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New York may ban noncompete employment agreements and Wall Street is not happy

submitted by pg_123+(OP) on 2023-11-18 08:17:45 | 596 points 389 comments
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35. chiefa+Mj[view] [source] [discussion] 2023-11-18 11:09:58
>>quickt+we
True. But the way The System works isn't WS v WS, it's WS v Everyone Else. WS doesn't want to waste time and energy hurting themselves. They know better. They behave more like starlings. No conspiracy per se, just mutual interests that align strategy, tactics, direction, etc.

https://youtu.be/V4f_1_r80RY?si=e-niFwrb-QeE4oDU

54. currym+Ep[view] [source] 2023-11-18 11:53:31
>>pg_123+(OP)
i'll post one of my favorite related facts about noncompetes. Famously, California bans them, but this was not an intentional policy choice for the sake of entrepreneurship. It was done in the 19th century and almost by accident.

David Dudley Field II was a jurist who drafted a code of laws which was adopted by New York state. After this, motivated by his study of English common law, he made an updated code of laws which included a provision banning noncompete agreements.

This model code was not accepted by New York, and just floated around for a while, until it happened to be on hand when California was becoming a state, with nobody thinking much about noncompete agreements.

North Dakota also adopted the Field Code and also bans noncompetes.

https://www.restrictivecovenantreport.com/2013/01/north-dako...

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116. wslh+oF[view] [source] [discussion] 2023-11-18 13:36:01
>>GuB-42+lv
NCCs are very well explained in [1] and USA has differences by states.

[1] https://en.wikipedia.org/wiki/Non-compete_clause

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168. bastar+G01[view] [source] [discussion] 2023-11-18 15:44:37
>>malux8+WT
I'm sure one can find plenty to say about this in the Ferengi Rules of Acquisition that probably sum up even our corporate insanity best. https://memory-alpha.fandom.com/wiki/Rules_of_Acquisition
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170. avar+c11[view] [source] [discussion] 2023-11-18 15:47:44
>>sgift+6Q
If you (or others) haven't seen it you owe it to yourself to see the "Larry Ellison lawnmower" talk: https://youtu.be/-zRN7XLCRhc?si=SMpYPck-EJqe1uEv&t=35m00s
172. Dowwie+h11[view] [source] 2023-11-18 15:48:13
>>pg_123+(OP)
Evidently, Obama campaigned on promises to protect low-wage earners from employer exploitation using non-competes. Politicians seem to be more in favor of advancing non-compete protections only for this demographic.

Some good articles about non-compete politics in America and the de-fanging of the FTC federal initiative:

https://news.bloomberglaw.com/daily-labor-report/ftcs-noncom...

https://www.bloomberglaw.com/external/document/X3B1QI9O00000...

https://news.bloomberglaw.com/antitrust/ftc-expected-to-vote...

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254. driveb+kv1[view] [source] [discussion] 2023-11-18 18:21:50
>>vachin+Jo
Lawsuit is common.

https://www.washingtonpost.com/business/2023/03/10/noncompet...

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348. bobthe+cG2[view] [source] [discussion] 2023-11-19 01:12:54
>>LeifCa+qo2
You can certainly pay them the duration of the noncompete at their prevailing wage.

In fact, this already exists. https://en.wikipedia.org/wiki/Garden_leave

It really should be required of all noncompetes.

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374. eru+uw6[view] [source] [discussion] 2023-11-20 03:32:28
>>Paul-C+Rr
The unemployment rate in the US is near record lows, so there are plenty of alternatives for most people. And: your government spent about 22.7% of GDP on social expenditures (in 2022, the latest year I have data for). See https://www.oecd.org/social/expenditure.htm

You have a hard time convincing anyone that the choice is "take this job or die" for most people.

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387. bumby+nCa[view] [source] [discussion] 2023-11-21 01:39:08
>>caskst+RL9
All of this has already been covered in this discussion. It's tiresome to rehash it.

>It obviously proves that NCA is not required

Already stated: "Non-competes and NDAs are literally the mechanisms that companies try to protect their trade secrets."

To wit, look at what lawyers say are some takeaways from this case:

"Require employees to sign nondisclosure agreements (NDAs)."[1]

Now why would a lawyer say that? Because contracts are easier to uphold in court. But that's already been stated:

"The reason is that these contracts help protect the IP by explicitly stating their case."

And guess what happens when you combine an NDA with inevitable disclosure doctrine? A prohibition from working with a competitor. But that's already been covered here too:

"The short answer is "inevitable disclosure doctrine" that prevents you from working for a competitor if it's inevitable that you will disclose trade secrets. It's a sticky wicket for engineers."

>Doesn't exist in Cali, same as NCAs.

I'm sorry, I know HN tends to be in a bubble, but at no point did I claim California as the sole scope of my comments. Actually, I did the opposite by citing other states, like Illinois regarding their $75k threshold. Regardless, there are still provisions that provide similar relief in CA, like the UTSA.

>This is not reddit.

Ironically, it's your comment that goes against HN guidelines:

"Please don't post comments saying that HN is turning into Reddit. It's a semi-noob illusion, as old as the hills."[2]

>Where did I said it does?

Literally, your original comment I was replying to makes the claim that knowledge equates to deserving more pay:

>"If knowledge of some particular employees worth so much to the quant firms, then they should pay them not to leave accordingly."

We have mechanisms for determining who gets paid from that knowledge. It's an IP license.

>NCAs are usually blanket poorly-defined

I guess if your threshold is poorly defined contracts, then no contract law is relevant. But its a strawman to point to badly formed NCA as a rationale to ban them completely. I'm talking about good contracts, with a meaningful purpose to protect trade secrets. See any of the previous posts to this effect. If your claim is that bad NCAs should be banned, I'm with you. This, however, is not about that.

>What does it have to do with the salary?

As already discussed, contract law is completely about convention and can be changed:

"IP rights are legal rights of convention."

It's relevant because the convention used by IL is that an NCA for an employee below that threshold is "void and unenforceable." In other words, it's not a legal contract.

The fact that you railed against all that despite already being shown while it's wrong and resorting to statements like "it doesn't make sense to me" tells me this is more about you proselytizing than having a reasoned discussion.

[1] https://www.jdsupra.com/legalnews/protecting-trade-secrets-l...

[2] https://news.ycombinator.com/newsguidelines.html

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