FTC bans non-competes: a business owner's thoughts
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- Äas pĆidĂĄn 25. 04. 2024
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You do point out the one real concern companies legit have with non competes- stealing employees that a company has trained, as the cononay doing the stealing can afford to pay more because they dont have to pay someone to train the employee. *shrug* probably not enough of a concern to keep non competes, though.
There still needs to be rules regarding IP, client and supplier lists, etc, of course, but that isnt the same thing as non competes.
Also, obligatory complaint about an unelected bureaucracy being able to, in effect, create legislation.
Companies don't train anymore. That's why they have master's degree preferred bachelor's degree required with six years of experience in order to make $50,000 on every job ad nowadays. Or nine years experience master's degree required to make 85,000. It's ridiculous.
Find me a job on indeed or monster that actually trains you. For every one of those, there will be 1,000 that expect you to show up $80,000 in student loan debt with 10 years of experience working God knows where because nobody hires you unless you have any sort of experience anyway. That's a meme in 2024.
This is a made up scenario that holds no water with a single second of thought. And if it has happened, the organization that's constantly losing employees after training is ran by complete morons---a business model of constantly turning around trainees means little product is generated. If you're constantly having your workforce poached instead of throwing a temper tantrum like a spineless child with a very antithetical non-compete clause, maybe try _competing_ to keep those employees happy so they stick around.
If the FTC has the authority ban non-competes under existing law, I'm not sure why Obama was asking states to ban them in law back in October 2016.
If his FTC thought it would survive court challenges, I'm sure he would have just had the FTC ban them before he left office.
I think that a ban on overly broad non-competes and non-competes for fast food workers and other low level employees could be upheld as regulating unfair competition
The FTC does have this authority and there is ample evidence that they are being used to restrict normal competition
A complete ban on non-competes, including narrowly tailored non-competes for executives seems like it will get overturned in the courts.
I would love to see both state and federal laws banning them
companies training thats a laugh
I get it, but, call me stupid, but if my employer had trained me, I would have enough respect for them to stay (at least for a while). Of course, the best employer would also continuously bump up the salary as the experience grows, as it should be. And then it wouldn't be a discussion.
My wife was threatened with a lawsuit when she got another job, and her noncompete clause said she couldn't work 7 miles from the first job. The map said it was 7.1 miles from her former employer. Their lawyer claimed it was 6.8. We lawyered up, and they did nothing with it. Non-compete clauses are nothing but ammo for vindictive former employers.
That's just messed up.
It's never been legal, simple logic, the contract is null & void once your fired or quit, you can't be bound by a contract your no longer in, common sense. A non compete only applies while your hired.
It's a work contract, if your not working for them there's no contract.
@@exxe2454Pretty sure stuff like NDAs still apply, don't they?
@@Content_DeletedNDAs can be enforceable, non-competes are usually a joke but they like to bundle them together and make it hard to wriggle out of
@@Content_Deleted No actually, & don't let a lawyer tell you otherwise, a contract is only valid if it has a proper termination clause that let's either party leave whenever they no longer see the contract as mutually beneficial thus releasing the other party from any benefit/debt they may owe you while also repaying off any debt you'd otherwise still have to them & vice versa if they want to terminate without cause, they pay you what's owed & you don't owe then anything afterwards.
Hence an NDA only applies so long as both parties are gaining something of mutual beneficial in perpetually year after year say for example "knowledge", access to the database holding that knowledge would be valid, but once it's in your head that's a 1 time transaction, so if your not paid year after year to keep that info to yourself or if they refuse to increase that pay as you request then you can void it by default.
Arbitration should be banned too
Arbitration that excludes class action for sure. *Binding* arbitration should be banned.
And DEI hiring
@@Zagirus You're in luck. DEI hiring just got illegalled by the SCOTUS last week.
@@Zagirus D.E.I could work if they included ex-cons but it's really just a woke tool.
Well, forced arbitration
What do you mean I can't hold a monopoly anymore??
You can if you hold State-Enforced Patents and "IP" and have the Federal Reserve steal from the drones to give you access to easy "capital".
Oh, you CAN hold a monopoly, but you have to do it the old-fashioned way, by buying all of your competition, and sending dudes with pickaxe handles to "persuade" those who won't sell to get out of the business.
@@MonkeyJedi99 the old way is still technically illegal, but this is not been enforced in decades
@@marcogenovesi8570 centuries
@@marcogenovesi8570 that's actually been changing. haven't you noticed all the big mergers being blocked by the us government recently? biden's ftc is by far the best thing about his administration.
If a company says i can't get a job with another employer, then they shouldn't be able to hire someone else if they fire me.
In Europe, they can't. They can't fire you unless you've done something wrong. If they have to let you go for economic reasons, they have to pay. If they then immediately hire someone else for the same job, it means that the original dismissal was unlawful as the job has to become defunct when you do.
What is it about the USA that any of these things are actually real ? I don't get it.
@@quantisedspace7047 it's the same thing behind why every tax cut for the ultra-wealthy and mega-corporations is celebrated - far too many people believe that "if I just work a little harder..." they'll be the oppressors instead of the oppressed. There's a lot of money involved in keeping people under this delusion.
â@@quantisedspace7047 it's not a developed country
â@@smugler1The UK is currently transitioning to undeveloped status. We still have some rights but as of a few years ago employers may fire their employees during their first 2 years of employment without notice or recourse.
Not the same thing
The non compete my friend was forced to sign prevented him from opening up his own business in the field until at least a year had passed after he left the company he worked for. Not even being able to work for another company in the same business is even worse. The same company had forced arbitration as well.
Banning non-competes is very good news indeed. They should ban forced arbitration next.
Hard agree on that last statement. Forced arbitration is like the next stage of this corporate cancer.
i think non competes should be okay, if they are required to pay full or 90 % of the normal salary of that employee, for the time of the non compete
Companies who have Non competes should be made to buy their way out of these situations. Give them a deadline and a penalty. This would punish those with them. It might also stop bad business practices that might be considered like forced arbitration to be targeted next.
Can you please explain forced arbitration to someone who knows nothing about it?
@@JustfknBillitâs a internal lawsuit/internal court case with a typical retired judge.
so itâs like a normal lawsuit but solely for the company; and the arbitration is 97%+ for the companyâs favor.
I was scrolling through a Fox News comment section on an article about this. The sympathy some people have for faceless corporations never ceases to amaze me.
Neo-con boomers.
Boomers are crazy. They complain about wokeness being shoved down their throats and then fellate corporations. It's wild.
They're kool-aid-drinking bible thumpers, it's what they do
why are you giving fox, or any corporate press clicks. Use archived links.
They're not people, they're bots.
I worked at a pizza place (super toxic and abusive managers) one of the chefs saved his money for two years and opened a pizza place that was not even remotely similar one town over. The place i work sued him and used the non compete we had to sign to win. Well the judge ruled in the places i worked favor, and in their non compete it stated; we'd have to cover legal fees, emotional damages etc etc etc... Poor dude lost his life savings just because he opened a pizza place. đ€Š The managers kept bragging about how they ruined the dudes life. đ€Š was so glad when i quit.
That is ridiculous
This type of stuff requires a direct action karma correction.
If that happend to me, someone will die
No wonder it's so hard to find good pizza places
People don't realize how dangerous someone with nothing to lose will be.
I signed a non-compete when I sold a business. It seemed perfectly reasonable to ask the person selling you a business not to compete with you immediately after the sale, however it seems unreasonable and unethical for a company to ask their employees to sign one.
Pretty certain this ruling excludes executive positions (which being the owner of a business is) for your reason and company-exclusive knowledge, the ban is for employees
This ruling specifically excludes people selling a business
Here in EU, as I understand it, non compete means I can't start the company and take away clients, I can go and do the same job for a different company and I can start my own company for as long as I don't contact clients from my previous company to get my services instead. It is beyond unreasonable and unethical to not let workers switch to another company.
I had a company put a 1 year non compete clause on my offer. I asked them to either remove it, or add a parallel clause stating that in the event that I am laid off or fired, they would agree to not hire anyone to do similar work to mine for 1 years. I didn't want someone else to benefit from any systems, processes, or code that I provided to the company prior to my dismissal.
And guess what.... they did neither and I turned down the offer.
Was a #*$% company anyway.
1 year non compete? ouch
i think it would be okay for 3 (maybe 6) months, if the employer has to still pay you, while the non compete time
I would ask to be paid the full salary for that non-compete period. It's alright if they don't want me to work anymore, but they ought to be responsible for me while I am still bound by them. Luckily, I do live in the EU where workers' rights are a fair bit different.
if they want you to be unable to work for 1 year if you leave their company, no problem. they just can pay you for that year :) seems fair
The problem is, even if they agreed to your terms, it's much easier for a company (and gets easier, the larger the company is) to hire someone with a slightly (or even completely) different job title and still have them do the same work as you.
@@houserhythm that is why you demand full pay for that period, then they have to pay two people to do that job.
There is no reason a fast food worker should have a non compete.
Americans need to thank Lina khan. She's the only democrat working for you.
I am willing to go out on a limb by saying this: *Non-compete stifles innovation!*
FCC also restored Net Neutrality today
Interesting times...
â@@xdjrunner didn't know this, another great news đ
â@@Operational117 I mean yeah, if competition is supposed to bring innovation, anything literally made to prevent competition is also stifling innovation. This is also why I have a problem with copyright/patent systems, they can prevent innovative products from being made because some other random company owns one of the pieces needed to solve the puzzle. But that's a whole other discussion. (Obviously I think the inventor of something deserves to be compensated, but maybe there should be some requirement that it's always licensable for some reasonable price.)
Non-competes have never been applicable to unskilled or low-skilled workers. They are only enforceable in very limited circumstances and have never been able to stop anyone from going to work for a different company.
Treating employees right. That phrase to many employers is like garlic to a vampire. Non-compete have some place, but for people working in non executive positions it should not be permitted.
I think using it to protect trade secrets is also acceptable
@@maxscott3349 Non-compete is about competing, not about keeping secrecy. That should be part of employment contract. At least I would have formulated it that way.
@@Yulrag Yeah and ideally that would be enough, but I think there are a lot of situations where a non compete really does make sense. For example, I heard about this company that makes a part for way less than anyone else can, and noone can figure out why because they pay six figures and make people sign some kind of contract before they even see the process. It's probably just a workholding thing, and I can see someone letting the cat out of the bag completely unintentionally just by doing something similar on a different part.
@@maxscott3349 There is something called non disclosure agreement, it serves to protect such information.
It should only be permitted if the worker is privy to some top secret information (and that should just be covered by an NDA and/or patent, anyway).
This man is my president
If he becomes President, Iâll be the Vice President and bring all those corrupt corporations down!.. meaning 75% of all corporations. Lol
He should be president!
No way! We want him instead!
â@@Timely-ud4rm He would then go fully bald
I want to be Vice President to send corrupted companies to the ground. And 75% of them are corrupt!
A company could lay you off or fire you and still have a non-compete stop you from getting a new job in your field which is straight evil, period. Non-competes only benefit corporations that the past few years have proven to be abusive.
Ooh, an evil plan just formed in my head.
Malicious Incorporated hires everyone with the skills for the jobs they have, gets them to sign non-competes, then lays them off to hire the next ones.
Soon, they have hostage all of the potential employees for any of the jobs they operate, and then they hire some of them back at lower pay rates, perhaps even as low as minimum wage.
Keep them working for a few months, let them go (with the non-compete) and hire the next wave.
Timed right, you will OWN the regional labor pool without even having to pay all of them at once.
@@MonkeyJedi99 And then those employees sue their former employer for wrongful dismissal since the either they weren't bad at their job, and they weren't redundant. ;)
@@richardpayne I didn't say it was a smart plan, just an evil one.
Maybe in the movie about it, the employees could be led by a dancing lawyer. Kevin Bacon, perhaps?
Try: "past few centuries"
True! We need a working class revolution and a new set of elected people in Congress!
Non-competes are rarely enforceable but company's will frequently tie former employees up in legal fees instead, which is typically just as effective. I'm happy to see this practice end.
What I've always said is that if you want your workers not to go work for a competing company, pay them better and treat them better. They won't leave if you stop making them want to leave.
Yeah we need a loser pays legal system too
Well, no. I had a small construction company. Many experienced employees just get bored. They leave, go to another contractor they worked for before. They stay there a while, get bored, rotate to another contractor, bored and back to me again.
It may seem strange, but it is quite common. No problem for me or the employee.
It also kept me with a set of these employees who had high morale. Happy people make unhappy people happy again.
This is a nice idea in concept but in practice difficult to achieve. I'm paying my engineers 40% above market salary, straight time overtime, full health insurance for their family (unheard of in industry, its a 20% of salary value benefit) and I double side pay for their 401k match under SafeHarbors (I pay their contribution in addition to the employer match). It takes me 24 months to train them, and I'm having a 30 month average turnover; and we aim for them to work 48 hours per week or less. I'm getting maybe 32 hours per week out of them at most, usually between 22-28.
They leave, take our inhouse IP, book of business contacts, and try to hang their own shingle and try to undercut me.
@@dunxtonchexton1631 Without any disrespect, it sounds to me like you might be thinking like either an employee or a charity. Watch Bar Rescue re-runs to see how well either works.
My suggestions:
drop all of these extra benefits and salary.
Demand that they work 40 hours. Any complaints, fire someone in a meeting with the whole group.
Separately from my above suggestion, go fire someone tomorrow!
I don't know your exact situation or local laws, but you need a spy or surveillance of some sort. Might be a good time for a really good cleaning or some BS repair work that takes a week. If you are losing so much $$, you can afford to pay 2 people to fake it. One of my very very most bestest employees simply could not run the crew for an hour while I left to go take care of other things. I definitely kept him, but not in a supervisor position. So with some inside information, you might be able to "fairly" judge each person instead of guessing.
Finally, if you want to extend really good pay and benefits, demand something in return. Start with a time period. Say maybe after three productive years, they get one of the good benefits. Then one year later, they get another.
The global economy is about to crash so badly that the Great Depression in the US will look like "fun". So get things worked out right now, without delay or you might suffer the pain of a failed business. Sucks, but it's a fact, not a guess. I suggest you sit down and write up the rules you would expect yourself to carry out if you were working for yourself or else would fire.
Be nice, don't ever yell or lose your temper. Having to fire someone hurts emotionally. That will go away after a few times.
I lost my business when I started to have near lethal seizures suddenly. It really does hurt to lose it all. Good luck.
That's very nice of you to look out for your employees.
It's like a butterfly effect. Higher wages allows your workers to afford a house or take care of their kids better.
This is the fundamental misunderstanding. It's not nice. I'm not being nice!! I'm bribing them to leave their current job and look after my business.
Still a win-win
@@rossmanngroup money moves
One person's "nice" and another person's "mean".
So yeah Louis, it was very malicious of you to look out for other people's -property- people.
Now they won't have the same horse to work to death for the glue factory, now they have to stop relying on their top talent that they've become dependent on. Like a Catch 22.
Well I was writing a reply but this new CZcams ad system stopped me from pausing like one word before I completed so here I am rewriting wasting time because the wanted to advert me an otc allergy med when I already take one covered by my insurance. This behavior actually links to what I was originally trying to comment on which is the whole anchro capitalist movement to supposedly start your own if you donât like it example in this case was an isp but companyâs like comcast who like to flaunt there excellent ratings and only have those ratings because they are a monopoly in all but the slimmest legal since setting up laws as much as possible to prevent people from setting up there own isps or isps as a utility. In the same way these media companies with ads go how far can we monetize everything and remove every scrap individualism that might eat our bottom line while refusing to carry adverts anywhere for our competitors that anyone can see effectively eliminating competition since the control the only known viewing channels it is kinda of hard to learn something exist if you only can see ad for at 4am on a 2â screen through a basement window downtown on the third Friday every three months which is the only spot they will sell you because it is all the legally haft to do setting up independent isps or ISPs as a utility is like that currently.
When I first learned about non-compete agreements, I honestly thought this was a joke and couldn't be true. That was just intuition. I'm glad it was struck down.
FUCKING GENIUS. "I am in favor of taking away the freedom of someone to take away your freedom." I was wrestling with how to fit this new law into my pro-business and somewhat Libertarian framework. This is the answer.
Exactly the same philosophy as being intolerant of intolerance. And not that I'm a loon, but also the same idea that for peace to be protected, violence must be met with violence. You have to protect what you have, or it will be taken by those who don't care
Why does it have to fit into your pro-business, libertarian framework? Why can you not just accepts that no single political philosophy has all the answers and it'd be crazy to think it does?
I mean that's how banning slavery works.
â@@joepieklthis. It is SO sad to see adults agreeing to everything a political party/ideology/doctrine says. Use your brain, think for yourself what is right and what is not on each topic individually.
@@cryora It is also the logic behind most state power. It is the justification for the existence of police, courts, business regulations, and even the Welfare State. All are layers to liberate the individual from petty tyrants, who are potentially numerous and mortally endanger any meaningful freedom.
It really hurts contract employees also, if the company you are contracted to decides they like you as an employee then if you have a non compete you are stuck.
My company uses a lot of contract labor. On several occasions, we were able to convert those contractors to employees through negotiations with the contracting company. Basically, make them an offer to release them so we can hire them. Kind of a win-win situation. Also, we just bring on a new contractor from the company anyway, so they don't even loose any recurring revenue.
Well fortunately, non-competes are illegal now as I understand it, so it's not binding now.
@@dangero2000 yes, in 112 days. it takes time to be in effect.
â@@Sunrise-d819i2pretty sure the chamber of commerce and other business organizations would fight tooth and nail against it.
i worked as a tech for an hvac company that tried to have us sign non-competes. i don't remember the specifics but it was laughably restrictive, nobody quit but none of us signed it
they also never honored their commitment to finish out my journeyman apprenticeship, they never filed the paperwork with the dept of labor to track my hours.
@@diplenski I'd be furious for that last part. I love HVAC as someone who doesn't do it, super neat stuff. In my state they were already basically unenforceable unless they paid you for the duration following the separation.
@@GeorgeWashingtonLaserMusket i was, and still am. they just kept jerking me around whenever i'd ask. they ended up letting me go right before covid after 4 years. so i was eligible for unemployment and all the extensions which was pretty sweet. i actually went back last year for a few months and they were jerking another guy around about his apprenticeship, so i quit again. i still don't have my journeyman's license, i might just test for my master license.
lol company was like drat! oh well, we tried XD
I'm a libertarian and I'm fine with this rule. Employees don't know what their working conditions will be like until after they actually start working there, as such, they can't be said to be fully informed and therefore never truly consented to that sort of employment agreement.
The classic Non-Compete is Statist and not enforceable under AnCAP. There has to be a title transfer for something to be a contract.
It more simple: I own my labor.
So you're poorly informed then. Libertarianism in the US is right wing nonsense.
@@kasimirfreeman In an anarcho-capitalist dystopia, this problem would be much worse, like all other problems. In an anarcho-capitalist dystopia, companies would obviously use noncompete just because it is in their interest to do so. If you are a business, you don't want competition for your workers. Okay, who would enforce such a contract? Private courts that are paid for by companies would enforce all contracts. In the anarcho-capitalist world, there are no public courts, just private ones, and good luck being a low-income worker in that world. A low-income worker in this dystopia would be in a constant desperate state to find any work, because there is no public welfare, so he would sign any contract, and then the company would enforce that contract with the help of courts that they pay for.
@@CesarFerraro2 you conveniently forget the part where we are all armed and willing.... stop talking man.
Non-competes going away is a breath of fresh air for anyone working at high end tech companies.
Never heard of a non comete until this vid. I'd say sign away and let their lawyers figure it out. I'd go to court all day for free.
Are there guardrails to prevent companies from poaching smaller companies like what Apple did to that blood oxygen company though?
ââ@@tedzards509there are no major guard rails. There are some exceptions but in my opinion they are too narrow to prevent serious issues And that could be a major problem. This non compete ban will crush the health care industry if enforced, this non compete ban will create a ruthless competition between small businesses. The people celebrating this don't really know how the pursuit of better pay could upend smaller local communities. Look at what happened when travel nurses became popular? It left many nurses with lower pay and under staffed compared to these traveling nurses.
@@tedzards509 Frankly, I'm not sure why you'd want to prevent that. Why shouldn't those employees be allowed to work at Apple if they can get a better deal there? That's just how the free market is supposed to work.
@@user-lk2vo8fo2q Monopolies are generally not good for a capitalist market, so allowing larger companies to eat up smaller competition is bad for both the consumers and the market itself.
Im an employer and i also hate non competes as well as all other anti choice anti freedom things coming out, no one owns me or my body and i don't want to have anyone in servitude, if people are unhappy let them leave. What i do want is to be able to provide a insurance that actually covers people and helps them the way medicare/medicaid would if they quit working.
We have something like that in the Netherlands, itâs like a fund that helps you bridge the time when between jobs. You go to UWV. There are also funds for injuries and stuff.
@@rubenskiii Here if you work and have a issue you go bankrupt if its bad even if you have insurance. We only give free healthcare to prisoners and people who do not work or if they already declared medical bankruptcy and lost everything
True story: A friend was stuck in a job with a horrible office situation dealing with both a boss and co-worker in a single room. They weren't bad people, their personalities were just not something he could deal with constantly.
After trying to get HR to fix things and get a separate space for months, he had the good fortune of having a meal with someone from upper management. That person asked why he didn't simply quit, and he explained that he had signed a non-compete agreement. The company's local branch had downsized to the point where he would have to go into a completely different career because of the specific tasks and responsibilities of his position having become so broad and encompassing.
The UM was shocked by this and promised to hire on more people to fix that issue. My friend told me that they eventually were backbup to the original number of employees at that branch within two months.
It seems that not every member of management thinks a non-compete is a good thing!
I'll celebrate for the people when I see it actually get enforced.
I don't know how this works in the US, in Germany we have something similar. But: 1.) If you leave the company, you get 50-100% compensated from the company for the duration of the non-compete clause. 2.) It is typical for very high paid jobs and you're able to negotiate the clause. Which is fine, some people doing a 6 month vacation after they left the company, because they get paid
This is more inline with how non-competes were supposed to be used. To protect trades secrets, or an investment made in a specific employee for which the employee received compensation beyond base pay. For example, a radio station spending a significant amount to market a headline personality would have that employee agree to not work for another radio station *in that area for a finite amount of time.* Not for minimum wage workers.
Sadly, in the US this isn't how they're used. In the US you may even have to sign a non-compete to become a cook at a restaurant. And there is no obligation for the employer to pay you for the NC period after firing you.
NDAs also already achieve the goal of protecting trade secrets without restricting the free market of labor.
Germany has it like this: If the company wants to have the non compete enforced, they have to contractually agree to paying at least 50% of the salary for the duration of the non compete. If no payment was in the contract, the clause is void. If less payment was offered, it is optional for the former employee, i.e. they can choose to take the money and comply, or not.
The U.K. is similar, you do not have non-competes, you have something called gardening leave. Essentially you go on a paid holiday for the period of time they do not want you competing. Iâve never seen this been more than a year, normally the length is the notice period you have in your contract with the employer. Most of the time this is like a week or two weeks for low skill jobs. Very skilled jobs tend to have 3 months to allow for finding a replacement or handovers.
All of this is negotiable typically when you actually end up leaving.
Wait so if i leave a business i cannot get a job with another company for the same thing ...........that is so stupid!
Depending on if you signed a non compete and what it specified that could easily be a thing yes. That is why most people agree non compete aretoal BS and exploitative and anti workers
Only people you'll see crying about wanting noj competes to be a thing are corporations and CEOs
In some industries, there is some logic to it. For example, an associate at a law firm or investment firm may quit to start their own firm and bring over a significant chunk of the clients from their old firm. That being said, those non compete clauses did not say you couldn't be a lawyer for a year. They say that you can't work for any of their clients in your new firm.
The problem is that other companies abused the concept to the point that someone making sandwiches at Jimmy Johns could not go over to Subway and make sandwiches there. Probably trying to protect the information regarding whether the cheese or the ham should be placed first.
@@ptrinch That is a pretty bad example though, a better example would be a high ranking employee with knowledge of company secrets, leaving the company and joining a competitor to leak those secrets. However, even in such a case, the theoretical value of that employee not leaking information is much greater than any wages the company could pay during the non compete duration, in which case they should at least be required to keep the employee on payroll even after quitting (or being fired).
@@ptrinch Stealing clients is not the same as a non compete.
@@848 Company secrets is a NDA issue, not a non compete.
Signed a non-compete employee as a janitor, pro-gamer move.
"I pay my janitors more than you pay your techs"
Great, and now everyone from the IRS to the health insurance is wondering how he can afford what he can, on a janitor's salary.
So glad the FTC went this direction! There are already laws which prevent stealing intellectual property or customers! In my area of work, I can't find an employer without a non-compete. I have no other option. Hope we get actual legislation banning non-competes permanently!
Another terrible NYS story is the governor vetoing the bill which was going to prevent non-competes in the state!
Yeah what actually should be talked about is non compete vs non-disclosure.. NDA's make sense.. i help company develop something.. i can't just leave and make the same thing as a new business.. or go to a competitor and make the same thing there..
Shackles on the wife is a great analogy to simply explain the non compete concept. Its such a shame that there is so much of this attitude that exists in the world in all places, relationships or businesses. The type of thinking of people to be like "others should fulfill my expectations for my own benefit, it must be enforced and it doesnt matter about how it affects the others." Delusion and Narcissism runs rampant in our society and we all suffer for it.
Same shit in Germany. I work with selling meat (Butcher shop) in Retail supermarkets, found a "private" market that would pay me more than my last. They wanted a temporary contract, meaning after 12 months who knows (they need to inform me 3 months before if they gonna extend the contract). I read the contract and there was a Non Compete Clause there. Direct, Indirect and Similar. The period ? 2 Fucking years of no compete. Meaning I would not be allowed to work my Profession for 2 Fucking years.... I just walked away. A RETAIL JOB, Not IT, Not Banking. Retail
They would pay you for 2 years of vacation.
Before I even watch the video I just want to say, I was forced to sign a non-compete agreement at my minimum wage job. There are no trade secrets I'm aware of. Why on earth is my ability to move to a different job crippled? This can only be a good thing.
Even if you knew any trade secrets, that would make you more valuable to the company, and therefore you should get a higher wage and better working conditions just so you dont leave for the competitor.
You were not forced to sign it. People need to quit saying this.
â@@nicwelchIf you desperately need the money, then yes, you can be forced... If not taking the job means you can't pay for mortgage/rent/food/etc... are you really going to argue with aren't forced?
Imma say it: they should do away with trade secrets, too, if they care about making the economy competitive. Trade secrets do nothing but stifle innovation because a few greedy bastards want their advantage. When toddlers do this, we teach them to share, to stop saying "No!" and "mine!" and to quit snatching stuff out of each other's hands. Why do we accept this behaviour in adults?
@@nicwelch Some companies will not hire someone if they don't sign a non-compete contract. If one refuses to sign a non-compete clause then the company could retract the offer.
I worked at a fortune 500 that simply didnt care about losing employees. The turn around rate was insane. Literally hundreds a year. And then things got worse and that business not doing so well these days.
Oh yeah. They would fire long time good employees regularly so they can hire a cheaper offshore person. Often times several to replace the duties of a single good employee.
This is another case of corporations abusing something until became a problem.
Finaly something good. This should keep employers on toes and may force them to increase wages so employee just doesn't leave.
I started loyally watching this channel because I love seeing people go on rants, but after so long of me slowly realizing the world is crap, this piece of good news kinda made my day lol
Good. Non-compete clauses are ridiculous restrictions that could even be considered unconstitutional.
Independent consultant. 1000% agree with you on this.
"Non Compete" It's right in the name "Not Competing" It creates monopoly, and not have a healthy competing industry where companies NEED to be better, better environment, better pay, better benefits, better products, to compete against each other.
The problem with non-competes is the information disparity. Employees don't realize they give up all of their leverage, but employers do realize that the employee are giving up all of their leverage. So they get exploited.
Ideally, non-competes could work if the pros and cons were thoroughly explained to employees before signing. Instead, a non-compete clause is buried in a heap of other mandatory onboarding paperwork.
As European I'm happy for people in USA because of this decision. Non-compete contracts are bloody awful. I can somewhat accept it if you work on super secret tech that company A is researching and engineering and then want to go to company B that is researching exactly same thing (trade secrets are quite an interesting thing that will play part here with or without non-compete anyway), but even then it would have to be provable that move to company B would harm company A with some extra boundaries to avoid abuse, but if you're frontend engineer and want to move to company D from company C for better pay, f*ck off with that non-compete, there's no place here for that nonsense.
The US has a long way to go with catching up to other more developed nations. The US is falling far behind in some aspects and I hope it catches up soon
A non-compete should have the requirement that if the employee leaves the position, for the duration of the non-compete (since it will keep them from being able to make a living in their field) should be required to be paid the same amount they would have gotten if they had stayed. It would force the employer to actually think about letting them go and try to get them to stay since they would have to continue paying at full level for getting no work.
I hate non-competes! When I've had to sign a non-compete to have a job to put food on my table, I felt screwed and I knew I was screwed. And when pretty much all the employers in a specialized small niche of jobs, basically you're going nowhere and wages are now basically controlled at piss poor rates.
So, in the land of the free, people are also free to give their rights away, but then employers demand you to do it in exchange for employment and people are desperate enough to bite. Tough.
â⊠not even a good bangâ
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5:30am Saturday morning in a quiet suburb of the biggest city in Western Australia out front watering the garden and I laughed so loud I think I woke up the neighbours
The Thomas Sowell quote is about Sowell working for the government when he was in his 20's and he found the solution to the problem they were tasked to solve by figuring out if they could track how much sugar cane was destroyed in the hurricanes by asking the other department of the government. He requested the info and is still waiting for the response till this day (he's 93 year old now) because he realized right then that if he solved the problem the people tasked to it would be out of a job so they didn't want solutions and that government was inherently incompetent.
Thomas Sowell mouthpiece for the Reagan Revolution , Milton Friedman, PRO monopoly advocate(the Anti Trust paradox) Robert Bork, The Koch Brothers(who FUNDED the anti democratic Citizens UNITED Decision that allows them to LEGALLY buy and sell YOUR POLITICIANS), the Heritage foundation, Cato Institute, Americans for Progress etc etc etc etc.
Billionaire libertarian pushed (NEVER) trickles down neoliberal REAGANOMICS that has GUT CUT DEMONIZED AND PRIVATIZED the USA from the wealthiest largest middle class in history to the 2nd Gilded age IN JUST A BOOMERâs LIFESPAN???
Yeah totally going to take HIS WORD FOR ANYTHINGđ
I remember that story. I think I watched the video a year or two ago.
This man is the GOAT, no wonder the social activists demonize him. A brain is a menace.
@@DavidPereiraLima123 Thomas Sowell may have some interesting things to say, but the idea that an absurd extrapolation of his anecdote is supposed to convince anyone of anything is pretty funny. For anyone wanting to see someone critically discuss Sowell's work: czcams.com/video/vZjSXS2NdS0/video.html
"It's taking away the freedom of someone to take away your freedom". Well said.
My country fixed non-competes by imposing maximum length and requiring the company pay their salary whilst it is active. Thus the few that get them they usually only are valid 3-6 months.
In Finland we can have non-compete clauses for certain positions(for example researchers). Clause is valid if employee leaves(do not apply if get fired or due to other employer's action). During period of non-compete clause is valid ex-employee needs to pay 40% of your salary for first 6 months and 60% of your salary for longer period.
for someone like, say, the guy who knows half the coke recipe, i can see them being made to sign some things. but that's a very one-off kind of situation.
i keep hearing about nurses, hair stylists, and restaurant workers being made to sign non-competes as if there's some sort of important trade secret they're going to bring from one place to the next.
but in reality, it's just those places trying to shackle them by holding their skillset, experience, and ability to support themselves hostage so they can force them to stay, regardless of how they're treated or what they're getting paid.
Louis is absolutely right that no one trains. Regarding IP, here's the thing: if I write a piece of software (that's my job) for my employer, odds are, that's NOT their IP, whether they like it or not. Everyone has a notification system. Everyone has logging. Everyone has a TON of this same-old-same-old crap that no one wants to pay for as a service but everyone needs, and so everyone re-implements it in-house. Is that dumb? Yeah, kinda. But the important point is that I already wrote that like five times for other people, so you can pretend that's "yours" if you want, but it's really MINE, and I made you a copy of it just like I did those other people. Cry all you want, but you have no case: I made it for you as a work for hire, but I did the same for everyone else, too.
I worked IT in Huntington, WV for $12.75 hr in the early 2000's. I was stuck because of a noncompete. The slimeball I worked for also replaced Americans with H-1B's. My work was being billed at $120/hr, I was getting less than $13/hr.
Thanks for quoting Thomas Sowell, more people can benefit from his common sense wisdom.
His anti-gay rants from 20 years ago have not aged well.
@@dansanger5340 only if you think truth isn't timeless
@@dansanger5340 Nice ad hominem fallacy right there. Anything true which Sowell says, is true, regardless of whatever else he may or may not have said.
@@TheWolfgangGrimmer You seem to have committed the straw man fallacy by reading more into my simple observation than I ever intended. It was not intended as an argument against the question at hand, but as a caution against trying to turn someone into an oracle, which can lead to the appeal to authority fallacy. Even though I agree with much of what Thomas Sowell says, I am turned off by the hero worship that seems to follow him, because he has also put forward arguments that lack intellectual rigor.
@@dansanger5340 That _might_ be fair, except that I doubt you just equally call out every instance of over-glorifying of someone you ever witness. Last I checked no one really makes that kind of effort. Which raises the question, why make the effort to react to this one in particular, and without bothering to give any nuance to the claim?
They say that free market and competition is great, yet the same people then turn around and support non compete agreements. I donât understand.
It's crazy as well because non competes have made it into all kinds of professions like security guards and fast food employees. It shows how disingenuous the idea of non competes really is because what secrets do a fast food worker gain that they can't go work at another fast food joint?
My takeaway from is this is that instead of using tinder, I should take people who are already in relationships
The law of contracts only works in a hypothetical system where all parties to the contract have the same relative power within society. No one signing a contract with a company that has resources can protect their interests against a motivated bad actor unless they have a Union or a Government holding the company accountable. Libertarians can LARP all day long about free markets, but unrestricted markets don't stay free for long.
make companies fight over workers, like it was supposed to be
I have been watching your videos for a few months and I never made the time to leave a comment and thank you for your work. But I do want to let you know that your work is really appreciated, even if it's not always revealed in a direct fashion. Thank you for everything you do!
I started watching you 2 months before the pandemic hit and at the time you were riding your bike around NYC. I was researching transportation and points of interest for my honeymoon in February 2020. Glad to to have NYC before the apocalypse and that you are still a podcast that pops out
Louis with the fresh haircut!
Imagine if Microsoft had a non-compete clause in the 90's. No Valve.
The worst timeline
I support the idea, the problem is that this rule is unconstitutional. Congress makes the laws, not unelected bureaucrats.
So happy to see you come out with this video. This is pretty great news for peasants like me and I love to see a business owner with a level head on this.
There is one form of Non Compete that makes sense... If you are selling a business you built to take the cash out and run it makes sense for the purchaser to have you sign a non compete for a number of years in that market as part of the sale. Not for the employees just for the Senior management/owners/founders. Without that noncompete the cash paid for the business will be reduced considerably. But that is a special case and would not affect employees.
But does it even make sense in that case? I imagine that pretty much everything of value would be held in IP rather than the founder just starting up a business again from scratch. It's back breaking to come up with IP. Well, I suppose you could be selling a business that doesn't involve IP but instead involves reputation or connections?
Owners and senior management are not included in the FTC ruling.
As a european where non-competes for non-executive positions are already illegal I'm all for this.
What I am however not a fan of is the FTC being the ones to institute this rule. The FTC is part of the executive branch of government. It's job is to enforce existing laws and not to invent new ones. That's the job of the legislative branch i.e. Congress. I fear this will be stricken down by the Supreme Court for the clear constitutional overreach this represents. And rightfully so. Government agencies can under no circumstances be allowed to function as quasi-legislative bodies. The potential for abuse is way too high.
From Cory Doctorow: "The FTC's statutory authority to block noncompetes comes from Section 5 of the FTC Act, which bans "unfair methods of competition" (hard to imagine a less fair method than indenturing your workers). Section 6(g) of the Act lets the FTC make rules to enforce Section 5's ban on unfairness. Both are good law - 6(g) has been used many times (26 times in the five years from 1968-73 alone!)."
Have you heard of delegated legislation? The FTC is enforcing the fairness which is well within the FTC Act
the issue is Congress effectively delegated authority to FTC, the lawsuit will determine whether or not this rule is within the FTC's delegated authority
The FTC is technically not stepping out of their boundaries, they are empowered to police unfair or deceptive business practices by the FTC Act. In terms of the substance, the FTC is sort of creating a new law. But this behavior is not surprising coming from the FTC: they are already the de facto data privacy regulator in the US for more than a decade by now, and created an entire common business practice surround data privacy in the US. One should be blaming the useless Congress who has been spending the past 2 decades plus bickering among each other and not passing useful laws.
Do you not have the concept of "regulations" in Europe, or are you just kind of confused about how the American government works? I can't imagine you guys have your legislature come up with every speed limit for fear of "constitutional overreach". Let me give you a hint: who do you think gave the FTC the power to do this? Was it (a) the supreme court, (b) a paramilitary coup, or (c) a democratically elected legislative body?
We don't have to pointlessly fearmonger about the "potential for abuse" either. We already know what that looks like... because we've had several decades of FTC corruption. They did nothing. That's right, a corrupt FTC is an FTC that does nothing at all. In other words, the absolute worst case scenario is identical to the situation you're advocating for where the FTC doesn't have this power.
There's nothing I cherish more than people who have a moral core. You are the real deal!
Thank you for your perspective, and for your leadership in right to repair. :)
On April 25, 2024, the Federal Trade Commission (FTC) voted to restore Obama-era net neutrality rules in a 3-2 vote along partisan lines. This comes seven years after the Federal Communications Commission (FCC) repealed the same net neutrality rules in 2017.
Out of curiosity, what changed when net neutrality was repealed? What is expected to change when it's restored?
From what I remember the Obama Era net neutrality rules weren't anything to do with a neutral internet
@@kawkasaurous Without net neutrality, (for example) Comcast can slow down streams from Netflix (a competing media company) or charge Netflix for "fast lane" status. It's not about content (political neutrality), it's about who can get bandwidth.
@@kawkasaurous Not much changed, in part because ISPs expected that it would flip flop as the agency's board members changed, because FCC board membership is not an elected position, what did change was the push to regulate ISPs under Title II classification, which is for common carriers.
Net neutrality is important, in essence, it's the idea that ISPs should not shape, slow down, or otherwise prioritize/deprioritize different types of web traffic.
Ideally, it should go hand-in-hand with ISPs being classed as common carriers (think how land line phones were regulated, as well as electricity, water, and other essential utilities), which opens ISPs up to being regulated as the essential utility the internet has become, allowing them to push for higher speed for lower prices, as well as giving them more controls of which to work with to make the tens of billions of dollars given to ISPs by the government to improve connectivity that they just do nothing with.
NN sort of requires Title II classification to fully work, because it is pretty much guidelines as to how to treat internet traffic, which is to say, the ISPs should treat your connection as a dumb pipe, and not do any real prioritization within reason. Along with Title II, we'd see much better internet speeds, for much lower prices, and Title II also opens up concepts like forcing local loop unbundling, basically translating to opening fiber lines to similar circumstances as the old copper telephone lines (meaning any ISP can offer any service off of it, like DSL in the past).
After the Trump administration elected Ajit Pai to the chairman position to the FCC, he basically dropped all attempts to reclassify internet as a common carrier medium, and in fact pushed hard to have it considered as beyond the FCC's control (which is silly, internet a communication medium). But again, very little changed for the average person in part because the effort to charge people out the ass ISPs put in would be undone in 4-8 years anyway, because that's how American politics work.
EU passed Right to Repair law. đ
a real one or some loop hole filled vanity law
Another aspect to keep in mind is to see who are the parties that are affected by any law. If one party is an individual and another party is a corporate entity, the laws should be made to generally favour the individual.
In Oregon when I resigned under these noncompetes after witnessing the CEO committing a felony child molestation crime, Oregon allows the theft of all unpaid earned income and forced investment in the company. I forfeited over $5 million dollars when I resigned not knowing this and never once violated the contract. Then the defamation came and I was forced to move under threat of lawsuit and physical harm to California where these contracts were illegal. That didn't stop the company and its law firm. They blacklisted all of us through a national business association where the CEO was chair forever knocking myself and others out of our careers where I went six years to college to obtain.
Fully agreed: non compete are BS. But just shows that libertarianism is unsustainable because it leads to contradictions like this one.
So, are you a communist?
Imperfect is not the same as unsustainable.
Libertarians tend to have a beautifully ideal, but completely naive and simplistic view on human nature and social cohesion.
Not really I don't think non-competes enforce a free market, it's the opposite and the fact governments allow it for the big players and friends says a lot. Sure people that jerk corporations probably do think it's healthy but not in my eyes. Just more mafias using abusive tactics to people that want a fair a chance at peddling their own trade in a fair market.
"I will call my unwillingness to follow rules I agreed to 'unsustainable.'" - OP
You are a true exemplary in the world of 'business ethics'.
100% agreed. You spoke my mind!
Lou is giving the reasoning behind stealing a friends spouse instead of dating a random đ
It's no coincidence that married men have higher rates of success with other women.
I am a libertarian and I think non-competes are anti-capitalistic. If you are restrained between a choice of getting a small token wage or a zero base wage unemployment with no meritocratic upward mobility or outward chance of gaining a better offer, how is it any different to how governments run a forced public system? Not to mention corporations are just pseudo-governmental entities that tyrannise smaller competitors into submission or destruction and use the letter of the law rather than the spirit of the agreed contract (assuming they don't break it without consequence) like governments do anyway. It's just another mafia style power with a different paintjob.
I appreciate these videos since they give me food for thought on topics I never thought twice about. I'm an LPC so non-compete isn't common in my field, so it's neat to hear about it here.
I'm glad you mentioned this. Many libertarians and right-wing people always preach "All rules, goverenment & regulations = bad" ideology. However, there are many rules and restrictions out there that aim to increase the overall net freedom of humankind, by restricting the "freedom to suppress larger number of people's freedom" that only a select few have in our society.
If a video game's balance is so broken that everything but one single playstyle is worth it, then the game developers should make extra patches to make viable playstyles become more diverse. It's pretty much the same thing.
He is a janitor? Then why is he over there fixing a motherboard? Oh that falls into other duties as assigned.
Regulation always benefits the biggest players. In this case, there's no longer going to be any reason to provide more than the absolute minimum training and forget about continuing Ed.
Instead of promoting from within, companies will go outside to find someone who's already trained.
Y'all think you're making it better, but you're just killing the golden goose.
Bold of you to assume companies are already not providing the absolute minimum with a non compete on top
â@@bountygiver2I get your and understand the cynicism.
However, I think my point stands. If you have a long-term employee, that you are reasonably, confident is going to stay with you, you are more likely to invest in them.
Without that investment, everyone is interchangeable and expendable.
Hey Louis,
While this may fix problems for lower paid workers, many industries have companies collaborating on wages to keep them as low as possible and anti poach agreements informally which should also be taken care of, while this will help long term in most cases I wish they did more about what I mentioned, anti poaching agreements are a lot more widespread in the US than many people would assume and have lead many out of the job even years after they stopped working for a certain company
KEKW, man, Louis Rossman, I am CONVINCED that you've done at least ONE "open mic comedy club night" in your life. You are quite funny and I'm saying that in a positive way, not like... "You are a clown" or anything like this. Kuddos man, keep the great videos coming!
This really is an oversimplification. There are many types of non-competes that are necessary.
1. I hire you and and willing to spend $100,000 training you in my proprietary equipment and processes. Right after the training you leave.
2. I buy out your company for a handsome figure, and you immediately open another business doing the same thing across the street.
In both cases, it's more than reasonable to have a 3 or 5 year non-compete in the same region.
Non-competes in an industry where the training is generic and the no "secrets" involved (like fast food) are insane, but you can't just lump all non-competes together and ban them all. A business will sell for far less if the previous owner can just open anew and compete with the new owner. Businesses will be hard pressed to spend a lot of money training an employee that can just take off right after.
The military does something similar .. we'll pay for your college, and you sign up for 6 or 8 years. No different.
It's the few bad employers ruining it for everyone else
In the first case, you should evaluate why the employee left. Training in proprietary stuff should fall under NDA.
In the second case - I don't agree with hostile takeovers in general, and I definitely think people should be allowed to leave a workplace - and even start their own business, yes - if they have problems with a new employer during a takeover.
â@@logicalfundy Good luck proving breach of an NDA in a court of law, though. Like Louis said, people simply find clever ways around it by hiring the person with the trade secrets in some ridiculous capacity like janitor, and claiming they came up with the radical new improvements all on their own. Have seen this happen in the manufacturing industry, all the time.
And also a hilarious case in aviation (although the business owner didn't find it funny) of a pilot from a certain European country who signed a 3 year contract in exchange for the employer paying for his expensive type rating on a jet, full glass EFIS and all... And then, once the man got his licence endorsed by the aviation authority, he just skipped town and left the country. Of course, not much that even a non-compete contract could have done about it in such a case.
People's all or nothing mindsets are quite childish.
I think a much bigger problem than whether or not non-competes should be legal is the fact that a third-party organization that we don't vote for and doesn't have law-making authority is making and enforcing their own laws. (FTC, FEC, ATF, SEC, alphabet soup etc.) If the FTC is part of the executive branch (and they are) their role is to enforce existing laws. The legislative branch makes law, not the executive. Now the FTC and friends are doing both without any oversight or authority of any kind.
If you think this is a good thing for the average American, you aren't paying any attention.
Shill
I'm really excited to be able to follow my dreams of running my own company now that my non-compete will be invalid.
You are one of my favorite modern philosophers.
We really have to talk about your perceptions of capitalism, because you have some idealistic view on the subject.
Capitalism works better when businesses have more incentive to compete with each other.
1) They have to provide more value to customers so they can make additional profits so they can pay employees enough to not have them leave.
2) Employees have an incentive to improve their skills they wouldn't with a non-compete - why get better at your job when you can't get hired somewhere else anyway?
@@rossmanngroup where does competition lead to?
â@@rossmanngroupUnfortunately the final goal of capitalism is having no competition and complete dominance within the sector.
Once that process is achieved the product/service is forced onto people by governmental designation of resources which is quickly authorized due to the financial "incentives" the corporation facilitates to the representatives.
At some point there is not even a product there just the monetary obligation from your gov to this entity which is guaranteed by taxation.
@@absolutium well said, glad to hear some educated folks ;)
@@absolutium thats why the ftc exists they are supposed to prevent monopolies
Agree completely.
The comment on the spouse thing is that you sign a non compete because of the damage to the kids. Leave for abuse and the few other serious issues, not for boredom or a fling.
Marriage is not a Job.
Dead on, and well explained. Thanks again!
If an employer tried to "guilt me" into free overtime they are going to learn really quick who is actually in charge.
If my employer ever told me something I needed to do was unpaid, I'd laugh at him clock out, and go home. You think I show up just for fun? Get the fuck out of here or pay me for my services.
Be the better employer and you won't lose employees, it is that simple.
Thank You, God Bless You!
Once upon a time the company I was working for got acquired by a bigger one. The bigger one forced us to sign non-competes to keep our jobs. Luckily, in our state that kind of non-compete was only enforceable for salespeople who had clients or customers they could take. It could not be enforced against professionals or technicians or the such. I got out of there as fast as I could.
I was really confused about the FTC banning non-compete agreements. After listening to this for a few minutes I was blown away. I've never heard of an employer making someone sign a non-compete agreement as a term of employment. This is the kind of thing you sign when you leave a job, usually lasts 5 years and the employer typically pays you a signing bonus equal or greater than 5 years salary. Entering a job under that restriction should only last as long as you're in that employment, else the non-compete should be illegal.
As I understand it, non-competes also exist so that companies can cyclically fire and rehire the people they've already trained so that they can do the whole infinite growth thing.
Governments role is to guarantee the rights of individuals.
This regulation(should've been a congressionally passed law, but I digress) accomplishes that.
I've been watching you for over ten years. You have been consistent the whole time. Stay strong, and committed to justice. I know a gem when I see one.