Current Events > Non-compete clauses are spreading, hurting Americans' ability to get a raise

(+) Yeah! (+)

https://www.nytimes.com/2017/05/13/business/noncompete-clauses.html

The growth of noncompete agreements is part of a broad shift in which companies assert ownership over work experience as well as work. A recent survey by economists including Evan Starr, a management professor at the University of Maryland, showed that about one in five employees was bound by a noncompete clause in 2014.

Employment lawyers say their use has exploded. Russell Beck, a partner at the Boston law firm Beck Reed Riden who does an annual survey of noncompete litigation, said the most recent data showed that noncompete and trade-secret lawsuits had roughly tripled since 2000.

“Companies of all sorts use them for people at all levels,” he said. “That’s a change.”

Employment lawyers know this, but workers are often astonished to learn that they’ve signed away their right to leave for a competitor. Timothy Gonzalez, an hourly laborer who shoveled dirt for a fast-food-level wage, was sued after leaving one environmental drilling company for another. Phillip Barone, a midlevel salesman and Air Force veteran, was let go from his job after his old company sent a cease-and-desist letter saying he had signed a noncompete.
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Alan B. Krueger, a Princeton economics professor who was chairman of President Barack Obama’s Council of Economic Advisers, recently described noncompetes and other restrictive employment contracts — along with outright collusion — as part of a “rigged” labor market in which employers “act to prevent the forces of competition.”

By giving companies huge power to dictate where and for whom their employees can work next, noncompetes take a person’s greatest professional assets — years of hard work and earned skills — and turn them into a liability.

“It’s one thing to have a bump in the road and be in between jobs for a little while; it’s another thing to be prevented from doing the only thing you know how to do,” said Max Burton Wahrhaftig, an arborist in Doylestown, Pa., who in 2013 was threatened by his former employer after leaving for a better-paying job with a rival tree service. He was able to avoid a full-blown lawsuit.

Noncompetes are but one factor atop a great mountain of challenges making it harder for employees to get ahead. Globalization and automation have put American workers in competition with overseas labor and machines. The rise of contract employment has made it harder to find a steady job. The decline of unions has made it tougher to negotiate.

But the move to tie workers down with noncompete agreements falls in line with the decades-long trend in which their mobility and bargaining power has steadily declined, and with it their share of company earnings.

When a noncompete agreement is litigated to the letter, a worker can be barred or ousted from a new job by court order. Even if that never happens, the threat alone can create a chilling effect that reduces wages throughout the work force.

“People can’t negotiate when their company knows they won’t leave,” said Sandra E. Black, an economics professor at the University of Texas at Austin.
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Companies have always owned their employees’ labor, but today’s employment contracts often cover general knowledge as well. In addition to noncompete clauses, there are nonsolicitation and nondealing agreements, which prevent employees from calling or servicing customers they have worked with in the past. There are nonpoaching agreements that prevent employees from trying to recruit old colleagues.

Put it all together, and suddenly some of the main avenues for finding a better-paying job — taking a promotion with a competitor, being recruited by an old colleague — are cut off.

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Just another way capitalism has doomed people to suffer while the rich get richer
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Yeah this shit needs to be made illegal.

This is a problem everywhere, not just America
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I had to sign one of those... I was extremely hesitant, but I had no other recourse at the time. If I recall correctly, it had a stipulation like restricting me from working within 100 miles or some similarly outrageous distance of the company's client base which essentially prevents me from obtaining a similar job with another company in this state.

I am sure glorious job creator Trump will fix this.
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Just read the title, but hell yeah non-compete clause is total bullshit.

Non-disclosure of company trade secrets should be enough.

Non-compete agreement makes it so the company owns you, and does t leave you with any alternative or even a viable option to leave the company.
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Nomadic View posted...

Just read the title, but hell yeah non-compete clause is total bullshit.

Non-disclosure of company trade secrets should be enough.

Non-compete agreement makes it so the company owns you, and does t leave you with any alternative or even a viable option to leave the company.

The real problem with it is it basically removes any negotiating floor an employee has.

I thought these were supposed to be unenforceable and were just used as reasons to fire you if you got caught looking for a new job.
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I had to sign one for my previous job but it wasn't very restrictive. It basically said that I couldn't work for another company that provided the same services (IT Consulting). The ban is for a year I believe. However I can do my line of work for any industry so it didn't really affect me.
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I was once involved in a lawsuit in which a no compete clause prevented a worker from ever working in any computer-related job. The clause didn't specify a time and didn't specify a place, and the employer acted as if it was an eternal clause and applied all over the world. The court found that the clause was illegal and non applicable.

It was a bit ridiculous TBH
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This is why I work for myself, Ive walked out of multiple jobs when theyve tried to pull some bullshit on me. At my last job our boss said he had 100 applications to replace every one of us so I walked out, the job before that I told him I couldnt work a specific Saturday, when it came he tried to force me to work and I quit. When he threatened not to pay me I threatened him back and he did in fact pay me.

You gotta stand up for yourself or youll get run over.
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ChromaticAngel posted...

I thought these were supposed to be unenforceable and were just used as reasons to fire you if you got caught looking for a new job.

They are entirely enforceable. I violated mine, and my old company threatened to sue me. I spoke to a lawyer that told me that they are enforceable, but in the end my old employer simply didn't bother with it.
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Nomadic View posted...

ChromaticAngel posted...

I thought these were supposed to be unenforceable and were just used as reasons to fire you if you got caught looking for a new job.

They are entirely enforceable. I violated mine, and my old company threatened to sue me. I spoke to a lawyer that told me that they are enforceable, but in the end my old employer simply didn't bother with it.

Is it common for them to go through with it or is it a scare tactic? I cant imagine its worth the legal fees or bad press.
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I think it's mostly there to use against the higher-ups. Though if they really wanted to go through the hassle they could have sued me for it. Typically when people left the company they did so one at a time, but when I left there was about 10 other people that left too, all to go to the same company. I think that is what really set my old company off though. In the end my old company never did file suit though.
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ChromaticAngel posted...

I thought these were supposed to be unenforceable and were just used as reasons to fire you if you got caught looking for a new job.

It depends on the clause, job, and state. The copy/paste part of this article says that there was more litigation involving these clauses but doesn't discuss how that litigation was resolved. IIRC most courts won't enforce a non-compete that is overly restrictive unless there is a decent reason to do it. If you work in an area where you are dealing with trade secret or privileged business information there may be more of a case for it.

Also, its expensive for a company to try to enforce, and usually not worth it to try because in most cases it would look worse for the company than the employee.
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noncompetes have a purpose

my wife is a proposal manager and actually aware of trade secrets because they are written in to the proposals she edits

i am a propulsion engineer and am aware of classified information and trade secrets of the companies making weapons whose work I analyze for my employer

we both make great money as-is.

the use of noncompetes on laborers and other low-level employees is sickening, and clearly is an attempt by capital owners to get ahead of the growing skills shortage and the compensation increases that shortage will force. it should not be legal to force employees to sign noncompetes without a good reason
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Even if they can't be enforced, they should be illegal anyway. Finding another job shouldn't be turned into a fucking divorce proceeding.

Darkman124 posted...

noncompetes have a purpose

my wife is a proposal manager and actually aware of trade secrets because they are written in to the proposals she edits

i am a propulsion engineer and am aware of classified information and trade secrets of the companies making weapons whose work I analyze for my employer

Honestly just building a relationship of trust with your employees would be better than bringing in lawyers to threaten them. Because you can still discreetly leak that info anyway. You're really just telling your employees, "When you do leak these trade secrets, just make sure it's anonymous so I can't sue you"

Anyone not at an executive level or dealing with classified information shouldn't ever be forced to sign a non-compete clause.
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For the most part, if you are a low-level employee at a company, you can pretty much ignore these. They're not worth the cost to enforce, and your knowledge is not valuable enough to sue over. By the time they are worth the cost of an employer to litigate, you will also be in a position to negotiate them along with your employment terms.
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The Admiral posted...

For the most part, if you are a low-level at a company, you can pretty much ignore these. They're not worth the cost to enforce, and your knowledge is not valuable enough to sue over.

Generally ignoring legal agreements you made and just assuming that everything will be OK if you break them is a pretty stupid idea

I work for a place that made me sign one.

Granted, they can't actually prevent you from switching to a competitor, but benefits like a pension might be at risk. You should avoid telling anyone from qorn if you do switch and obviously don't ask for a reference.
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Darkman124 posted...

noncompetes have a purpose

my wife is a proposal manager and actually aware of trade secrets because they are written in to the proposals she edits

i am a propulsion engineer and am aware of classified information and trade secrets of the companies making weapons whose work I analyze for my employer

we both make great money as-is.

the use of noncompetes on laborers and other low-level employees is sickening, and clearly is an attempt by capital owners to get ahead of the growing skills shortage and the compensation increases that shortage will force. it should not be legal to force employees to sign noncompetes without a good reason

I don't think you're differentiating between non-competes and non-disclosure agreements. Non-compete just means they're marking their territory on you and you can't work for any of their competitors, even if you preserve their trade secrets.

The Admiral posted...

For the most part, if you are a low-level employee at a company, you can pretty much ignore these. They're not worth the cost to enforce, and your knowledge is not valuable enough to sue over. By the time they are worth the cost of an employer to litigate, you will also be in a position to negotiate them along with your employment terms.

If you're applying​ for a new job, aren't they the ones that ask if you have a NDA or non compete? If so, If you lie about that, you'd be risking getting fired if they eventually hire you
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Nomadic View posted...

ChromaticAngel posted...

I thought these were supposed to be unenforceable and were just used as reasons to fire you if you got caught looking for a new job.

They are entirely enforceable. I violated mine, and my old company threatened to sue me. I spoke to a lawyer that told me that they are enforceable, but in the end my old employer simply didn't bother with it.

How did your old employer find out where you were working?
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Capitalism at work.
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I love how all the dum-dums are coming in complaining about the effects of "capitalism" when a non-compete is the exact opposite of what capitalism is. Commies sure are not very smart.

Fun Fact: I personally know and constantly play games with the guy in the 2nd pic.
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Another amazing benefit of putting money before people.
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wah_wah_wah posted...

Yeah this shit needs to be made illegal.

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Paper_Okami posted...

Capitalism at work.

This is actually anti-capitalist. It's was done primarily to help smaller companies compete with larger ones, since larger companies could just hire away employees, steal the new competitor's trade secrets, and put them out of business.

I agree it's nonsense to have non-competes for low-level employees in many cases, but courts have consistently ruled in favor of employees when these have been litigated, especially in states like NY and CA. In general, overly broad, onerous, or lengthy non-competes are not enforceable. But not wanting you to run off to a competitor and cause damage to the business you're leaving is not unreasonable.
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The Admiral posted...

Paper_Okami posted...

Capitalism at work.

This is actually anti-capitalist. It's was done primarily to help smaller companies compete with larger ones, since larger companies could just hire away employees, steal the new competitor's trade secrets, and put them out of business.

I agree it's nonsense to have non-competes for low-level employees in many cases, but courts have consistently ruled in favor of employees when these have been litigated, especially in states like NY and CA. In general, overly broad, onerous, or lengthy non-competes are not enforceable. But not wanting you to run off to a competitor and cause damage to the business you're leaving is not.

I feel like it's actually fine to have them for local businesses competing with other local businesses. Like, I shouldn't be able to quit my job for Frank's Plumbing to go work at Jack's Plumbing across the street after learning a bunch of shit at Frank's Plumbing. That's bullshit and employee dishonesty.

But I should be allowed to get a job at Dan's Plumbing that is 3 counties over, or in a different state, or go work for some other related place like Kohler. Non-Competes IMO should have a specific explanation as to how it specifically impacts their business and if the competition in question doesn't meet that criteria it shouldn't be considered covered under the non-compete.
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booboy posted...

Anyone not at an executive level or dealing with classified information shouldn't ever be forced to sign a non-compete clause.

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BTW, The Admiral is actually completely right on the law here. It seems like the difference here is whether these agreements should be put in contracts for low level employees and then invalidated through expensive legal action that leaves the employee in a very disadvantageous position due to an unnecessary and exploitative provision. Or if employers should just stop squeezing their employees in yet another way.
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E32005 posted...

wah_wah_wah posted...

Yeah this shit needs to be made illegal.

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legendary_zell posted...

BTW, The Admiral is actually completely right on the law here. It seems like the difference here is whether these agreements should be put in contracts for low level employees and then invalidated through expensive legal action that leaves the employee in a very disadvantageous position due to an unnecessary and exploitative provision. Or if employers should just stop squeezing their employees in yet another way.

Beyond what the law has to say about it (I think such tactics should be illegal) once a company starts litigating all of their workforce problems, they are in a bad spot and their problems with their employees become self-fulfilled.

ChromaticAngel posted...

I feel like it's actually fine to have them for local businesses competing with other local businesses. Like, I shouldn't be able to quit my job for Frank's Plumbing to go work at Jack's Plumbing across the street after learning a bunch of s*** at Frank's Plumbing. That's bulls*** and employee dishonesty.

Generally employees don't want to leave unless you treat them like shit. It's kind of a risk to change jobs like that but if you have an asshole boss that thinks you owe him something and constantly hen pecks you about it and overworks you, then suddenly that risk becomes worth taking.