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Businesses The Almighty Buck

Non-Compete Pacts Called Bad For Tech Innovation 190

Posted by kdawson
from the we-know-we-know dept.
carusoj writes in with NetworkWorld reporting from a panel at Harvard last week. It concluded that employee non-compete agreements have stifled tech startup development in Massachusetts, where the pacts are aggressively enforced, but failed to hold back the tech industry boom in states like California, where they are mostly unenforceable. We've discussed non-competes often here in the past; Techdirt made much the same point a year and a half back.
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Non-Compete Pacts Called Bad For Tech Innovation

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  • Innovation is incremental and people are collaborative. Whenever you stifle that collaboration, the economy as a whole suffers...

    • by Anonymous Coward on Sunday June 22, 2008 @06:46PM (#23897877)

      Exactly! And no industry is quite so guilty as games and entertainments I think. They are actively destroying the lifeblood on which they thrive. Take an industry that absolutely depends on pushing the boundaries and cultivating the brightest and most talented. Tie up the practicioners in chilling NDAs and wicked intellectual property landgrabs. Get them to sign non-compete agreements to turn their careers into cul-de-sacs. Make sure they isolate themselves in a monoculture. Ensure you're using arcane, expensive proprietry tools that students and educators don't have access to. Make sure the people who've paid for access to the inner circle are too selfish or fearful to engage outside. Work against standards that would create portable skillsets. Abuse the patent system to breed anti-commerce knowledge monopolies. Reduce the image of the industry to something you "break into". Spit on the ideals of a professional meritocracy by putting work out to unpaid spec, so those with the self respect to value their work get passed over. Replace fundamental principles like mathematics and physics with toy push button instant mash potatoes TV dinner plugins. Not invented here syndrome. Paranoid, insular, self-defeating.

      And then turn around and say "We've got a skills shortage".

      http://news.slashdot.org/article.pl?sid=08/06/19/1719206 [slashdot.org]
      http://news.bbc.co.uk/1/hi/technology/7460870.stm [bbc.co.uk]

      No shit? Perhaps if you were't so full of yourselves and treated your employees with respect they might stay.

    • by Pig Hogger (10379)

      Innovation is incremental and people are collaborative. Whenever you stifle that collaboration, the economy as a whole suffers...
      The sacrosanct "economy" is not all that there is. Too often, other things are sacrificed on the economic altar...
  • FIST SPORT (Score:5, Funny)

    by ringbarer (545020) on Sunday June 22, 2008 @06:02PM (#23897617) Homepage Journal

    So business school cunts and lawyers are detrimental to the progress of society?

    Who would have thought it?

  • Yes, but (Score:5, Insightful)

    by Mikkeles (698461) on Sunday June 22, 2008 @06:02PM (#23897619)

    The point is not to enhance innovation, but to enhance corporate (ok, and shareholders as a side effect) profits. If there happens to be innovation, that's a nice addition.

    • by EmbeddedJanitor (597831) on Sunday June 22, 2008 @07:14PM (#23898035)
      As parent says, a company acts for itself and will happily operate to increase its profits even if that destroys competition,industries or economies ( just look at oil). The only limit is what the company can get away with..

      Capitalism is presented as being a healthy economic model because it provides a fitness function that weeks out the unhealthy players. That's fine until people game the system in various ways: monopolies, no competes, undercutting....

      • by mrmeval (662166)

        Oil companies could do themselves a world of good by stopping much of their activities in making fuel. They'd not have all the regulatory headaches and they'd still have a market for their product. It is a moments tweaking to crack feedstock rather than fuel.

      • Re: (Score:2, Interesting)

        by silentcoder (1241496)

        So maybe capitalism is bad ?
        I am NOT saying I want a controlled economy with a 'do what we need' approach to labor or anything... just a thought.

        We've had markets since before we had money (the one was needed for the other to be invented), trade (and yes free trade) is ancient. There were a few deviations along the way like Feudal systems...
        The first corporation was the East India Company and that wasn't until the 1600's.
        I am seriously starting to think Capitalism isn't working.

        It's turning into just anothe

    • Re: (Score:2, Insightful)

      by drseuss9311 (789400)
      doesn't innovation bring profits?
      • by siddesu (698447)

        Not necessarily.

        Investing in development is a complex undertaking which is very risky, so even a huge potential payout may have a low expectation at the planning stage.

        Bribing your government to setup the market rules your way, and passing enforcement costs onto the taxpayer on the other hand is simpler to execute, guaranteed to last (legislation doesn't change as quickly as the market), and without cost to you even if it fails, so it could look like a much better deal to the prospective investor.

  • by Anonymous Coward on Sunday June 22, 2008 @06:05PM (#23897629)
    The actual detriment to innovation is the business community's failure to regularly bring in new talent. The only folks being offered jobs are those who are deeply entrenched in the business.
  • apropos (Score:5, Interesting)

    by 7-Vodka (195504) on Sunday June 22, 2008 @06:06PM (#23897635) Journal
    My friend in Massachusetts recently got hit with one of those when he tried to leave a startup company that was paying him badly. It turns out this was their employee retention program: Sue or threaten to sue very loudly and scare everyone else into staying in their underpaid positions.

    He would have been out of work for 18 months with no compensation and no recourse had he not been lucky enough to find something in a non-related area. Even companies in california (where non competes are illegal) declined to hire him because they said they could be sued in MA.

    • Re:apropos (Score:5, Informative)

      by 7-Vodka (195504) on Sunday June 22, 2008 @06:09PM (#23897655) Journal
      Oh, and the CEO who was threatening to sue and having legal letters sent to him and his perspective employers was getting some kind of perverse gratification out of it. I guess when you're short on manhood it's the little bits of sadism that keep you happy...

      And since the CEO was such a prick, I have no second thoughts about disclosing the company name: Intelligent Biosystems in waltham MA. Please work there if you want to be under payed, sued and have a prick for a boss :)

    • Re:apropos (Score:5, Interesting)

      by pacroon (846604) on Sunday June 22, 2008 @06:40PM (#23897841)
      I can be living in a corporate-law bubble here in Europe, but don't you sign a contract, which you could potentially deny to sign, before any pact can be enforced? I once turned down a study-job (even) at a well-known corporation because the contract forced, that any project, SCHOOL or private, was to be the sole property of this company from the written date to six month after terminated employment. This was a standard contract given to everybody, I couldn't believe it. This was just a part time student job, not even a full-time one.
      • Re:apropos (Score:5, Interesting)

        by blantonl (784786) on Sunday June 22, 2008 @09:02PM (#23898777) Homepage

        Every large corporation has these types of clauses.. especially big corporate type information technology firms.

        It's pretty simple, you don't decline the job, you talk to the HR team and tell them about your concerns. In my situation, I've run a rather successful online business for quite some time and always negotiated T&C's that let me keep all IP and $ from my existing entities. It's a matter of crossing out clauses in the contract, initialing, and having an officer of the corporation do the same. In my case this included IBM as a company... whom I worked for many years. They are the mother of all patent-hoarding-mommas.

        Now, if you think you are going to come right out of school with no professional experience and a bunch of great ideas and expect that your efforts in the evening are going to be protected... you better detach yourself from the yoke and either find funding, VC, or talk to Mr. VISA. Otherwise, SOMEONE is bankrolling your efforts... and they expect a payback of at least principal or they expect to reap the rewards.

        I would too if I employed you.

        • Re:apropos (Score:5, Interesting)

          by AlXtreme (223728) on Sunday June 22, 2008 @10:07PM (#23899165) Homepage Journal

          Now, if you think you are going to come right out of school with no professional experience and a bunch of great ideas and expect that your efforts in the evening are going to be protected... you better detach yourself from the yoke and either find funding, VC, or talk to Mr. VISA. Otherwise, SOMEONE is bankrolling your efforts... and they expect a payback of at least principal or they expect to reap the rewards.

          Yes, someone is bankrolling my efforts; however that isn't the company I would work for. It's me.

          A company pays you to work for X hours a week. What you do in your own spare time is totally up to you, and none of your company's business. The company isn't bankrolling your company, it is simply paying you for an honest day of labour. What you do with those funds is up to you (buy a new car, invest or start a company).

          Now I could understand that your company wouldn't be glad if you set up a direct competitor, but anything that doesn't compete with the company interests should be fine. NCA's and the like are simply arbitrary arrangements to get more than those X hours a week from an employee. If you want me not doing anything besides my job, you'll have to pay me for 168 hours a week, and not a minute less.

          As someone who's running a small business, I wouldn't mind an employee setting up a side-business. Such a person is likely to be much more proactive in his work, probably gets more work done and brings in new knowledge from his side-business. Instead of badgering him with a legal battle (which means he'll be gone right away) I'd rather follow such an employee closely. It might even mean new business opportunities for the whole company by partnering with him. If he were very successful, I would look around for a replacement but as long as he does his regular job well I wouldn't want to kick him out.

      • Re: (Score:3, Interesting)

        by Blakey Rat (99501)

        You do, the difference is that in the Eastern US (you know, IBM territory), those contracts are generally legally enforceable and actually enforced. In the western US (you know, Adobe, Microsoft, Google, et al) these contracts are either not legally enforceable, or they are but never actually enforced.

        The west coast doesn't just luck-into having great tech companies, there's a legal and philosophical environment in place which makes it a great place to open a tech company.

        (Being from Europe, you might be un

    • Re: (Score:3, Insightful)

      by Wrath0fb0b (302444)

      It's a shame he signed such a shitty contract -- perhaps this can be a lesson to read your contracts wisely instead of complaining about clauses you don't like after the fact.

      By the way, since I presume your friend is an intelligent chap, I wouldn't dare insult him to insinuate that he is incompetent to enter into a binding contract. It seems much more plausible that he made an error of judgment, that's all.

      • Re: (Score:3, Insightful)

        by 7-Vodka (195504)
        Or how about the fact that the contract is being abused however he cannot afford the time in years and money in thousands of dollars in order to contest it and would gain nothing in the end.

        Who decides who is a competitor? Or if the position you're going to take is involved in the competition? You want court battles over these?

        Like any other legal tactic, these contracts can be abused and misused and the small fish is shit out of luck. I guess if you've never been in the position you wouldn't know then

    • by TheMCP (121589)

      I'm really surprised by this, because in 18 years of working in Massachusetts I've only ever been asked to sign a noncompete once, and it was only for three months, and I showed it to a lawyer and they advised me to go ahead and sign it on the grounds that it was not enforceable unless I quit. (The company ended up laying me off, and the boss threatened to sue me if I went to any of their competitors, but I told him what the lawyer said and left, and that was that.)

      I also talk with many of my former colleag

      • the problem is that getting your legal rights can be expensive, tens of thousands of dollars, is your house... to a CEO, it's just "doing business". That shows a severe problem with our legal system where non-enforceable things can be argued anyway simply because the other side has more money.

        I think my state Michigan strikes a good balance. I've seen the HR legal magazines that come out and we tend to enforce some non-competes, but the courts have ruled quite strictly on duration, and narrowed the scope

  • by Anonymous Coward on Sunday June 22, 2008 @06:17PM (#23897707)

    Clearly after being quite competitive with Silicon Valley in the '70s, Mass. has fallen far behind its rival in terms of the number and quality of startup companies, at least in the IT sector.

    Anna Lee Saxenian [amazon.com] got a lot of it right in her book comparing Route 128 with SV. Her main thesis was that eastern Mass. companies tended to have an NIH, all-encompassing, soup-to-nuts mentality (Apollo Computer, and Ken Olsen's DEC were prime examples), whereas SV has more of a ecosystem where engineers, capital, and ideas flow relatively freely between companies.

    Of course, this handicap is not unique to Massachusetts. For example, Microsoft is known to have been strongly influenced by DEC - in fact the Windows NT project was seeded by top engineers from the VAX project.

    • by Curlsman (1041022) on Sunday June 22, 2008 @07:37PM (#23898205)

      But DEC then sued MS:
      http://www.businessreviewonline.com/blog/archives/2005/10/index.html [businessreviewonline.com]

      "Microsoft hired Cutler, who immediately started work on what would become Windows NT. DEC sued because it believed Cutler had put Mica or even VMS code in NT, and Microsoft eventually paid up $150m. As part of the settlement Microsoft agreed that Windows NT and its BackOffice applications would offer support for DEC's Alpha processor, which is why DEC Alpha was the only RISC chip that supported both Digital's version of Unix and Windows NT - quite a coup for DEC."

      And
      http://www.vanwensveen.nl/rants/microsoft/IhateMS_1.html [vanwensveen.nl]

      "As a result, many design principles found in the VMS kernel ended up in Windows NT. (The number and splitting of priority levels in the scheduler, the use of demand-paged virtual memory and the layered driver model are only a few examples of many, many similarities.) The first version of VMS was released in 1977. Without trivializing the efforts of Cutler and his team (they did a lot of work on the project) one has to wonder what Microsoft really means with "New Technology". To illustrate, in a little known out-of-court settlement Microsoft paid DEC $150 million in compensation for using portions of old Digital OS code in Windows NT."

  • by dada21 (163177) <adam.dada@gmail.com> on Sunday June 22, 2008 @06:28PM (#23897759) Homepage Journal

    I have a business consulting corporation (founded in 1993, incorporated in 1997) that works in large scale construction and tech. We will never require an employer to sign a non-compete. We don't even require them to sign anything preventing them from "stealing" our business. What you do on your own time is yours. If you go off on your own and take our customers, all it does is teaches us to be more efficient, competitive and effective for our clients. I openly motivate my own employees to discover how to become their own bosses: save money, learn basic business skills, gain confidence, discover a niche market. Capitalize.

    A true capitalist welcomes competition, and also pushes themselves, not their employees, to be a motivator and an expert in their field. I would refuse employment if I had to sign anything that stifles my freedom to produce, invent or perfect a current product or service.

    • by Opportunist (166417) on Sunday June 22, 2008 @06:38PM (#23897833)

      That's the right way of doing it.

      The easy way is to abuse laws to protect your biz.

    • Re: (Score:2, Insightful)

      by DrMrLordX (559371)

      A true capitalist can and will be utterly destroyed by a company in China that miraculously reverse-engineers every product produced by said true capitalist's corporation.

      If you have an employee that leaves the company and then takes a suspicious "personal vacation" to Shanghai or Shenzhen while taking along engineering samples of your products that he was not meant to take with him when he quit, expect your company to fail and fail quickly.

      A non-compete might scare the guy into not doing that. Maybe. Eit

      • Re: (Score:3, Insightful)

        by Chandon Seldon (43083)

        If you have an employee that leaves the company and then takes a suspicious "personal vacation" to Shanghai or Shenzhen while taking along engineering samples of your products that he was not meant to take with him when he quit, expect your company to fail and fail quickly.

        Bullshit.

        If you aren't incompetent, you should be able to compete with a company that's late to market with a knockoff of your product.

        • Re: (Score:2, Insightful)

          by JakartaDean (834076)

          If you aren't incompetent, you should be able to compete with a company that's late to market with a knockoff of your product.

          Yeah, but...

          People in some positions -- senior designers, engineers, and so on -- have enough inside knowledge, gained over time at one employer, that makes them more valuable to a competitor than to their current employer, as they've already learned some things that the competitor hasn't. It's even worse for salespeople, who can take contacts and relationships built up over year

        • by ensignyu (417022)

          Yeah, if you aren't incompetent, you should be able to survive a disgruntled employee torching your corporate headquarters too, because you have backups and insurance, right? Just because it's survivable doesn't mean it doesn't hurt. The Chinese company may be late to market and with a cheap knockoff, but since they didn't have to pay for millions in stolen R&D, they can sell it for less and cut into your margins.

          So yes, it's great if your company is flexible enough to deal with bad situations, but unle

    • by rossz (67331)

      I want a job at your company and I would like to subscribe to your newsletter.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Smart. It's almost never worth it to fight for customers who want someone else or are too price fixated.

      You've just gone a step further and realized that if you don't fight they'll both remember you well, referring other customers and employees to you.

      I'm not in your market, but I think I'd like to work on a project with you anyways.

  • Despicable (Score:5, Informative)

    by the eric conspiracy (20178) * on Sunday June 22, 2008 @06:30PM (#23897779)

    I really hate non-compete agreements. In an at-will employment state they are indefensible, and Massachusetts would do well to make them unenforceable.

    BUT I think that conclusions of this article are very far fetched. With the exclusion of Silicon Valley, Metro Boston is the #1 startup hotbed in the United States. It is one of the best places to create a startup, with immense intellectual capital available from the biggest concentration of 4 year universities in the world. And the geography of the startup area covers 4 states, not just Massachusetts - NH, CT and RI as well.

    The article gave no numbers, and no comparisons of the laws of the various states in the region and their effects. Where are the facts, Jack? The article is just speculation without substance to back it up.

    I call Bullshit.

    • Re: (Score:2, Flamebait)

      by CodeBuster (516420)
      Why would anyone want to live in Massachusetts anyway? High taxes, non-competes, mandatory purchase of health insurance from a state selected slate of "pre-approved" companies (i.e. they screw you because you have to choose one of them), did I mention the high taxes?
      • People would want to live there because it's a really good place to live. And yes you did mention taxes. Twice. Get a clue.

      • Then don't live there.

        How about Silicon Valley? That would be cool. Let's see... higher taxes than Massachusetts, check. Higher real estate prices, check. MUCH worse traffic, check.

      • by dr2chase (653338)
        State and local taxes are below the US average, as percentage of wage income [massbudget.org].

        If your employer covers you with health insurance (as mine does) or if your spouse has insurance that covers, you then you need not purchase insurance.

        It's much cheaper to buy a house here than in California.

        The weather's worse, not much to be done about that, but you can avoid the non-compete's here by working for a California company. And yes, some I've negotiated, some I've signed, and one I turned down after failing to g

    • by Otter (3800)
      Where are the facts, Jack?

      In fact, the article specifically states:

      However, Fleming repeatedly cautioned that empirical data regarding the effect of non-compete agreements is scant.
      I agree with you: imbecilic story, even if the conclusion is actually true.
    • I've noticed further east the terms are more onerous than as you move west. In my state Michigan they make non-competes strictly specify duration, narrow field of business, and geographic area. The contracts like you see for video games where they specify "North America" would never hold up. Nor would skills that are too broad... computer programmer would never hold up... it'd have to be specific like Sales of X-Ray machines or something. Trying to apply it to people like production workers with no say wo

  • by HitekHobo (1132869) on Sunday June 22, 2008 @06:31PM (#23897787) Homepage
    The entire concept of a non-compete clause is to discourage brain drain and startup competition from previous employees. Isn't it obvious that this would reduce new startups where enforceable and have no impact where its not? Sorry, but this just isn't news to me.
    • by maxume (22995) on Sunday June 22, 2008 @06:36PM (#23897817)

      They aren't trying to inform you, they are trying to paint the ground. If people in Mass. start thinking that the law is costing them jobs...

    • by tietokone-olmi (26595) on Sunday June 22, 2008 @08:14PM (#23898479)

      Well yes, that's the market idealist's view. Market idealism falls over and breaks in three on its first encounter with a fluffy ol' feather.

      The real deal is that more often than not, non-competes are applied with a breadth that cannot be described as anything but abusive. In general an US-style non-competition agreement bars one from practicing his profession at any company other than the one that the person happens to be working at. Thus the employee is restricted from applying e.g. market forces to gain things such as higher pay: a switch of companies means a switch of careers unless the employer happens to go under for good and doesn't get bought out.

      Of course the practice tends to spread. Any company that does not require a non-compete of all employees soon finds itself in a worse position in labour negotiations. Therefore there's no realistic chance to "just find a contract that doesn't involve a NCA": chances are that within a state that permits them every company abuses them in exactly the same manner.

      And just so you know, this is one of the reasons why Europe laughs at the US. The right to profession is basically enshrined in every EU member country's contract law. Only extremely specific and time-limited forms of non-competition agreement are permitted, such as concerning a company's existing clients for up to six months after resignation (or immediately after termination).

  • by parabyte (61793) on Sunday June 22, 2008 @06:45PM (#23897873) Homepage

    that fortunately does not exist in Germany. Here the law is simple: A company that wants an N.C.A. to be enforceable, it has to pay at least 50% of the former wages of the employee, otherwise the N.C.A. is void. It also has to be very specific, the new company must be competitor, being an IT-company is not enough, you basically have to provide the same product to the same custumers. It is also limited in time to one year.

    When I once left a company that didn't want to let me go I happily told them I would love to sign an N.C.A., but when they saw what it would cost them and would bring them (I would be gone anyway), they quickly reconsidered.

    p.

  • If you move to where your job was outsourced, is it considered noncompetative? :)

    You have to picture what noncompetes come down to as this statement:
    "You are good at what you do, someone with valuable skills -- and since we don't want you to do it for us anymore or you have chosen not to do it for us anymore, we don't want you to do it for anyone else. Have a nice day."

  • by RustinHWright (1304191) on Sunday June 22, 2008 @06:59PM (#23897943) Homepage Journal
    How can anybody be surprised by this?

    I'm sorry, but as a former consultant, occasional inventor*, and business owner, I've always thought that non-competes were mostly b.s. If you're afraid that they'll steal your IP, register and enforce your IP. If you're afraid that they'll provide better services, well then, best you do a good job there, cobber. Seems to me that non-competes usually just protect those with lots of lawyers against those competing on the basis of value for the dollar.

    *See patent 4,808,204.

  • by btarval (874919) on Sunday June 22, 2008 @07:07PM (#23897981)
    Like everyone else, I was under the impression that non-compete agreements were illegal in California. It turns out that there's an end-run around them. Here's the article: Mattel, rival slug it out over rights to Bratz [mercurynews.com]. Registration required, just use bugmenot.com. Yeah, it's about dolls, and not software. But you know the sleezy Valley lawyers will be looking at this one for ideas.

    In short, this guy signed an "Exclusivity" contract. Apparently that's different from a "Non-compete", though how in the world that's possible is beyond me.

    Perhaps someone other than the IANAL types can educate me here. But, in short, if this one holds up, you can bet that you're going to see Exclusivity Contracts start popping up among software and hardware designers, instead of just doll designers.

  • by linefeed0 (550967) on Sunday June 22, 2008 @08:04PM (#23898393)

    The whole eastern seaboard, at least from Massachusetts to Florida, is a cesspool of snobby lawyers and greedy big money people. But the southeast is worse than anywhere; it is especially laughable that so many states proclaim the "right to work [blogspot.com]" (without a union, possibly for peanuts or for a tyrannical boss) but you don't actually have a legal right to work in your occupation if you've signed a broad non-compete that forbids it. These are often "at will" states as well, where your employer can fire you and hire someone else to do what you do, but you can't necessarily work for another company doing what you know how to do.

    I've lived in VA and in PA most of my life, and I'm just about finished with the eastern US forever. My next home will be either in Europe or west of the Mississippi. By the way, the states that will not enforce non-competes include CA, OR, CO, MT, ND, SD, OK, LA, and probably a couple others. Nearly all of them are in the western US.

    As for the most ridiculous non-compete ever, how about a membership agreement for an outdoors club [outdoorsocial.com] that forbids former members not only from operating a competing club, but even using a google group to organize similar activities? The original version [stashbox.org] was even worse, if you want to read some lawyerspeak that will make your head spin, and prompted this article [readthehook.com] in a local newspaper.

    • but you don't actually have a legal right to work in your occupation if you've signed a broad non-compete that forbids it.

      Generally, contracts of the form "you can't do X because you willingly and knowingly signed an agreement not to do X" are a reasonable exchange of one thing of value for another. Non-competition is a service just like any other -- one that individuals ought to be free to sell for whatever price they see fit. Or do you presume to tell others what they can and cannot do with their time?

      • Collective bargaining (aka unions) is a legitimate negotiating tactic. Banding together to increase your aggregate leverage is just smart capitalism.

        And yet there are states where this is not allowed.

        Or do you presume to tell others how best to negotiate a business deal?

    • Just to elaborate on this wonderful theme. I'm starting south from Mass. and leaving Maine and New Hampshire out of this, although at least NH probably sucks too.

      Massachusetts: You did read the article, right?

      <strike>Rhode</strike> Rude Island: A crummy little shithole with some of the worst labor laws [wikipedia.org] to be found anywhere outside the South. Population is split between a boring old city with the most pretentious of the already pretentious Ivy League universities, a bunch of pricey beach towns fo

  • Zero sum game. (Score:5, Insightful)

    by Anonymous Coward on Sunday June 22, 2008 @08:10PM (#23898431)

    As an employer, you lose as much (in terms of failing to recruit experienced staff from your competitors) as you gain in terms of preventing the loss of experienced staff to your competitors.

    In an industry where these clauses are common, everyone would be better off if there were to be a law disallowing them.

    The trouble is - if you're the only employer who doesn't do it, you lose staff and can't easily recruit replacements.

    It's a classic "crisis of the commons" issue - and that means that you need a law to prevent it.

  • by phorm (591458) on Sunday June 22, 2008 @08:31PM (#23898577) Journal
    I have one of these, and I haven't been impressed with it. First of all, it's very generic, without being specific as to what knowledge I can't use in future employers, etc. It was also handed to me *after* I moved across the country about 4300km to my new employer, and after I had received and accepted the job offer (which I had before I left). Since I had already quit my former job and moved 4300km, there wasn't much I could do but accept. I even asked to append more specific details and was turned down.

    Luckily, my company doesn't have any history of trying to enforce these idiotic things, and I have no plans on doing anything dumb like jumping ship and taking company-specific info or customers with me, but I do wonder how enforceable these boilerplate contracts are. From what I've researched, they're not very enforceable if they aren't rather specific (what the actual 'competition' would be, the competitive region, etc) , or if alternate methods would have sufficed (say to prevent stealing proprietary info or customers).

    I do wonder of the legality of hitting somebody with this *after* the job offer has already been given and accepted. I had requested the contract before moving but had assumed that it was more or less in the offer.
    • by Watson Ladd (955755) on Sunday June 22, 2008 @08:47PM (#23898671)
      IANAL, but always get it in writing. Always. Especially if moving across the country.
      • by phorm (591458)
        Yup. The question is, what happens when what you receive in writing at arrival (the contract) is different than what you receive in writing prior to (the job offer and acceptance letter). If I'd known that the two differed so greatly, I'd likely have held back for a less onerous contract before signing the offer/acceptance. In other places I've accepted employment the two were pretty much the same thing, with the exception of union rules etc in shops I worked that were unionized.
  • tools of the trade (Score:4, Insightful)

    by ncmathsadist (842396) on Sunday June 22, 2008 @08:52PM (#23898703) Homepage
    A noncompete clause is akin to telling a sculptor never to take up the chisel again. These should be illegal. They strangle the ability of someone skilled in an art to earn a gainful living. Stinko.
  • by asackett (161377) on Sunday June 22, 2008 @09:14PM (#23898853) Homepage

    When I was foolish enough to work for wages, I always took a red pen to the salary negotiations. With it, I struck out every non-compete clause before signing the employment contract. Some HR folks freaked out over it, but it never cost me the job.

    If it had ever cost me the job I was seeking, I would have considered it a very cheap exit out of what could otherwise have been a very expensive experience.

  • My policy is that I never, ever, under any circumstances even consider thinking about signing an NC. Period. End of story. They are a deal-breaker.

    I don't trust anyone who doesn't trust me.

  • by Myria (562655) on Sunday June 22, 2008 @11:55PM (#23899801)

    How non-compete agreements ought to work is that they can prevent you from getting a competing job, but they have to pay your salary during this period. This would prevent damage to a worker's livelihood when a company invokes these, and provide a monetary disincentive to invoking a privilege that is damaging to the industry.

    Not that I expect this to happen...

    • by Interfacer (560564) on Monday June 23, 2008 @07:35AM (#23901627)

      That is exactly how it works in Belgium, and many other European countries.

      Your previous employer has to pay your salary for the time during which you are not allowed to compete. Failure to include such a clause, or any of the other specific and mandatory details will void the entire non compete section and you are free to do what you want.

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