8 ms·

This seems incredibly important. I know non-compete rules personally held me back at a previous tech job. I'm interested to see how this hits finance firms – I

• kevstev 2y ago
  I was subject to one as well, but it was just on my base, not total comp, which was not the majority of my compensation. And while my base was fine, it was more or less explicitly stated that this was meant to make it painful for employees to leave and had almost zero to do with any special information the employee had.
  • lokar 2y ago
    They have other tricks. My comp was about 80% bonus, most of which went into deferred comp for a few years. If I was to go to a competitor without permission (independent of the non compete) I would forfeit the deferred comp.
    • 0xbadcafebee 2y ago
      Reject the handcuffs. Once enough people do, they will stop making it deferred. They know that if you're willing to reject the money, you're willing to leave (the handcuffs aren't keeping you there), and that scares them.
      • anon84873628 2y ago
        That's called a multi-agent coordination problem and game theory tells us it is not so simple to solve.
        • 0xbadcafebee 2y ago
          I don't know about game theory, but a few of us did it at one company and they changed their policy.
    • lifeisstillgood 2y ago
      But at a certain point that deferred comp is “enough” that if you just go to work each day and hide in the loos it’s worth waiting around and collecting the cash. And the company won’t benefit from a mostly checked out workforce
      • lokar 2y ago
        Worse. The next employer will just repay you. They all do this, so no one really gets and advantage, but they all pay.
      • CydeWeys 2y ago
        The bar is quite high at these kinds of companies. If you let off the gas and try to coast like that, you'll just get fired and thus lose the deferred comp that way.
  • jbullock35 2y ago
    I'm not sure that I understand. What does it mean for a noncompete to apply only to base compensation? Is the idea that if you join a competing company within X months of leaving your old company, you need to repay your base salary to the old company?
    • o_nate 2y ago
      No, it just means that during the period after you stop working at the old job but before you can start working at the new job, you are paid only your base. This can be a significant reduction in total comp in industries such as finance.
      • bluGill 2y ago
        I have worked jobs where the best bonus over 5 years was $500, while the typical year all we got was a promise that if things go well there will be a bonus. I've worked other jobs where the worst bonus was $15000 (a really bad year for the company), and could be up to $50,000. This is as a regular engineer, management can get a lot more. The first company taught me at until the money is in my account the bonus is meaningless. The second taught me that they aren't just a rumor. Most companies don't even pretend to offer a bonus which is acceptable - at least I know what I will make. I think everyone should make 2-3x the poverty level income (we can debate exact numbers), and everything after that is bonus. So long as the company pays a bonus most years it means in a bad year you have enough to live on and don't need to find a new job, while in a good year you have a nice bonus to buy nice toys.
        • emidln 2y ago
          In finance, it's common to see a base of 150,000 and a VR of between 300k and 750k for engineers. During garden leave, you get paid your $150,000 as part of payroll, but are ineligble for VR. Your total comp goes from 450,000 (in mediocre years) or 900,000 (in good years) to 150,000 for whatever your non-compete period is (6 months, 12 months, 24 months are all common).
          • 2y ago
• AlotOfReading 2y ago
  It's worth noting that the so-called "garden leave" you're describing usually doesn't come with things like bonuses. That may even be a majority of your compensation depending on the role.
  • deleted 2y ago
    [deleted]
• coldpie 2y ago
  > I know non-compete rules personally held me back at a previous tech job. Yeah. Remember this when you go to vote in November. Elections matter.
  • cryptonector 2y ago
    Is this rule a partisan issue?
    • lotsofpulp 2y ago
      I have yet to see a Republican led government advance banning of non competes (or really anything that benefits W-2 workers as a whole) in the last 25 years. Washington (Democrat led), I think, most recently passed a non compete ban for those under a certain salary, but I cannot think of any Republican led states that have advanced such legislation, or espoused views that they want to. It falls in line with similar worker friendly legislation passed by Democrat led states such as longer family leave, paid sick and family leave, higher unemployment benefits, higher minimum wages and minimum salaries for exempt workers, eliminating non tipped minimum wages, and publishing of salary ranges on job listings. Edit to respond to below: Is it partisan in California? If anything, I would have thought the California non compete ban is the most un-partisan issue since it has been in place since 1872, so neither of today's parties would be credited with it.
      • cryptonector 2y ago
        I've yet to see this be a partisan issue anywhere.
        • ImPostingOnHN 2y ago
          If support is along party lines, that makes it a partisan issue.
    • CharlieDigital 2y ago
      Tends to be because it's ostensibly pro-labor and one party tends to favor pro-labor policies and the other tends to favor pro-business policies.
• aidenn0 2y ago
  I personally believe that lack of non-competes was one ingredient for Silicon Valley becoming what it is.
  • gpderetta 2y ago
    It was! https://en.wikipedia.org/wiki/Traitorous_eight https://en.wikipedia.org/wiki/Traitorous_eight
• MiddleEndian 2y ago
  >I know people who were forced to take a year off between jobs (although they were compensated the whole time). Always thought that would be a pretty sweet deal. If a company wants to pay someone not to work for a year, they're free to do that whenever they want. Maybe without noncompetes, they'll have to pay more to make it worth it for the guy being paid to sit around!
  • cryptonector 2y ago
    We'll have to see what the finance industry does. My guess is that they will only make sizeable counter-offers to key employees, and the employees will not be forced to accept them and typically won't. In the long run there might not even be sizeable counter-offers to key employees. EDIT: Er, the FTC explicitly does not comment on garden leave: > With respect to garden leave agreements, as noted previously, commenters used the term “garden leave” to refer to a wide variety of agreements. The Commission declines to opine on how the definition of non-compete clause in § 910.1 would apply in every potential factual scenario. However, the Commission notes that an agreement whereby the worker is still employed and receiving the same total annual compensation and benefits on a pro rata basis would not be a non-compete clause under the definition,350 because such an agreement is not a post-employment restriction. Instead, the worker continues to be employed, even though the worker’s job duties or access to colleagues or the workplace may be significantly or entirely curtailed. Furthermore, where a worker does not meet a condition to earn a particular aspect of their expected compensation, like a prerequisite for a bonus, the Commission would still consider the arrangement “garden leave” that is not a non-compete clause under this final rule even if the employer did not pay the bonus or other expected compensation. Similarly, a severance agreement that imposes no restrictions on where the worker may work following the employment associated with the severance agreement is not a non-compete clause under § 910.1, because it does not impose a post-employment restriction. My guess is that garden leave will be offered, but in right-to-work states there will be no way to enforce that the employee remains employed.
• andthenzen 2y ago
  Page 83-84 provides some guidance on garden leave and suggests that it will still be allowed under the new rule: > With respect to garden leave agreements, as noted previously, commenters used the term “garden leave” to refer to a wide variety of agreements. The Commission declines to opine on how the definition of non-compete clause in § 910.1 would apply in every potential factual scenario. However, the Commission notes that an agreement whereby the worker is still employed and receiving the same total annual compensation and benefits on a pro rata basis would not be a non-compete clause under the definition, because such an agreement is not a post-employment restriction. Instead, the worker continues to be employed, even though the worker’s job duties or access to colleagues or the workplace may be significantly or entirely curtailed. Furthermore, where a worker does not meet a condition to earn a particular aspect of their expected compensation, like a prerequisite for a bonus, the Commission would still consider the arrangement “garden leave” that is not a non-compete clause under this final rule even if the employer did not pay the bonus or other expected compensation. Similarly, a severance agreement that imposes no restrictions on where the worker may work following the employment associated with the severance agreement is not a non-compete clause under § 910.1, because it does not impose a post-employment restriction.
  • zippothrowaway 2y ago
    Doesn't this mean the end of 'at-will' for anyone that a company wants to cover with a non-compete? At present a company can have their cake and eat it, giving you one day notice of end of employment but then enforcing a non-compete for x months. If this survives the Supreme Court, wouldn't a company would have to put in your employment contract that you/they must give x months notice to end employment if they wanted to restrict you? Otherwise you could give one days notice and they wouldn't be able to put you on gardening leave.
    • viraptor 2y ago
      The gardening leave still works as long as it's beneficial to both parties. The employee gets an effective long, paid holiday and the company gets a non-complete equivalent. Now they have to really ensure that pay is worth more than changing the employer though. It's less "end of at-will" and more "if you want effective non-competes, it's going to cost you".
• yyhhsj0521 2y ago
  I am currently on one of those deals by working for an HFT, then taking a competitor's offer. It is really very nice. From a wealth-accumulation POV, I am losing out a lot of earning each month I'm not working, but I am still paid a very cushy six-figure salary that covers a comfortable lifestyle for my family plus decent savings. I value my time at prime working age much more than the net worth I potentially lost. I have been able to travel, hone hobbies, start and finish personal projects, just help out my wife, and much more. Honestly I don't want it to end.
  • michtzik 2y ago
    How does health insurance coverage work during the garden leave period?
    • yyhhsj0521 2y ago
      There is the option to COBRA. I just switched to be on my wife's insurance.
      • octopoc 2y ago
        In my (limited) experience, COBRA is far, far more expensive than buying on healthcare.gov.
        • angoragoats 2y ago
          COBRA just means that you’re continuing whatever plan you had under your employer, at full cost to you (vs. the employer presumably subsidizing some of the cost while you’re employed by them). The amount you pay is entirely dependent on the plan(s) your employer has chosen to provide its employees. For me, the full cost of my current employer’s health plan is about $1800/month, and a comparable plan from the healthcare exchange is $2200-3000, depending on the plan. So if I were to lose my job, it’d be significantly cheaper for me to use COBRA than get a plan from the exchange.
    • plyp 2y ago
• bagels 2y ago
  I was denied a job I was well qualified for because, (paraphrased, besides the quoted part): Our CEO and your CEO have a "gentleman's agreement" not to hire people that work at eachother's company. I have no idea why the recruiter was willing to put this in writing, and thankfully, I was able to find other work instead. I know it's not a non-compete, but there are other ways that companies can illegally form cartels to suppress labor.
  • whaleofatw2022 2y ago
    I saw this happen to a colleague in the fiber industry, it is very back room dealy.
  • scheme271 2y ago
    That got Google, Apple, Adobe and a few other companies in a lot of trouble because they all agreed not to recruit each other's employees.
    • bugglebeetle 2y ago
      It got them a slap on the wrist and a nothing fine for years of depressing wages. No one went to jail and the head of HR at Google during this period also got a book deal.
  • adastra22 2y ago
    > I have no idea why the recruiter was willing to put this in writing You passed on a juicy class action lawsuit.
    • bagels 2y ago
      I'm not a lawyer, so I wouldn't make any money. I know it's a common refrain, but look at what happened with the Google & Apple class action. Those folks got less than $6,000 each for what must have been hundreds of thousands in damages each. It's also career limiting to be the person that sued their employer. I didn't have any monetary damages, as I was able to find alternatives.
• wnmurphy 2y ago
  Yes, this is a huge win for labor from a very pro-labor administration.
• anal_reactor 2y ago
  I'm wondering whether EU will decide to adopt similar laws