology. Ill have you know that I shall not be sharing MY designs for soil improvement through the addition of various rock powders and animal droppings for a greater yield in the annual barley production with this stingy, short-sighted lord. That's for sure.

And don't get me started on Johnson's idea about switching out the types of crops grown between plots. There is no way I am going to share THAT idea with a lord who limits MY ability to migrate between estates!

Edit: Added tags, just in case.

There's no force involved in either case - workers can choose not to work at a union shop, just like they can choose* not to work under a non-compete.

*Until it becomes impossible to find a place without a non-compete.

[0] https://en.wikipedia.org/wiki/Right-to-work_law

Because (at least pre-Hobby-Lobby) laws have historically prioritized the rights of individuals over the rights of corporations. An employer which compels their employees to join a union is signing away the rights of those employees, while an employee who signs a non-compete is only signing away their own rights.

If the employer has a mandatory unionization agreement, you can't negotiate with them to change the terms of that.

They say no such thing. They say that companies can't form agreements to exclusively hire union workers. They outlaw essentially non-competes in the opposite direction. A non-compete agreement binds a worker to exclusivity with a company. The agreements outlawed by right-to-work laws bind companies to exclusivity with a union.

If you are thinking of "closed shops", companies where the union has a security agreement with the company and the union is free to deny membership to a person (thereby denying them employment), those were deemed illegal everywhere under US federal labor law.

A worker can't be forced to join a union even in the presence of such an agreement. The company simply agreed not to hire them if they don't join.

Taken to its logical conclusion, this semantic distinction could be used to justify eliminating just about any worker protection currently on the books.

That is why they are called right to work laws, and this is why the parent is making that observation, as NCA's are antithetical to right to work.

Maybe trying reading in to things a bit more rather then jumping to the wrong conclusion?

No, they mean employees have a choice to join a union or not (ie. pay union dues or not.)

In other words, they're a legal tool to weaken unions by reducing their membership and revenue.

“To rely on a restrictive covenant in a contract of employment an employer needs to be able to show that it is designed to protect a legitimate business interest (e.g. goodwill or confidential information); and goes no further than is reasonably necessary to protect that interest.”

Any more than that and it is unenforceable.

Enforcement is in Employment Tribunals not courts where the burden of proof is largely on the employer.

He tried to start his own business so they sued him with a noncompete. They claimed thousands of dentists as their territory and the judge became angry with them but in the end the noncompete crippled his ability to make a living for years.

They actually did buy the business from the group who had brought them out, but it was a bit of a forced sale because there was no legal way for the group to stop them.

- California won't enforce noncompetes, except for a very limited set of circumstances (i.e. selling your business and then starting a competing business).[1]

- If you live and work in California, then you get the benefits of California law (including the noncompete law above), no matter what your employment agreement says. UNLESS you were represented by a lawyer during negotiations and you agreed to a different state's laws. NOTE: This section only applies to employment agreements entered into AFTER Jan 1, 2017.[2]

If your employer tries to pull a fast one and says you are subject to another state's laws, then you can invalidate that clause, and you can get your attorney's fees paid by the employer if you have to litigate it. [2]

[1] CA Business & Professions Code Section 16600-16602.5 Link here: https://leginfo.legislature.ca.gov/faces/codes_displaySectio.... Note: once you get to get to Section 16603, there are some super weird laws prohibiting bundling horror comic books. Aren't laws fun?

[2] CA Labor Code Section 925. https://leginfo.legislature.ca.gov/faces/codes_displaySectio....

So, let's say you're a database specialist picked up to tune someone's DB, part of the contract you sign (probably unwisely) states that you can't work tuning DBs for the next 6 months after signing. If, after two weeks at the job, layoffs happen and you're let go then it's likely that a judge would dismiss any enforcement of the non-compete.

But here's why this _is terrible_ either you need to secure a waiver of the non-compete from the company based on goodwill in advance (which the company has very little motivation of doing) or you could consult with a legal expert about the validity of the non-compete (for the cash monies) or you find a new job and hope no enforcement is attempted with the onus on you to defend your new employment if the company decides to pursue you (which they very rarely do)

So it's basically like pirating music in the 90s, there's a thousandth of a percent chance that some company is going to try to ruin your life over it, and if they try there's another thousandth of a percent chance they'll succeed. But if they do, it is _terrible_.

Perhaps you're exaggerating for effect, or perhaps you really don't understand the probabilities involved. But this is many orders of magnitude less likely than you getting killed by a meteor strike. E.g. something like [0] estimates a 10km meteor strike every 10 million years. That has (optimistically) a 50% survival rate for humans and you will live 50 more years, so 1 in 400,000 chance it gets you.

If you don't like the meteor calculation, you can look at the odds of, say, a murder in your area and both the judge and all the members of the jury are convinced you did it despite your alibi to the contrary. Maybe a million to one. Or, you know, something a thousand times more likely, like you get diagnosed with a rare untreatable form of cancer and have a year to live. Maybe 1000 to 1.

Either way, if that's what you think of your non-compete it's not worth worrying about.

[0] http://www.tulane.edu/~sanelson/Natural_Disasters/impacts.ht...

My intention was poorly portrayed but to try again, in all my years I've never known anyone who has been sued over a non-compete, a good chunk of those people have been software developers and most software developers sign non-competes these days, usually in overly broad topics (and I do know a bunch of people who have continued to work within the same relatively narrow industry).

Non-competes are nearly never enforced but their presence has a chilling effect, those of us aware of their unenforceablity and lack of attempts at enforcement generally waive off the consequences of signing them. People who are less familiar take them more seriously and they can have a real chilling effect, so their mere existence creates an imbalance in seeking future work.

But, yes, the chilling effect is much broader.

No, a thousandth of a percent = 1/100,000, which is more likely than the meteor or murder scenarios presented.

Also, if "some company" turns out to be Amazon or EMC, then it's not only higher than that, but certainty in some cases.

If (the venue was california in the contract)

Else if (the contract was based on laws that were similar enough to what the california legislature expressely legislated against or califonias judiciary addressed in prior case law)

Your employer may have standing in another states court and that court may find a way to establish jursidiction and sanction you according to the contract and its law

But a satellite office would almost certainly be considered a California-business and be actionable against.

Actually, America doesn't care much for free markets at all, which is why virtually all industries are monopolies or cartels.

Non-competes are protectionism for larger businesses over small/medium businesses and try to own employees skills that they may have brought to the company or client themselves.

As a freelancer, contractor and self-employed business owner/worker, please make these illegal, tired of these.

The worst part about non-competes is they are blanket protectionism usually and up to 2+ years of non-compete, this sometimes happens on a job that is only 1-3 months. You have to laugh at those types of situations. Usually the client will push them aside or lower the time to the job plus some time, but both non-competes and arbitration agreements are horrible for workers in today's economy where people change jobs frequently and many are self-employed/freelancing/contracting. NDAs are plenty enough to protect companies from clients and work done specifically for the projects.

After SCOTUS upheld arbitration agreements [1] I am worried if non-competes become fully legal which they are not in extreme cases except in California [2]. We need to move the way of California and make them null and illegal, it hasn't stopped innovation in CA and may be a big reason why so much innovation goes on in Cali.

The non-compete should not exist. At the core, removing competition from skilled workers in our economy is bad all around, unless you are one of the current big fish.

[1] https://www.nytimes.com/2018/05/21/business/supreme-court-up...

[2] https://www.nytimes.com/2017/05/13/business/noncompete-claus...

Legally speaking, reasonable refers to "The man on the Clapham omnibus" and is a standard test in many jurisdictions. It is NOT the same thing as the general use of the term in the English language. AT least in Great Britain and most Commonwealth countries.

https://en.wikipedia.org/wiki/Reasonable_person

In a place where non-compete agreements are not allowed, patenting ideas is a neat way to prevent your employees leaving and then doing the exact same thing for a competitor.

Where non-competes are allowed, patenting things is far less important, since employees won't be able to jump ship with your ideas easily.

Like other such laws the beneficiaries should be told to go fuck themselves as a matter of good management alone.

Sure, they didn't have a traditional non-compete as such, but they had layers of code of conducts and the like which basically made it a firing offense to do anything that wasn't effectively invisible. I turned them down for a number of reasons. But the general "your our slave, and you will suffer and regret doing anything outside of work" sure didn't help much. The idea that I might have to take down my github account, or fill out piles of paperwork to continue helping a non-profit I am involved in was just too much (combined with the fact that basically nothing was negotiable other than RSU's).

Source: I am ex-Bloomberg employee.

They are pointing to multiple economic studies based on natural experiments where the total prohibition of NCAs can be compared with their use under similar circumstances.

The studies strongly suggest that total repeal is better than permitting these contracts, and it's not obvious a simple modification would have the same results.

You might worry those studies are not representative of all the literature on this, or more work needs to be done, fine. But I don't think we can dismiss the argument as silly offhand.

The author makes at least a prima facie case.... Better than that, there's evidence supporting it from different contexts.

Do you see any negative consequences in states that have banned them almost entirely, such as California?

I know of one case (in which I am actually mostly sympathetic to the individual bound by the non-compete) in which that's actually exactly what happened.

We can all see why the company wants the clause, but it's equally clear that it's in society's interest to not allow it.

Reminder that the question was "what are good reasons...", which suggests that not everyone knows why the company wants them, unless you assume all companies are inherently evil which is not reasonable. They invest in their brand. Employees get the benefit of that to help establish their own brand. And then they can take that brand elsewhere to the detriment of the original investor.

There is a lot of research that suggests knowledge transfer among companies increases innovation but it's not clear how much non-competes retard that transfer in practice.

As a sidenote, Massachusetts finally put significant restrictions on non-competes over the past year or so.

Employers like it because it decreases employee job liquidity and thus brings down the price of hiring for almost nothing.

It's like not charging factories for the polluting smog they create as it floats over your house, but in this case, it's the general economy.

There was once a time when I would have happily signed an NC since the alternative was unemployment.