9 ms·
FTC cracks down on companies that impose harmful noncompete restrictions
- encryptluks2 4y agoSomething that may be worse than non-competes is arbitration clauses and jury waivers. Heck, most employment law is heavy-handed against the employee.
- blakesterz 4y agoFTC seems to be down right now, but The Archive has it already: http://web.archive.org/web/20230104170101/https://www.ftc.gov/news-events/news/press-releases/2023/01/ftc-cracks-down-companies-impose-harmful-noncompete-restrictions-thousands-workers http://web.archive.org/web/20230104170101/https://www.ftc.go...
- altairprime 4y agoOne paragraph halfway down has this information-dense summary: > In its complaints, the FTC said the restrictions constituted an unfair method of competition under Section 5 of the FTC Act. In each case, the FTC has ordered the companies to cease enforcing, threatening to enforce, or imposing noncompete restrictions on relevant workers. They also are required to notify all affected employees that they are no longer bound by the noncompete restrictions.
- dfcab 4y agoThank you
- TulliusCicero 4y agoWe really need general regulations on non-competes. Bare minimum, it should be required that a company pay you a full salary if they want to block you from seeking employment elsewhere with your skills. If a company really cares that much about stopping competitors from taking advantage of your skillset, they need to be willing to pay up.
- cma 4y agoThat still is anticompetitive.
- exabrial 4y agoMeh I dunno, I'd take it
- mcronce 4y agoI think that's why the "bare minimum" language was used: It's a lot better than the status quo, but doesn't go far enough.
- h0l0cube 4y agoThe competition could still poach the employee for more money, if they deemed them worth it. Which is plain old competition.
- TulliusCicero 4y agoWell, maybe, but in practice companies would only rarely use it, since they wouldn't want to pay for someone to not do work.
- dfcab 4y agoWhole heartedly agree.
- avsteele 4y agoThen how would a company protect it's trade secrets?
- charcircuit 4y agoUsing an NDA like everyone else.
- throwaway2847 4y agoAn NDA, same way they do now.
- 4y ago
- ProjectArcturis 4y agoIs there a place I could learn about non-compete law? I'm curious whether my existing NC could be enforced.
- vsskanth 4y agoIt varies state by state since there are different rules by each on what clauses in non competes can be enforced. Some states like CA and MA straight up ban them.
- optymizer 4y agoAre you sure non-competes are banned in MA? Do you have a source for that?
- wardedVibe 4y agoI was curious, and it looks like they made it hard to enforce, capped at a year, and require a garden pay (50%) period. https://www.upcounsel.com/non-compete-agreement-enforceability-massachusetts https://www.upcounsel.com/non-compete-agreement-enforceabili...
- optymizer 4y agoThanks for finding this out
- colechristensen 4y agoPay a lawyer for an hour.
- heavyset_go 4y agoTalk to a lawyer about it, IMO.
- hijinks 4y ago15 or so years ago I worked in a small company that specialized in wind predictions and was me and 10 meteorologists I remember them saying Accuweather is close to the main campus of Penn State which has a large meteorology program. They were saying if you joined accuweather and quit you couldn't work in any weather related field for 5 years after leaving accuweather. Basically the NDA locked you in and you were a prisoner.
- cyral 4y agoNot surprising from them. See this for more on their history: https://www.bloomberg.com/news/features/2018-06-14/trump-s-pick-to-lead-weather-agency-spent-30-years-fighting-it https://www.bloomberg.com/news/features/2018-06-14/trump-s-p...
- phantomathkg 4y agohttps://archive.is/OFGnD https://archive.is/OFGnD
- msrenee 4y agoSeriously? That's disappointing. They've been my go-to for years since most other (non-weather hobbiest) weather sites have become basically unusable due to ads.
- bongoman37 4y ago[dead]
- geebee 4y agoFor all its faults, California really got this one right. In some ways, this goes to show just how remarkably harmful non-competes are to the economy. If you make non-competes unenforceable, you can put all kinds of barriers up and still have a thriving tech industry (a high concentration of research universities didn't hurt either).
- themitigating 4y ago[flagged]
- urfullofsht 4y ago[flagged]
- dexterdog 4y agoThe cancer warning label thing is one. It's basically slapped on just about everything now so everybody either ignores it or blindly follows it and in both cases the law is not helping the consumer. It has also driven up the cost of producing goods which is passed on to the consumer because companies either avoid the cert and apply the label or go through the time and effort of getting the cert.
- nickff 4y agoThere’s no de jure recognized certification that I’m aware of; if you’ve seen one, I’d love to learn about it!
- analog31 4y agoFrom what I've read about Prop 65, it resulted in an actual reduction of toxic substances in products. The silly label was an unintended consequence, but is the only one that anybody has ever heard of.
- midoridensha 4y agoShitty housing/zoning policy causing absolutely insane housing prices.
- jefftk 4y agoThe largest one is https://en.wikipedia.org/wiki/San_Andreas_Fault https://en.wikipedia.org/wiki/San_Andreas_Fault
- i2shar 4y agoThe best kind of correct answer!
- CoolGuySteve 4y agoI wish federal law would just abolish non-competes completely. When I gave advanced notice to Tudor Investment that I would be quitting they threatened to fire me with cause so that they could still enforce the non-compete without paying me in accordance with NY state law. And they followed through with their threat, sending me a letter telling me I was being terminated with cause the day I officially quit. To make their shitty shenanigans worse, they made the unpaid non-compete just short enough so that it wouldn't be worth it to sue. The NY Department of Labor also doesn't handle complaints if you're salaried above a certain threshold. Don't ever work for Tudor Investment, they're two-faced assholes, but I shouldn't be telling you that when the government should.
- RhysU 4y ago> The NY Department of Labor also doesn't handle complaints if you're salaried above a certain threshold. Source?
- CoolGuySteve 4y agohttps://dol.ny.gov/system/files/documents/2021/03/ls223.2.pdf https://dol.ny.gov/system/files/documents/2021/03/ls223.2.pd... Labor Standards cannot accept every claim. Labor Standards will not accept claims if you: - Worked as an executive, administrative, or professional employee and earned over $900 per week
- llimos 4y agoThings like this are the best way to increase per-employee productivity in the economy, which has been flatlining. Another example could be tacitly encouraging holding multiple jobs. When the interests of employers conflict with the interests of overall economic productivity, government should lean towards the latter, instead of always taking the side of the employer. Let capitalism do what it does best.
- vsskanth 4y agoThis is a step in the right direction. However, I don’t know how much more the FTC can do on a case by case basis. I’m curious if the Supreme Court has taken up cases about non-competes and analyzed if they violate the constitution since they clearly block individual freedom to pursue a living.
- moate 4y agoI promise you, the current court would never make that ruling, and may feel that we give too FEW deferences to the logic of our very good corporate overlords.
- DrewADesign 4y agoI'm not clear on why those non-competes were illegal when others aren't. Any lawyers in here willing to shine their flashlight on the right rabbit hole for me to descend? (I do have some experience in legal research tools and documents by proxy as a developer, just no significant knowledge of law.)
- MBCook 4y agoSome levels of non-compete would be legal according to most people. If you work as a chef at my Mexican restaurant, it seems fair to bar you from opening another Mexican restaurant within say 1 mile. For a year. Simple, small, limited conditions to stop certain behaviors. As to why many industry/business non-competes are legal? There’s a good chance they may not be. But until taken to court we don’t really know. I’d be curious to know why these companies were chosen. Were they especially bad? Or just the companies they had the best evidence against?
- Conan_Kudo 4y ago> If you work as a chef at my Mexican restaurant, it seems fair to bar you from opening another Mexican restaurant within say 1 mile. For a year. I would argue that's not fair at all. Think about what you're saying: you're saying that your Mexican restaurant should effectively not have to worry about your competition providing a better job to your staff than what you offer. That changes the dynamic so that you don't have to worry about doing your best to retain your staff. This problem is the crux of why Silicon Valley is so successful (where you can't do this there) and tech hubs in other locations aren't anywhere close to as successful (where you can do this there).
- shukantpal 4y agoYou didn’t read the comment. It’s not about getting a job in a restaurant within 1 mile - but rather opening a restroom yourself in that radius.
- MBCook 4y ago
- webinvest 4y agoFrom the article: > “In its complaints, the FTC said the restrictions constituted an unfair method of competition under Section 5 of the FTC Act. In each case, the FTC has ordered the companies to cease enforcing, threatening to enforce, or imposing noncompete restrictions on relevant workers. They also are required to notify all affected employees that they are no longer bound by the noncompete restrictions.” Here is the full excerpt of section 5 as it currently stands in the United States Code as section 45 (15 U.S.C. § 45(a).) [Text in square brackets are my own]: §45. Unfair methods of competition unlawful; prevention by Commission (a) Declaration of unlawfulness; power to prohibit unfair practices; inapplicability to foreign trade (1) Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful. (2) The Commission is hereby empowered and directed to prevent persons, partnerships, or corporations, except […a dozen exceptions…], from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce. (3) This subsection shall not apply to unfair methods of competition involving commerce with foreign nations (other than import commerce) unless— […insert paragraphs of exceptions…]. If this subsection applies to such methods of competition only because of the operation of subparagraph (A)(ii) [“on export commerce with foreign nations, of a person engaged in such commerce in the United States”], this subsection shall apply to such conduct only for injury to export business in the United States. (4)(A) For purposes of subsection (a), the term "unfair or deceptive acts or practices" includes such acts or practices involving foreign commerce that— (i) cause or are likely to cause reasonably foreseeable injury within the United States; or (ii) involve material conduct occurring within the United States. (B) All remedies available to the Commission with respect to unfair and deceptive acts or practices shall be available for acts and practices described in this paragraph, including restitution to domestic or foreign victims. Notes: Why we are reading section (§) 45 of USC, not section 5: “Almost every provision of an act that is classified as a section of the Code is assigned a designation that differs from its act section number. For example, section 401 of the Social Security Act (act of August 14, 1935, chapter 531) is classified to section 601 of title 42. Most Code sections are based on an entire act section, but a few sections,[…], are based on less than an entire act section.” [3] Citations: [1] The Federal Trade Commission Act of 1914: https://www.govinfo.gov/content/pkg/COMPS-388/uslm/COMPS-388.xml https://www.govinfo.gov/content/pkg/COMPS-388/uslm/COMPS-388... [2] Current United States Code (of law): (15 U.S.C. § 45(a).) https://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prelim-title15-chapter2-subchapter1&edition=prelim https://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prel... [3] A guide to reading US Law https://uscode.house.gov/detailed_guide.xhtml https://uscode.house.gov/detailed_guide.xhtml
- topkai22 4y agoI worked for (and my wife still works for) a small company that provided a boutique set of engineering services. They had a non compete that was very narrowly tailored and called out by name the competitors that you couldn’t go work for directly (6 months or a year), all of which were also small companies. That sort of non-compete that seems reasonable to me- very specific, time limited, and only for people with actual trade knowledge. A good test is the number of openings a prohibition covers. The non-compete I signed covered maybe 30 openings nationwide in a good year, and zero in my local metro area.
- wpietri 4y agoWhy do you believe employers should be able to control who you work for when they're no longer paying you? One easy test for contract fairness I learned from my lawyer is, "Would it make sense if it were symmetric?" So, e.g., would your employer also agree not to go after clients that your next employer has? Or would they agree not to hire any engineers you consider competitive with yourself while you're there and for a year after you leave? My guess is no.
- challenger-derp 4y agoCan anyone shed light as to why the push for symmetric non-competes isn't a movement?
- wpietri 4y agoI think it's because most employees just have no interest in diminishing competition. And if they did, most don't have the bargaining power to make it happen. And that to me is what corporate non-competes are generally about: exercising power for gain, and nevermind who it hurts.
- brundolf 4y agoI think cases like this are super rare compared to the harmful cases, so it would still be a net gain for society Also- most of the reasonable cases for noncompetes are already covered by trade secret/NDA stuff
- kabdib 4y agoAbout 20 years ago I joined a large company in California, where non-compete clauses are essentially disallowed. A few years later, I moved to the company's offices in Washington State, where non-competes are allowed. Before the move I emailed HR and asked if I needed to sign the WA state employment agreement (with that non-compete clause) and they said "no". I saved that email. Forward a decade, I resigned to work for a competitor. That exit interview was fun. :-) [I was working on completely different stuff at the new company. I do take NDAs and trade secrets seriously].
- lotsofpulp 4y agoIt was sad to see WA leaders kowtow to Amazon and Microsoft and limit the non compete ban to those paid under $100k per year. Should have been copy pasted from California law.
- loeg 4y agoI worked remotely for a multi-state employer in the past. If I was a California employee on my last day, no non-compete. If I was a Washington employee, 1-2 year non-compete. I considered traveling to California to switch job locations and resign.
- rendaw 4y ago
- jmyeet 4y agoNoncompetes should 100% require full-paid gardening leave to be enforceable. You don't want me ot work for a competitor for a year? Great. You get to pay me full pay and benefits for that year. Let's see how keen companies are to enforce a noncompete then. Even then they should be limited in scope but without paid gardening leave they should be utterly unenforceable.
- steveBK123 4y agoPaid noncompete (gardening leave) is pretty common on Wall Street. It has gotten much more prevalent in the last 5-10 years, with companies ratcheting up the length and enforcing it on lower and lower level employees. Think - IC software engineers working on some random UI with no idea of current positions or trading strategies, making like $300k total being put on a 12 month leave. The problem even with paid noncompetes is that you are only getting your salary, not bonus and in the roles it is enforced, salary kind of caps out and bonus ends up being 25%.. 50%.. 75%+ of your income. Some firms have started to enforce garden leaves long enough that you are guaranteed to miss at least one, if not two bonus cycles. Additionally, your health care coverage is revoked at most of these companies during your gardening leave so you have to decide whether to go without, take COBRA, or hope you are on your spouses plan already. Finally, the terms of the contract are generally asymmetric. Your employer has the right to waive the garden leave, but you do not. So you don't know if you are getting a few months paid time off until the day you resign. For legal reasons most companies won't make an offer deal with you and give you a deal like "if you can get out of your garden leave at old job and start here earlier, we'll let you take a month off paid by us before you start" as it is solicitation. That said - 3 month garden leave over the summer is awesome.
- genocidicbunny 4y ago> The problem even with paid noncompetes is that you are only getting your salary, not bonus and in the roles it is enforced, salary kind of caps out and bonus ends up being 25%.. 50%.. 75%+ of your income. Which is why they should be required to pay your TC+xx%, including any costs you may incur for things like health insurance, not just your salary.
- milofeynman 4y agoWill they do it with hospitals?
- spritefs 4y agoJust curious, but how would your employer find out who you're working for when you go somewhere else?
- quadrifoliate 4y agoThey "cracked down" on...two glass manufacturers and a security firm? Posting this on the website and claiming that it constitutes "vigorous enforcement" shows just how ineffective these underfunded Government agencies typically are. They rarely choose to go after large companies, who can keep flouting regulations with impunity. Smells like an Abacus Federal Savings Bank [1]. ---------------------------------------- [1] https://en.wikipedia.org/wiki/Abacus_Federal_Savings_Bank https://en.wikipedia.org/wiki/Abacus_Federal_Savings_Bank
- deleted 4y ago[deleted]
- ravel-bar-foo 4y agoWhat's really interesting about this is that the FTC is now considering labor to be a market in which anti-trust rules apply. That is a development of the past two years.
- therealcamino 4y agoIANAL and this was the DOJ not the FTC, so maybe there's some context I'm not getting, but the Apple/Google/Adobe/Intel/Intuit/Pixar no-poaching settlement was in 2010: https://www.justice.gov/opa/pr/justice-department-requires-six-high-tech-companies-stop-entering-anticompetitive-employee https://www.justice.gov/opa/pr/justice-department-requires-s...
- 6451937099 4y ago[dead]