non-compete laws seem like something out of a gilded age nightmare. Saying an employee is not allowed to work in their industry even when they quit is absurd. It is totally pro-employer and extremely anti-employee. How these laws are even around in the 21st century in the US is beyond me. Glad CO took a step to stop this horrific practice.
The way I’ve seen it work in finance is that you are basically given one year’s salary and benefits up front in exchange for not working anywhere for one year. I’d take that.
If you're having the non-compete enforced against you by a Hedge Fund, there's a good chance that 65% of your total compensation is in the form of bonuses. So getting "just your salary" would amount to a 65% pay cut.
On the flip side, you're still getting paid 6 figures to relax, recharge, travel the world and have fun. I would personally love it. But my ex-colleagues feel very differently
While that's at least "fair" in an immediate monetary sense, it's still a bad deal at the end of the day. You've now been out of your industry for a year when you go back and your value has dropped as a result.
Not really. As far as I know (just from reading Matt Levine) everyone knows about these policies, everyone has gaps like this due to gardening leave, and so it's completely expected and does not "drop your value"
>Saying an employee is not allowed to work in their industry even when they quit is absurd
A noncompete does not ban you from working in the industry. Typically it only restricts you from working on competing products. You are only being banned for a period of time from a small part of the giant space of the tech industry.
I'm not allowed to work for any travel focused company for another 20 months according to my previous contract. It might be illegal but also I'm so done with that industry I don't really care.
Untrue. I've seen non competes like "you can't work with any company that's a potential competitor". That's for a software engineer working in a software development agency. Had I signed it, it would keep me out of like 75% of the companies I could work for.
Besides, even in situations where this is not the case, it's still absurd. Companies are all like "free market, supply and demand and bla bla bla" until it goes against them. If you wanna be a capitalist, then be accept capitalism as it should be: a great competition.
Businesses hate capitalism. Capitalism forces them to compete, and competition is hard. What they want is a restricted market that keeps out competitors and entrenches their position.
Capitalists (i.e., those who own the capital) hate competition. They love to buy regulations and other restraints of trade that keep out competitors and entrench their positions. This occurs in every capitalist society, everywhere, always. So, it's somewhat misleading that their philosophy pretends to value what they hate.
I wish there were good terms for what we sometimes think we mean when we say "capitalism". "Free market" seems good, but the word "capitalism" often shows up in the definition...
It depends. In the US each state has their own rules on how restrictive a non-compete can be. Some only allow narrow limitations, while other allow far more broad restrictions on who you can work for.
The terms of most non-compete prohibit you from working on a "competing product", they prohibit you from working at a company that works on a competing product. Specifically if there is an intersection in products made by two companies, they are competitors.
If you're in a small town there aren't that many different jobs, so a non-compete means "you cannot work" - e.g. if you have a Walmart job with a non-compete, you can't go work at Target.
At the other end, if you work at a large tech company it turns out you probably can't work at any other large tech company. If you work at a startup you can't move to a large company, and vice versa.
And "only banned for a period of time" is a nice way of glossing over a sim to twelve month period (pretty much as long as the company thinks that they can get away with) in which you no longer have healthcare, and ability to pay rent, etc because you can't get a market rate job.
If a company believes that you leaving and working for someone else will cause them harm they should be willing to pay you to not work for those competitors.
Fwiw, most states don't allow enforcement of non-competes for low level jobs like clerks. So in practice you could go from Walmart to Target in most places. They put those clauses in for the chilling effect. It's a scare tactic.
Not to mention that job opportunities which doesn't violate the non compete but the company still decide not to hire for fear you'll leave in a couple of months due to the other company trying to enforce an unenforceable non compete.
