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The Almighty Buck IT

Bill Guarantees 50% Salary For Workers Laid Off With Non-Compete (computerworld.com) 223

Reader dcblogs shares a Computer World report: Non-compete agreements are controversial for many reasons, but what may be worst of all: Even if you are laid off from your job, a non-compete agreement may still apply. California has made non-compete agreements unenforceable, but Massachusetts has not. Some opponents say that's partly the result of lobbying by EMC, which has considerable clout as a major state employer, headquartered in the Boston suburb of Hopkinton. But the pending $67 billion merger of EMC with Dell, and the prospect of merger-related layoffs, is spurring a new attack on non-compete agreements. State lawmakers are considering limiting non-compete agreements to one year, banning them for low-wage workers and for people terminated without cause. The leading legislative proposal will also require an employer to pay at least 50% of the former employer's salary during the period of time the non-compete is in effect. This salary guarantee is called "garden leave" and is in Massachusetts House bill H.4323. In May, the White House released a report about non-compete agreements. It found that 18% of the workforce is now covered by a non-compete agreement, but over the course of a career, some 37% of all workers (PDF) will be subject to them.
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Bill Guarantees 50% Salary For Workers Laid Off With Non-Compete

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  • Bill (Score:5, Funny)

    by Anonymous Coward on Wednesday June 15, 2016 @12:03PM (#52322625)

    Bill who?

    • I mean, he's already behind on child support, and he's selling blood plasma just to make ends meet!

      That's Bill through and through - just a lot of big talk.

      • I mean, he's already behind on child support, and he's selling blood plasma just to make ends meet!

        That's Bill through and through - just a lot of big talk.

        That deadbeat better get himself a job before we do like the British and throw him in debtors prison!

  • by HornWumpus ( 783565 ) on Wednesday June 15, 2016 @12:06PM (#52322635)

    Seriously, nobody ever actually checks that you signed your name. Just write 'I don't agree' somewhat legibly.

    HR drones are fucking morons, use it.

    Consider signing actual name on IRS and 401K documents, but even there no big deal, nobody checks.

    • Seriously, nobody ever actually checks that you signed your name. Just write 'I don't agree' somewhat legibly.

      If you want to game the system, there are much better ways than that:
      1. Sign NCA.
      2. Start your own business on the side
      3. Work on your own business while at your day job
      4. Get fired for slacking off and not getting anything done
      5. Work on your own business full time, using the 50% salary to live on

      I live in California, so I can not do this myself. But from personal experience, most NCAs are pointless because 99% of businesses don't have any ideas worth stealing.

    • by slew ( 2918 ) on Wednesday June 15, 2016 @01:44PM (#52323317)

      Seriously, nobody ever actually checks that you signed your name. Just write 'I don't agree' somewhat legibly.

      HR drones are fucking morons, use it.

      Consider signing actual name on IRS and 401K documents, but even there no big deal, nobody checks.

      IANAL, but AFAIK, just signing an "X" in the presence of the counterparty is enough to "sign" a document. All you need is a meeting of the minds for a contract which is why they make you initial here and there when signing important documents, so you later can't claim you didn't get a chance to read a certain clause. This is why square can let you scribble illegibly on an ipad to charge your credit card.

      Actually signing "I don't agree" might work against you in this case (since you are kind of admitting you understand it enough to disagree with it). It might be better to legibly write "I don't understand" or "I am incompetent", but it probably legally doesn't make much of a difference if you actually put pen to paper signalling to the counterparty that the contract terms are closed.

      The only real argument you probably have if you have already scribbled on the signature line in the presence of the counterparty is that you signed it under duress. However, if you later accept a check, that might be a hard argument to make.

  • by SuiteSisterMary ( 123932 ) <slebrun@@@gmail...com> on Wednesday June 15, 2016 @12:10PM (#52322667) Journal
    How about non-competes require to pay out at the highest salary the worker has had with the company, with automatic COL raises baked in, over the length of the NDA, minimum two years.
    • How about non-compete pays the salary in the highest offer you were able to obtain, for the duration of non-compete? Every time I changed jobs, I got at least 15% raise, sometimes more than that. I don't see why I should give up this money just so my previous employer could have me not compete against them.

      • by taustin ( 171655 )

        And the cost of any training to keep the professional skills current, for professions where not doing so can keep you from finding new work.

    • by JackieBrown ( 987087 ) <dbroome@gmail.com> on Wednesday June 15, 2016 @12:36PM (#52322853)

      And pay for healthcare... and a house... and a pony

      • Re:How about (Score:4, Interesting)

        by SuiteSisterMary ( 123932 ) <slebrun@@@gmail...com> on Wednesday June 15, 2016 @03:03PM (#52323941) Journal

        If the employer wants to prevent you from working, they need to be paying for your time. They're paying money in exchange for the benefit of you not providing your time and labour to another country.

        If they're not willing to pay, why should you be willing to do something in return?

        • I've never signed one of these but then, I have never been in a position where I had enough inside knowledge to need to sign one.

          So these are something hidden and not something you agree to when hired?

          I've seen them requested by employers after a layoff but that was after the fact and came with a payout. It wasn't two years wage but it was a voluntary request.

      • by tsstahl ( 812393 )

        And pay for healthcare... and a house... and a pony

        I'm 6'3" you insensitive clod! I need a beast at least 16-18 hands high. Sheesh.

      • by jedidiah ( 1196 )

        If they are preventing you from working, then all of that is fair game really. Slavery has been illegal in this country for awhile now.

    • The whole concept is backwards. People don't realize wage-labor costs are costs to the consumer. It's like all the people talking about how Comcast charges way too much for Internet and Cable while Comcast has an average 10% annual profit--meaning *maybe* they could charge $72 instead of $80 and break even.

      Bumping costs like this means somebody has to lose their job; we're transferring unemployment as a way to satisfy our sense of fairness (plus increasing costs decreases purchasable products, increasi

      • Re:How about (Score:4, Insightful)

        by Hognoxious ( 631665 ) on Wednesday June 15, 2016 @01:26PM (#52323187) Homepage Journal

        Bumping costs like this means somebody has to lose their job

        You have it backwards. It's severance pay. If nobody loses their job, the cost is zero.

        • No, not quite.

          Increasing the cost of a product by increasing the wages paid in aggregate means that the product's price must hold a higher point. That means fewer products bought, which means fewer jobs making said products.

          This is the same reason raising minimum wage causes a net loss in employment.

      • No, you have the concept backwards.

        Why do you think that CA and Silicon Valley in particular, despite the high cost of living, continue to produce startups? It's because non-competes are not enforcible.

        Even allowing a paid 1-year non-compete makes it much more difficult to build a startup.

        Non-competes are great for legacy, established companies. They don't benefit society as a whole, instead they reduce innovation and provide a drag on economic growth. That's why non-competes should be banned.

        • Even allowing a paid 1-year non-compete makes it much more difficult to build a startup.

          The problem space given is "non-compete clauses are enforced indefinitely, and so we're proposing a bill to limit them to 2 years and provide 50% severance pay for that period". That's what's actually on the table. As an alternate to the stated problem, I've made zero errors; you have instead said, "Well, uh, the problem doesn't exist, and you're proposing to create a new problem."

          At the same time you propose that non-competes are unenforceable, you also propose we should ban them. If they're already

  • Seems fair to me (Score:5, Insightful)

    by mitcheli ( 894743 ) on Wednesday June 15, 2016 @12:12PM (#52322683)
    Can't have unions, can't get another job, have to take pay cuts, get randomly laid off, no job security. And now they want to make it so you have to find a whole new type of job? Add a poison pill to keep HR from running amok.
    • by mark-t ( 151149 )
      The only thing that "makes it" so that you ever have to find a whole new type of job when you leave is when you sign a non-compete in the first place (and even then, only in jurisdictions where non-competes are enforceable). In practice, if the employer terminated your employment for whatever reason, then as long as you don't divulge confidential information that you acquired while at your last employer, or cause loss to them by perhaps taking their clients or customers away, they wouldn't have any legiti
      • by Anonymous Coward on Wednesday June 15, 2016 @12:53PM (#52322961)

        The problem is most of those companies or contracts claim basically anything and everything, including the experience you've gained, is exactly such information. This can be quite problematic if your financial situation (or even just your pay) were not-so-great.

        Keep in mind these are the same types that try to steal our own intellectual property by pretending things we've done on our own time in our own house on our own computer belongs to them because we're under their employ.

        • by mark-t ( 151149 )
          Which type of non-compete are you talking about? One where you aren't allowed to compete with the employer while working for that employer, or one where you aren't supposedly allowed to compete with them after leaving them?

          They are two entirely different things, and are handled, as they should be, entirely differently.

  • to move where they can non-compete
  • In Belgium if you have one, you are pretty golden as it is the company that has to pay a serious sum and it is only for higher ups, so not if you work as a normal worker.
    Because if they put it in, they will have to pay you and you can still work anywhere you desire.

    When I changed jobs, that was the first they removed, because I was not going to the competition and if they would not have revoked it, they would have had to pay me.

    In the majority of the cases, if it is in there, you can still work anywhere you

  • by SvnLyrBrto ( 62138 ) on Wednesday June 15, 2016 @12:48PM (#52322935)

    Seriously, just ban con-compete clauses nation-wide and void any contracts that include them. They're only ever used abusively on the part of the company that insisted on them as a way to screw over employees in revenge for leaving. And they don't benefit the overall economy. Just look at California. The illegality of non-competes certainly hasn't caused the tech industry here to collapse in on itself.

    Apple and Google got in a world of hurt a few years ago for screwing their employees over with an informal no-poaching arrangement. Well... non-compete clauses screw the employee an order of magnitude worse. And we should drop the hammer... equally hard if not harder... on the companies using them.

  • Interesting twist... (Score:5, Interesting)

    by Mitsoid ( 837831 ) on Wednesday June 15, 2016 @12:55PM (#52322979)

    What if the company cut your salary before firing you?

    "Hey Bill, you've had your salary reduced to minimum wage, but don't worry, we're firing you!"

    Non-compete for 1 year price: ~$8,000

    Or even better:

    "Hey bill, we'll give you severance pay of $X, but you have to sign these papers..."

    Included in that pile is an agreement to take a lower base salary for your last pay check, which is then used for non-compete salary calculations.

    • by PPH ( 736903 ) on Wednesday June 15, 2016 @01:02PM (#52323037)

      If the legislators are smart, they'll make the calculation of base salary depend on salary over the past few years. And making employees sign something to retroactively reduce their base salary could be made illegal for the purpose of the law.

      Legislators (or at least their staff) aren't stupid. That's how they get hired into the private sector. They either keep writing laws that are increasingly onerous or business buys them out.

      • I'd make it the compensation should be whatever is necessary to bring your new salary up to your peak old salary + a certain % commensurate with increased value due to skills and experience gained. So if you used to make $100k, and the non-compete forces you to get a job flipping burgers for 2 years making $25k, your original employer should be on the hook for the $75k + (say) 15%. OTOH if you make $150k at your new job, then obviously the non-compete hasn't reduced your ability to find a new, better job.
    • If you have a non-compete then chances are you also have a pay agreement that would place limits on that.
      Then depending on the state you are in any major size cut would allow you to consider that as being fired without cause. So you get the various benefits from that.
    • Included in that pile is an agreement to take a lower base salary for your last pay check, which is then used for non-compete salary calculations.

      I imagine they may have considered this possibility... Seems pretty easily thwarted--just use the person's salary as their average of the last three paychecks, with the caveat that amounts less than the check previously issued are unusable for this computation (i.e. you can change his salary on the last day, or months ahead of time, but because it's an average tha

      • by Minupla ( 62455 )

        This is why there should be a requirement for all law makers to post their proposals to /. and thwart the obvious holes we find in them! Or to ask an 8 yr old child. Same difference. :)

        Min

    • Given the way business works (outsourcing, tax loopholes, abusive practices like non-competes" the thing to keep in mind is that companies will just find a way around this.

      Manager 1: Fred's making 100k but we need to get rid of him. I don't want to pay Fred 50k next year to not work here.
      Manager 2: Well, just demote him and drop his salary to minimum wage and wait for him to quit next month.
      Manager 1: That's brilliant? Let's order another martini.

      • the salary minimum wage? or the state one? even so fred can quit on the spot and get the non-competes at half his pay + unemployment.

    • What if the company cut your salary before firing you?

      "Hey Bill, you've had your salary reduced to minimum wage, but don't worry, we're firing you!"

      Non-compete for 1 year price: ~$8,000

      Or even better:

      "Hey bill, we'll give you severance pay of $X, but you have to sign these papers..."

      Included in that pile is an agreement to take a lower base salary for your last pay check, which is then used for non-compete salary calculations.

      This. You totally nailed it. My previous employer was a company I don't wish to name because frankly, I don't want to give them any publicity. Few have heard of their North American office, who I worked for, and I'd like to keep it that way. During my final year or two there (not sure of the exact time) they forced us to sign a form that went to HR that said that if they laid us off, they agreed to pay us one month's severance pay for each 2 years we worked there but there was a huge catch. Until your s

    • There's a concept known as "constructive dismissal" that thwarts this plan.
  • health coverage? (Score:2, Interesting)

    by Anonymous Coward

    What about health and other benefit coverage during the non-compete time period?

  • Many contracting companies have an NCA that prevents a contractor from going to a new firm for a job which is also offered by the original contracting company, in addition to requiring a premium fee from a contract-to-hire from the host company.

    • by swb ( 14022 )

      My response is tough shit for them.

      Any business model that relies on court enforcement of restrictive labor contracts is weak. If you can't provide an incentive good enough to keep your employees at your firm and need to coerce them, you're doing it wrong.

  • by sjbe ( 173966 ) on Wednesday June 15, 2016 @01:23PM (#52323167)

    Non-compete "agreements" are hugely unethical in my opinion. If I work at Google and Apple wants to hire me I should have the right to switch employers without further restrictions. If companies want employees to sit on the sidelines they should either pay them enough to keep them on the payroll or pay them market value to sit on the sidelines. Putting a non-compete in front of an employee as a condition of employment should be illegal and unenforceable anywhere in the US.

  • by Applehu Akbar ( 2968043 ) on Wednesday June 15, 2016 @02:01PM (#52323441)

    Non-compete agreements were historically an executive clause, designed to protect a company against having a key man quit and then immediately apply a headful of inside knowledge against the former employer. When such a worker separated with a non-compete in effect, he was usually walking off with a tidy stack of equity shares whose value would be diminished if he were to violate the agreement.

    So when a company requires a non-compete from a worker who does not in any way benefit from the clause, let's require compensation in the form of a percentage of former salary.

  • I can see them being actively enforced for people working directly on technologies with a specific competitive value, but it seems like they're used so often for people whose main risk from leaving for the competition isn't threatening privileged information but the hassle to management of losing an employee and having to hire another one, often at a higher wage.

    Does anyone really spend any money on these rank and file "blanket NDA" employees?

  • It should 75-100% salary for the duration of the time for those laid off or fired without cause, but, it should also be 50% for those fired with cause. After all, it is still in effect.
  • Non-competes should not be enforceable for layoffs and termination for convenience. If they are enforced at all they should only be fore voluntary termination or for gross misconduct.
  • A non-compete that essentially means you cannot find work is void.

    For example, it would be acceptable to say that you cannot work in the same area your current employer is in, provided it isn't too broad and it depends on what kind of job you have. If you work at an investment bank as a database engineer, the non-compete clause "must not work for financial services" can stand because you can find work in a different area (e.g. as a database engineer for a search engine provider). If you were a stock analyst

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