US Moves To Bar Noncompete Agreements in Labor Contracts (nytimes.com) 169
In a far-reaching move that could raise wages and increase competition among businesses, the Federal Trade Commission on Thursday unveiled a rule that would block companies from limiting their employees' ability to work for a rival. From a report: The proposed rule would ban provisions of labor contracts known as noncompete agreements, which prevent workers from leaving for a competitor or starting a competing business for months or years after their employment, often within a certain geographic area. The agreements have applied to workers as varied as sandwich makers, hair stylists, doctors and software engineers.
Studies show that noncompetes, which appear to directly affect roughly 20 percent to 45 percent of private-sector U.S. workers, hold down pay because job switching is one of the more reliable ways of securing a raise. Many economists believe they help explain why pay for middle-income workers has stagnated in recent decades. Other studies show that noncompetes protect established companies from start-ups, reducing competition within industries. The arrangements may also harm productivity by making it hard for companies to hire workers who best fit their needs.
The F.T.C. proposal is the latest in a series of aggressive and sometimes unorthodox moves to rein in the power of large companies under the agency's chair, Lina Khan. "Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand," Ms. Khan said in a statement announcing the proposal. "By ending this practice, the F.T.C.'s proposed rule would promote greater dynamism, innovation and healthy competition."
Studies show that noncompetes, which appear to directly affect roughly 20 percent to 45 percent of private-sector U.S. workers, hold down pay because job switching is one of the more reliable ways of securing a raise. Many economists believe they help explain why pay for middle-income workers has stagnated in recent decades. Other studies show that noncompetes protect established companies from start-ups, reducing competition within industries. The arrangements may also harm productivity by making it hard for companies to hire workers who best fit their needs.
The F.T.C. proposal is the latest in a series of aggressive and sometimes unorthodox moves to rein in the power of large companies under the agency's chair, Lina Khan. "Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand," Ms. Khan said in a statement announcing the proposal. "By ending this practice, the F.T.C.'s proposed rule would promote greater dynamism, innovation and healthy competition."
We know non-competes are unnecessary (Score:5, Insightful)
The prevalence of non-competes is frustrating, because we have very solid evidence they're unnecessary. California forbids non-compete clauses in employment contracts*, and it hasn't caused any serious problems for businesses based here. There is evidence, mentioned in the original article, that allowing non-competes is bad for startups, and a common theory says California's vibrant startup culture is precisely because state law forbids non-compete clauses.
*Non-compete clauses are allowed for business owners as part of buy-outs. So if you sell your business, the new owners can include not setting up a competing business as part of the sale.
Re:We know non-competes are unnecessary (Score:5, Informative)
It's more than just theory. It's well-documented history. Besides Bill Hewlett and David Packard, the names you'll see most often offered up as the "founders" of Silicon Valley are the "traitorous eight" from Shockley Transistor Corporation (Guess what they made?). After luring the eight (Whose names will look very VERY familiar.) to the Bay Area which, at the time, was not yet "Silicon Valley" and had little to no semiconductor industry to speak of, William Shockley turned out to be a complete ass to work for and alienated the lot of them. So, as is common in those cases now, they bailed out and, instead of moving back east where a non-compete might have been able to be enforced, stayed in California and founded Fairchild Semiconductor; where they designed and built transistors for the Air Force's ICBM fleet. Fairchild, in turn, was the HP of its day and wound up training executives that, in turn, left to found companies like Intel, AMD, Teledyne, and others. And one of the eight: Kleiner, teamed up with a fellow from HP named Perkins and helped provide the VC for more startups than you can count; plus created the Sand Hill scene which funded even more.
None of that would have been possible if California were plagued by those east-coast-style noncompetes. The eight would have just had to suffer ignominious suffering under Shockley's "The floggings will continue until morale improves." management style. And SV would never have happened.
Re: We know non-competes are unnecessary (Score:2)
There are lotsa legit reasons to poke fun at California, making shit up is just lazy.
Not sure how good an idea this is. (Score:4, Interesting)
Among many other problems, I'd guess this will shift more of the costs of industry-specific training away from employers and onto employees.
Right now, employers can offer training to their employees that might make them more valuable to competitors, because noncompetes make it harder for them to just quit and go work for one of them.
Without noncompetes, no employer will offer that kind of training. To do so would be to actively work against their own interests in a competitive marketplace.
Yet, all employers need for their employees to have that training.
I don't see any way for that to happen other than for employees to get it themselves.
And that will be a lot harder for some people, given their level of financial security or lack thereof, than others.
Training is not a good reason for non-competes (Score:5, Insightful)
Among many other problems, I'd guess this will shift more of the costs of industry-specific training away from employers and onto employees.
Right now, employers can offer training to their employees that might make them more valuable to competitors, because noncompetes make it harder for them to just quit and go work for one of them.
You can do this for super-expensive training without non-competes, you create a contract that says if you leave within x months of receiving this training then you owe us y amount (reduced by z per month you stay). That way if you want to bail out to another competing company early, they're going to need to be willing to pay off that training cost to hire you. The one reason why this might be less popular in the US is that you guys love to be able to fire people at the drop of a hat and for these training contracts to be equitable folks fired without cause don't have to pay back the training cost.
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Or just offer RSU's to encourage trainees to stay until the shares are vested.
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Oh yes and also, if the goverment allowed to have competition, no one would ever open a business because someone else may open a competing business and steal their clients.
Wait a second...
like MD's can use them to stop some one from BK (Score:2)
like MD's can use them to stop some one from working at BK.
noncompetes have been used to lock some people into 60+ hour weeks. With stuff like work it or your fired and under that noncompete the only jobs you will get for the next 2 years is fast food as our noncompete bans work in your skill!
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> To do so would be to actively work against their own interests in a competitive marketplace.
wouldn't the solution to this problem be to make your employees want to work for you?
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Ideally, sure. But things don't always work out, for reasons that might be either party's fault, or both's, or neither.
Also, for reasons I don't understand, many companies are much more willing to offer competitive pay to new hires, than to existing ones. That's part of why turnover in our business is so extreme. If one wants a raise, or in many cases a promotion, it's often far easier to get that from a different employer, than one's current employer. That's part of what I believe they need to change i
Re:Not sure how good an idea this is. (Score:4, Insightful)
Right now, employers can offer training to their employees that might make them more valuable to competitors, because noncompetes make it harder for them to just quit and go work for one of them.
Employers who worry about someone leaving after they've spent the time training them how to do something seem to always forget they have this really powerful tool called "money". If an employer encourages a strong work / life balance, a toxic free work environment, and pays enough "money" to live a decent stress free life when not working then it's unlikely the employee would ever want to leave them.
Switching jobs is a pain in the ass, especially if they use a different provider for their benefit and pension / retirement savings accounts. People who are happy at their job and have a clear distinction between "work" and "home" aren't going to move around, especially if they're paid competitively. Its companies who want to train you to do a complex task while continuing to pay you far less than what people with those skills have elsewhere who have this issue, companies who recognize your skill and bump your wages to match will typically do just fine.
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I agree.
But for whatever reason, employers in my experience don't usually see things this way.
Losing productive employees is also a huge expense to employers, and I don't get why so many of them do far less than they reasonably could to avoid that.
Best I can tell, sometimes it's to avoid the situation where they had to bump someone's salary by 20-30% in order to retain that person, and then word gets out, everyone else now wants that same kind of percentage, even if their compensation is actually somewhat c
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At least they'll be paid MORE for their skills, whereas employers higher you at your current level, but then expect you to go through all this training without any pay increase.
But I still call BS. We train new highers because there isn't anyone available with the skills. If they quit within 1 year, then they need to pay back the cost of training. The employee obviously needs to agree to this. So yes training will still exist.
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I am not free to offer examples from my own experience.
But what I'm referring to would be knowledge specific to one specific industry (e.g., steelmaking, or mortgage lending, or sports betting, or medical research). Not something like a programming language, which wouldn't be the subject of a currently enforceable noncompete anyway.
Without an enforceable noncompete, a company might inadvertently end up training people who end up working for their own direct competitors. Thus, in that situation, there is a
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"Without an enforceable noncompete, a company might inadvertently end up training people who end up working for their own direct competitors. Thus, in that situation, there is a strong disincentive for anyone to provide that training."
In that case the employer can chose to have untrained workers which would not be to anyone's advantage. Make employment attractive enough so that the employer doesn't want to leave, or the original employer pays the leaving employee for a period of gardening leave until their
Most States Don't Enforce (Score:3)
Most states don't enforce them anyways. For example, Minnesota courts haven't upheld one in more than 40 years.
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As an individual you can’t risk litigation getting that far. Even if you win, you will likely have already lost. The mere threat hanging over your head of a major corporation sending its legal attack dogs at you is massively chilling by itself.
I signed one once (Score:3)
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A lot of folks assume this. It's not enforceable in some places, but it very much is in others. Further, most companies I've worked for will proactively ask whether a prospective employee has signed a relevant noncompete, and, if so, will not consider that person until it has expired (typically here it would be between one and several years later). While litigation over this topic is uncommon, it is VERY expensive and time-consuming when it does happen. No one wants to risk that.
I for one honor my commi
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Be careful. You say non unforceable but what you do not see behind the scenes in HR checking a secret database or website or Taleo HR onboarding (God I hate that ###) blacklisting you without you even knowing. You may apply for other jobs but you won't ever hear anything back after a screening interview and you won't ever know why.
Since this is all hush hush most IT workers are ignorant about the issue even if it is not enforcable your employer or another one will still check out of goodwill on a secret han
Is there an argument that this is bad for workers? (Score:2)
Just saying, every comment I see here that thinks this is bad or questionable is from the perspective of the employer; people can get poached or people can get trained and leave or people can bring knowledge with them to new jobs. None of these are downsides for the employee in question just the current employer to which I would say, why should their priorities take preference over the workers themselves?
This seems like an upside for existing workers to have more leverage. If a company spent years "traini
Turning Japanese? (Score:2)
Land of the free! (Score:2)
FTC is the wrong place (Score:2)
This should be decided by elected representatives, and the courts if they overstep their authority. Then voters can decide if they agree with the reps' decisions in the voting booth.
The FTC should write a recommendation and propose legislation.
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Does the FTC even have the power to issue a regulation like this? The FTC is about protecting consumers- this seems to fall wildly outside the bounds of that. Though I think banning non-competes is the right policy; Congress has to do it. I can't see any remotely honest court actually upholding the FTC's power to do this.
Re:FTC is the wrong place (Score:4, Informative)
Yes, the FTC has the power to issue a rule like this. See 15 U.S.C. 45 [cornell.edu] and 15 U.S.C. 57a [cornell.edu], concerning "Unfair methods of competition in or affecting commerce" and the associated rulemaking procedures the FTC must follow.
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Yes, the FTC has the power to issue a rule like this. See 15 U.S.C. 45 and 15 U.S.C. 57a, concerning "Unfair methods of competition in or affecting commerce" and the associated rulemaking procedures the FTC must follow.
Isn't it amazing what happens when an administration actually asks the lawyers what's legal before trying to do it? People forget that's possible, after four years of an administration which didn't ask and always guessed wrong.
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Elected representatives already decided this when they enacted Section 5 of the FTC Act, codified at 15 U.S.C. 45, along with the rulemaking provision codified in 15 U.S.C. 57a.
Congress delegated the ability to make rules concerning "Unfair methods of competition in or affecting commerce", and the FTC is using the authority that Congress granted to it.
If you don't like the rule, you can always comment in the rulemaking proposal, and if the FTC adopts the rule anyway, you can later sue in the courts.
Compensation (Score:4, Interesting)
I'd be willing to sign a non-compete if and only if it included compensation for the term of the non-compete. I'll agree to not go work for a competitor for as many years as you care to pay me an annual amount equal to my highest year's compensation plus an annual increase that matches a government published inflation rate percentage.
At any time you may provide me with six months notice of your intent to stop paying me and the non-compete will cease to apply as of the date of the last payment I receive from you.
Re:Will backfire HARD (Score:5, Insightful)
It's almost as if these free-marketeer cheerleader companies don't like free markets after all.
Re:Will backfire HARD (Score:5, Insightful)
On one level that is an interesting take, on the other hand trade secrets are thing, and not wanting undertake the expense of being a training program for another company who can afford to be a little more generous with salary because they don't invest in developing their people but just poach them instead is also a problem.
Traditionally its why you had apprenticeships, indentured arrangements but you anti-freemarket types already took individuals right to make such contracts.
Re:Will backfire HARD (Score:4, Insightful)
apprenticeships
Most union and trade jobs still have apprenticeships and there are no rules on the books that disallowes them, hell usually they're just called "interns", thing there are more rules against is you have to still pay them.
indentured arrangements
Guy who wants indentured servants to come back because "free markets".
Also non-competes and trade secrets are different things, even if it does get messy. Also I would say in a sense that coming forward with giving people sucha high salary increase that they will leave their existing job is a way of "developing people". The company that gives people training but they are easily pulled away with higher pay I would say has a talent development and retention problem, it's not the problem of the company offering more money. Pay your employees enough to keep them around and what they are apparently worth and you probably won't have to worry as much about poaching.
Re:Will backfire HARD (Score:5, Insightful)
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This is the correct "free market" understanding. If it's possible for Company B to poach employees from Company A, it only means that Company A is paying them below the market value of that employee.
That assumes that salary is the only thing of importance in a job, not job security, not benefits, not the marketability of the skills you learn, etc. My current employer plays slightly above average wages but ticks all the other boxes. We’ve had several people leave because they claimed to have ‘no alternative but take a new job that paid 10% more’ only to come crawling back asking for their old job back when their new employer downsized them two months into the next economic downturn.
Re: Will backfire HARD (Score:2)
Re:Will backfire HARD (Score:5, Insightful)
On one level that is an interesting take, on the other hand trade secrets are thing
Most non-compete agreements, even in tech, have little to do with trade secrets. I personally know the case of a ballroom dance instructor that was almost forced to move to another city to teach because his previous employer made him sign a non-compete when he was a lot younger and inexperienced.
Protecting intellectual property is a real necessity, but non-compete agreements as they exist in the USA are just a horrible tool used more for suppressing wages and competition than for protecting IP.
Re:Will backfire HARD (Score:5, Insightful)
If an employee REALLY knows any important trade secrets, they'll be paid accordingly or will have a mandatory gardening leave when they resign. In countries where that is the only way to accomplish it, most companies seem to find that most of their secrets don't actually have any real monetary worth at all.
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Exactly. Plus, most truly secret IP (that a person can remember) is only valuable for a limited time (eg. next product launch).
Some data sets might be long-term secret and valuable, but taking those is theft and protected separate from employment.
In the example above about a dance studio having a non-compete, it's purely protectionist. The dance routine and instruction method is inherently NOT secret - you have a class of people you demonstrate it to until they perfect it.
Re: Will backfire HARD (Score:2)
Maybe you need to provide better pay working conditions and benefits to your workers so you dont have to rely on lawsuits to keep them on your payroll?
Re:Will backfire HARD (Score:4, Interesting)
The thing about trade secrets.... they are a choice. These companies can always patent their recipes/methods/tech, which adds protection, but that comes with an expiration date and the tech becomes public. This is the tradeoff. When I was a boy, my father used to get a magazine of the latest patents. For an example of how this plays out and promotes entire sectors have a look at Lego and Megablocks.
Anytime anybody says "What about the trade secrets?" the answer is always "That's what patents are for"
Trade secrets are a strategic choice, and they come with the risk of the secret getting out in return for profiting off the tech until somebody else patents it- Which may be far longer than the 20 years a patent grants.
These companies want free market only when it's in their favor. Non-Competes are the opposite of free market.
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On one level that is an interesting take, on the other hand trade secrets are thing, and not wanting undertake the expense of being a training program for another company who can afford to be a little more generous with salary because they don't invest in developing their people but just poach them instead is also a problem.
Traditionally its why you had apprenticeships, indentured arrangements but you anti-freemarket types already took individuals right to make such contracts.
If only there were ways to keep staff in your employ that didn't involve legal threats. Things like better conditions, better pay or just treating employees with a bit of respect.
No, nonono, it's clear that we need to go back to economic slavery.
If someone is willing to leave for a few bucks more, you've clearly not treated them right (or perhaps not even as a human being). People have no loyalty to a company because a company has no loyalty to them.
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Hey, as long as it's crypto, right?
Re: Will backfire HARD (Score:2)
Re: Will backfire HARD (Score:4, Insightful)
Perhaps a good consolation price should be right to work at the federal level. A union should not have the power to coerce membership as a condition of employment to a third party.
How about a right to work that doesn't let companies coerce employees in ways that restrict their job opportunities and future employment?
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Perhaps a good consolation price should be right to work at the federal level. A union should not have the power to coerce membership as a condition of employment to a third party.
How about a right to work that doesn't let companies coerce employees in ways that restrict their job opportunities and future employment?
Wow - it's hard to believe you were downmodded for that. I'm guessing some corporate shill got hold of some mod points.
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It's almost as if these free-marketeer cheerleader companies don't like free markets after all.
These companies don't see themselves as being in the market - they see themselves as the market. When you hear them saying "we support a free market" you should automatically translate that to "we assert our right to do whatever the hell we want whether you like it or not".
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Re:Will backfire HARD (Score:5, Informative)
The non-competes will be replaced with far more consequential NDAs.
They will be just restrictive as far as who you can work for in the future because you won't be able to talk about anything you did/do in terms of your current job. Will make it very hard to get hired.
Every job I've ever worked in has had an NDA that prevented me from talking about anything I did, but that hasn't kept me from getting jobs. Companies know that they can't ask those questions during an interview, and must instead focus on evaluating the candidate's skill, rather than testing them on their résumé.
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And that works for most of us shoveling out LOB software that does boring things. It does not work if you are working on interesting algorithms or anything cutting edge.
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And that works for most of us shoveling out LOB software that does boring things. It does not work if you are working on interesting algorithms or anything cutting edge.
Which is fine since such agreements screw up a lot of people that do not work in whatever you think it is cutting edge.
Re:Will backfire HARD (Score:5, Informative)
[[Citation needed]].
For what it's worth, California already forbids non-compete clauses in employment contracts, and there's no sign that employers here are any stricter about NDAs than employers in other states. In actual practice, proving former employees have violated their NDAs is challenging enough that employers rarely sue, and suits are mostly over extreme cases with high-level employees.
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Re: Will backfire HARD (Score:4, Insightful)
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That said, I would also be happy to see most noncompetes nullified nationally.
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Because many people obey non-compete clauses even if they don't get sued. Enforcement is only part of the issue.
People do. Especially lower or mid-wage workers who simply don't have the education/background or means to fight back.
It's essentially the same with people who are fired for protected classes (e.g. pregnancy) from lower wage jobs. Plenty of them have very straightforward cases they'd almost certainly win ... but they virtually never pursue it. Same logic - they aren't equipped to fight a company so they just suffer.
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There are so few non-compete lawsuits because companies are scared enough of violating the non-compete agreements they never try. I personally know someone who is currently unemployed because nobody will hire him until his non-compete clause expires. That's the norm: a non-compete makes ordinary employees radioactive to prospective employers. It's absolutely a problem, especially for professionals in fields where any future employer is likely to be considered a competitor to their current employer.
Re:Will backfire HARD (Score:5, Informative)
This is the situation we have in Europe and it's perfectly reasonable. Workers can pursue their careers, whereas companies are covered in case of industrial espionage.
Of course you are not supposed to talk about confidential information you learned through your previous job. If a company would not hire you unless you spy on your previous employer, you should not consider that company to begin with.
And let's not fool ourselves here, non-competitive clauses are there to keep wages low, not for information security.
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The non-competes will be replaced with far more consequential NDAs.
So if NDA's are so much more consequential why arent they the norm? I'm not an expert on this subject (I've been lucky enough to spend the last 20 years working for a company I generally like and has never asked me to sign anything that would limit me on leaving them) but your post doesnt seem to hold up to casual reasoning. Of course maybe I'm not seeing something here.
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Ask yourself how difficult it is to know if a previous employee is working for a competitor vs a previous employee is disclosing trade secrets to that competitor. The first is very easy; just look up the employee at LinkedIn or his social media or Google.... The second is very difficult: neither the employee or the new employer is going to mention it. Maybe you can infer it from a new product coming out and sue--but this is very iffy.
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Yet another reason NOT to be on social media (like LinkedIn, FB, twitter, etc...)
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Yes, that would make NDAs less consequential then non competes though. I'm asking why the OP thinks they are more consequential.
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WOW!!
20 years with the same company? That's mighty rare these days.
I can understand if you like the place for sure, but, I'm wondering if you are making as much $$ as you could have if you had job hopped like most everyone does for the past 30+ years?
Honest question, have they kept raising your compensation over the years there for your loyalty and longevity?
Re:Will backfire HARD (Score:4, Insightful)
FWIW, I could have made more money at the place I worked, but I didn't want to move from programmer/analyst, which I was good at, to management, which I would have been lousy at.
Money isn't everything...unless you don't have enough.
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I have to disagree with you somewhat.
I mean, the only reason we work, is to make money to support our life/lifestyle for ourselves and our families.
And shy of being insanely rich....you can never really have too much money for that.
That reminds me, gotta buy my Megamillions ticket for this weekend's drawing...almost a billion dollars.
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I can understand if you like the place for sure, but, I'm wondering if you are making as much $$ as you could have if you had job hopped like most everyone does for the past 30+ years?
Honest question, have they kept raising your compensation over the years there for your loyalty and longevity?
Totally appropriate questions nicely asked!
I probably could make more money elsewhere, my benefits are fantastic though. 5 weeks off a year, a significant amount of free stock in a company which has had continuous growth for the last 30 years, management who generally interacts with employees very well (I genuinely like my direct boss), decent (admittedly not amazing) growth potential, and it keeps me living in the county I want to live in with a nice short commute so I'm not wasting hours of my day just ge
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Very interesting.
That's something you just do NOT encounter very often in today's work environment.
In my parent's day, or maybe slightly before....job for life was pretty common. The company was loyal to employees and employees felt the same towards their employers.
Today, for the most part, unless you have a mercenary mindset, you won't advance in your career or pay.
Anyway, I digress...good for you my friend.
Glad you found something that is quite rare today.
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I am a bit lucky in that I'm actually happy with my job. I do resent our country's typically pathetic allotment of vacation time though as that makes up a significant portion of why I stay with the company that I'm at. The fact that landing anywhere close to the amount of vacation time I get now is extremely unlikely if I changed employment does limit my job mobility some.
My old boss at this same company had a great phrase, "we work to live, not live to work". I only have so much time left before I'm elderl
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I do resent our country's typically pathetic allotment of vacation time though as that makes up a significant portion of why I stay with the company that I'm at.
Same here. I quit a job that gave me a bit over 4 weeks of vacation a year, 96 hours per year of sick time (up to nearly 500 hours total accrual), 2 weeks per year of paid holidays, two great retirement plans, and misc. time benefits, to a job that paid 30% more, but that had only 2 weeks per year of PTO. During that week, I realized the job sucked, the management sucked and, my hair started turning gray due to stress (and I was only 40).
I stayed at the new job for a week before calling my previous employer
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I suspect I may end up retiring from the company I work for as well.
Cheers to good employers! Everyone should be so lucky as to have one.
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Good for you on all that time off! It's just stupid that in a society as affluent as our own that so few people have meaningful amounts of time off from work.
Really what it comes down to is once you hit a certain income level there becomes a lot more that is important than making even more money and that threshold doesnt have to be some crazy high number if you manage your money well. I've met people in this world who are far more affluent than me but all they do with their lives is work and all I can think
Re:Will backfire HARD (Score:5, Informative)
Also slashdot editors, please stop linking f@#$ing NYtimes. Nobody wants to click and immediately get paywalled.
some workplaces have used NDA's to stop pay talk (Score:2)
some workplaces have used NDA's to stop pay talk but that is an labor law issue (they can't do that) as it trys to stops union talk.
Re:Will backfire HARD (Score:4, Informative)
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Thanks very much for that - it worked perfectly with the link for TFA!
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Also slashdot editors, please stop linking f@#$ing NYtimes. Nobody wants to click and immediately get paywalled.
Other people reading the news so you don't have to is kind of the formula here.
Because nobody wants to talk about THIS
https://www.ftc.gov/legal-libr... [ftc.gov]
"Functional test for whether a contractual term is a non-compete clause."
They want to talk about the magic super-NDA-non-compete loophole that they alone could think of and repeat second, third hand information about what someone said about the rule instead of reading it.
*SPOILER ALERT* (Score:3)
"A non-disclosure agreement between an employer and a worker that is written so broadly that it effectively precludes the worker from working in the same field after the conclusion of the worker’s employment with the employer."
See? There isn't much to talk about when people actually read or do one minute of research.
Sorry, back to regularly scheduled hyperbole and whining about the news.
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I am in favor of NDA's
While the US just bends over backwards to appease corporate overloads and rich people compared to every other country in the world, I do think some corporations do have rights as well. Protecting their expensive IP investments should be one of them. Especially if investor money was used.
This solution will give workers the rights to leave if they are treated unfairly but leave corporations the right to protect their investments. Both parties win.
NDA is rarely ever used as a reason not t
Another issue is they have no exceptions, restrict (Score:2)
I read the proposed rule.
It completely fails to recognize any of the many exceptions or restrictions that absolutely make sense. For example as written, three months after Coca Cola hires a new CFO, Pepsi can make her a slightly better offer - and thereby bring in very valuable info about Coke's operations and plans. While inflicting a little damage on Coke as a bonus.
It absolutely makes sense to avoid having DIRECT competitors immediately poach top executives, certain researchers, etc.
A rule written in goo
Re: Another issue is they have no exceptions, rest (Score:2)
Re:Another issue is they have no exceptions, restr (Score:4, Insightful)
For example as written, three months after Coca Cola hires a new CFO, Pepsi can make her a slightly better offer - and thereby bring in very valuable info about Coke's operations and plans.
What? First, this new rule doesn't get rid of the concept of 'term of contract', and I'm guessing Coca-Cola doesn't hire a CFO for three months at a shot. Second, that would be a ticking timebomb of litigation for Pepsi if they pop in to induce that CFO to breach their contract with Coca Cola. Third, this doesn't get rid of the entire concept of NDAs, just overly broad ones, and this sort of obvious ploy would be very damning evidence at any trial - something, again, that Pepsi would have to worry about as the one interfering with the contractual relationship between the CFO and Coca Cola.
Furthermore, that CFO had best think long and hard about accepting this offer, as even if it somehow doesn't blow up in everyone's face (and it definitely will), there is very little reason for Pepsi to continue employing her once they have secured the desired information. She has already demonstrated a willingness to sell her knowledge to the highest bidder, so they can't very well keep her around and let her learn Pepsi's business, or Coca Cola can just turn around and rehire her at, again, slightly more, thus securing Pepsi's business secrets. They have no further use for her, and nobody else will be interested in hiring her, given her prior behavior. She just took a one-time payment in exchange for lifetime unemployability.
Companies don't hire for sensitive jobs the same way McDonald's hires people for the drive-thru. They don't look over an application you filled out on a portal, make sure you spelled everything more or less correctly, then hire you. You have to have established some level of reliability in the past. Once you burn a company once, you are back to working the fryer.
The only value added to the process by non-compete agreements is the ability to underpay workers, safe in the knowledge that they cannot go elsewhere to earn more.
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First, this new rule doesn't get rid of the concept of 'term of contract', and I'm guessing Coca-Cola doesn't hire a CFO for three months at a shot. Second, that would be a ticking timebomb of litigation for Pepsi if they pop in to induce that CFO to breach their contract with Coca Cola. Third, this doesn't get rid of the entire concept of NDAs, just overly broad ones...
Fourth, and most importantly, C-suite executives are subject to a whole raft of extra rules us plebes never see, and that isn't going to change regardless of what the FTC does about non-compete clauses. We hear about the golden parachutes without ever considering why there's such a thing as golden parachutes.
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The non-competes will be replaced with far more consequential NDAs.
Let us pretend that non-compete are already banned in California, and that other developed economies already have means to deal with them effectively.
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There are states where non-competes are not enforceable. We do not have your NDA strawman in those states.
So (Score:4, Interesting)
About 15 years ago I left my job at Northrup working on weapon system software for a certain stealth bomber. I had a secret clearance and a huge list of things I could not talk about. However my next job interviews they asked about tooling (software ) languages , what CI server we used for builds etc. So it was not a big deal. If another company is hiring you just to steal knowledge from your current company do you really want to work there ? You should be able to answer question about what languages you used, source control all the usual questions. If Cloud Technology is relevant like OpenShift Kubernetes etc. I don't see a ND agreement as issue. I didn't have to sign one, however my ND was knowing if I talked about things I wasn't supposed to and it got out then I was looking at some kind of legal issue that would have to resolved in Federal court. ND to me are much easier to work around than the old non compete ( which was total BS).
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The non-competes will be replaced with far more consequential NDAs.
NDAs dont prevent you from working with other companies, just talking about the details. I have signed dozens of NDAs over 2 decades of software and VFX work; I have only signed a non-compete a single time -- when the company I left had created a unique process and didnt want it leaked for a while.
NDA != Non-Compete.
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Or companies could rely on carrots to retain employees.
1. Much higher pay for truly important individuals.
2. Long term incentive pay at levels that make employees second guess leaving.
3. Better culture to fix whatever is motivating people to leave (restrict meetings, clear out toxic bosses, reasonable work loads, etc).
4. Meaningfully grow your employees (I had pitifully little professional development opportunities in my 24 years of employment).
5. Pay people at least as much as you pay your new hires, and p
Re:Will backfire HARD -- so will follow-on laws (Score:2)
Anytime someone has tried to get around a law via a different mechanism, they've found those different mechanisms made illegal as well. If NDA's have the same effect as non-compete agreements, you can be sure they will be neutralized as well.
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"Boomer thinks the job market is exactly like it was when he was still working."
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Re: You're all niggers now (Score:2)