zlacker

Non-competes have only ever made sense where the employee is compensated for signing. Codifying this change would immediately make companies stop with blanket non-competes, and only have them on key people.

While not impossible, non-competes without compensation are already hard to enforce as judges don't look kindly on preventing people from earning a living. The problem is the asymmetry of power let companies bully and intimidate ex-employees.

>>matwoo+(OP)
I mean yeah that's the point I made? FWIW, trading firm noncompetes are almost always compensated with the base salary and they're still blanket applied. A major contributor is that the employer is only paying a fraction of the true employee compensation, making it easy to blanket apply and creating a form of golden handcuffs.

>>vgathe+i
They're not applied as widely as it may seem. The terms are typically "up to" the length of time, and in practice firms waive 50-100% of the non-compete length pretty frequently, which is a decent sign that the cost is non-negligible. It is a bit tricky not knowing until you quit how long you'll be held to it, though.

>>matwoo+(OP)
If judges start to throw out non-compete agreements that don’t have separate compensation (apart from usually salary/experience), then you will just see companies explicitly write their contracts such that that X dollars are explicitly for the non-compete agreement.

At least in some industries, however, there is a consumer protection/public policy argument against non-compete agreements, where: (1) there is no legitimate property interest to protect (e.g., the “trade secrets” held by the companies aren’t trade secrets at all because every company in the industry knows them), and (2) it is bad for consumers/against public policy to allow companies to use non-compete agreements to stifle competition where there is no legitimate property interest to protect.

>>matwoo+(OP)
Yeah, they should be obligated to pay for the length of the non-compete. 1 year? Okay, you're paying me for a year.

>>bdowli+c51
Some states create salary thresholds. For example, Illinois law states they won't enforce non-competes for anyone making less that $75k or non-solicitation for anyone below $45k. However, companies are still protected by non-disclosure agreements for important trade secrets.