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[return to "New York may ban noncompete employment agreements and Wall Street is not happy"]
1. ajb+d7[view] [source] 2023-11-18 09:21:34
>>pg_123+(OP)
After noncompetes, they should go after non-solicitation. Entire teams that work well together should be able to defect from shitty employers. It kind of happens anyway but on the quiet, inefficiently - I'd love to see a job website where you can list an entire team.
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2. cj+di[view] [source] 2023-11-18 10:56:45
>>ajb+d7
Non-solicits also include not soliciting customers.

Which is particularly relevant at consultancies where the product is a service.

If you join a consultancy group, and 2 months later quit with the client roster... is it really OK to poach all their clients to start your own consultancy?

All of these contracts are time limited, FWIW. E.g. non-solicitation doesn't mean you can never work your your colleagues again. It protects against someone leaving and then immediately poaching all employees within 12 months. After 12 months you're welcome to poach as much as you'd like.

Edit: Furthermore, non-solicits don't ban your colleagues from quitting with you, as long as you're not directly asking them to quit. If they make the decision independently without being lobbied by a former employee, it's not in violation of non-solicit.

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3. lordna+Av[view] [source] 2023-11-18 12:33:19
>>cj+di
> All of these contracts are time limited, FWIW. E.g. non-solicitation doesn't mean you can never work your your colleagues again. It protects against someone leaving and then immediately poaching all employees within 12 months. After 12 months you're welcome to poach as much as you'd like.

For me that doesn't change anything. You should be allowed to tell your customer to come with you to a new business, the next day.

Companies know perfectly well that most of that value of the relationship is gone if you have to wait a year, so they pretend that time limiting is somehow reasonable.

The free market actually needs to be free.

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4. cj+HB[view] [source] 2023-11-18 13:17:56
>>lordna+Av
Say you join a startup. They get some early traction and they have 5 customers paying $5m/yr for a technology platform. Let’s say it took $20m in R&D and marketing to get the product built and to land those 5 multi-million dollar accounts.

Without a non-compete and without a strong IP clause, a handful of employees could very easily steal the IP and steal the client list, start a new company, offer the same product for half the price, and convince the 5 clients to come over to the new “half price” company. Putting the original company out of business. The new company employees are excited because they stuck it to the man by burying their prior employer. Fast forward 2 years, and the same stunt is pulled against the new company, and the cycle continues.

What happened was the stealing of IP and customers that cost $20m to acquire, but because you stole it you didnt have to pay that $20m in R&D and can offer the price for half off to get clients (whose contact and details have been stolen from the prior employer) to follow you to the next company.

Assuming you think this scenario is ethically wrong (maybe you don’t?), can you explain the type of contract the original company should have with their employees to disincentivize this scenario? If everything is left unchecked, there’s huge incentive and easy pathway to screw over employers for short-term gain.

Hell, if we take it to the extreme and get rid of NDAs, what’s stopping a random call center employee from selling a company’s client roster to the highest bidder?

Free market, yes. Unquestionably free market with no regulation, not going to work.

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