Noncompetes are Now Illegal

[Kevo]

Were you all offered any consideration for signing it?


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No considerations. No equity payout from the previous company or RSUs at the new company. No transaction bonuses. Just "congrats on being acquired! No one is losing their job. Sign this new employment agreement to secure your employment with the new company."

The CEO had just made 40+ million dollars and he told me "congrats" in the hallway.

[Brownski]

They were most likely offered some token consideration that passed muster with legal but didn’t approach the value. That’s the way life is for many. Place’s like Jimmy John’s having sandwich makers sign NCAs was the supreme abuse.

Peripherally related maybe- A couple ski hill owners in upstate NY got in trouble recently for entering an agreement not to hire each others’ employees (amongst other things). Not sure how I feel about the AG wasting her time on such trivial shit but I thought the no-poach agreement was some high level douchery.

[jackstraw]

Why? I think that's a good agreement not to poach. Employees are free to do whatever they please. We had it with one competitor...completely unwritten so just a general courtesy agreement. I'm not even sure it was ever officially discussed, it just didn't happen and if an employee switched teams a courtesy call would be made.

[Brownski]

Why? I think that's a good agreement not to poach. Employees are free to do whatever they please. We had it with one competitor...completely unwritten so just a general courtesy agreement. I'm not even sure it was ever officially discussed, it just didn't happen and if an employee switched teams a courtesy call would be made.

My memory is that it was an agreement not to hire each others’ workers under any circumstances, not just an agreement not to recruit. Sorry if I didn’t express that correctly.

[Kevo]

^Apple, Google, Intel and Adobe had a mutual agreement that was very similar- https://www.cnet.com/tech/tech-indus...ching-lawsuit/

[evdog]

No considerations. No equity payout from the previous company or RSUs at the new company. No transaction bonuses. Just "congrats on being acquired! No one is losing their job. Sign this new employment agreement to secure your employment with the new company."

The CEO had just made 40+ million dollars and he told me "congrats" in the hallway.

That's about how things went when my company got acquired. Though the CEO of the acquiring company did promise us some equity so we each got 0.2% of the continuing company via RSUs (I think) but the value of that soon got diluted and basically eliminated due to another acquisition, restructuring and re-financing multiple times. Only those with older stock options made anything on the company sale, and not much at that. A few of us did get a small bonus since stock options were worthless but that was maybe a month's salary. The CEO was the only one who got a windfall since he had a sale of business bonus and two years severance written into his employment agreement. I had worked about 16hrs a day/7 days a week for months on the deal and didn't even get a thank you from him. My only reward was getting to fire the CEO as my first task post acquisition, since he would not be continuing with the company. Apparently no one told him that, so it was quite a shock getting walked out.

Most staff got an unspoken kick in the pants after the deal since they were on typical comp plans of salary plus bonus. We had been acquired by a PE firm who used debt to finance the acquisition. Most employees never got bonuses again because the PE firm saddled our entity with the debt and interest which killed our profitability, and being profitable was a pre-requisite to paying out bonuses.

Each of us in management were required to sign non-compete, NDA, etc to continue employment. I didn't care since I would take a break from work if I got laid off. When that did happen the interesting thing was one of the terms of the severance agreement stated I could not seek or accept employment with the company in the future. Umm...if you don't want me to work for you again, maybe don't hire me? So then guess what happens six months later - they come back asking me for help with some of the stuff I did that they couldn't figure out. That particular term in the severance agreement was quickly overlooked.

[dunfree]

legal consideration != real amounts of money

[jackstraw]

^Apple, Google, Intel and Adobe had a mutual agreement that was very similar- https://www.cnet.com/tech/tech-indus...ching-lawsuit/

Yeah, that is certainly the downside to an agreement between employers. Generally, if not always, when you try to poach someone you're going to offer them a raise from their current salary. Generally in my world it wasn't significant, so the culture and potential of advancement played a bigger part in the employees decision.

[MontuckyFried]

This is most welcome news! Some of you may recall my recent HR battle for a prospective role I ended up turning down due to their "non-negotiable" bullcrap NCA. I wonder if I should hit them up and see if NOW they'd be willing to let me strike that from their idiotic contract.

[Kevo]

This is most welcome news! Some of you may recall my recent HR battle for a prospective role I ended up turning down due to their "non-negotiable" bullcrap NCA. I wonder if I should hit them up and see if NOW they'd be willing to let me strike that from their idiotic contract.

Good on you for sticking to your guns on that.

I can't imagine any company being able to justify a NCA. Are we to believe that whatever company this role was with needs more protection than Apple, Google, Cisco, Oracle, Netflix, Intel, etc?

No, you can't own people. And yes, the "free market" should go both ways.

[Cisco Kid]

I refused to sign a non compete because it was so broad that it would not be enforceable. Boss said "I know I can't enforce it but I could drag you through the courts for a while".

[MontuckyFried]

Good on you for sticking to your guns on that.

I can't imagine any company being able to justify a NCA. Are we to believe that whatever company this role was with needs more protection than Apple, Google, Cisco, Oracle, Netflix, Intel, etc?

Thanks, and you are absolutely right in your thinking that this role did NOT need more protection than the big tech companies. Non-competes have been used more as a tool to intimidate workers more than anything these days.

No, you can't own people. And yes, the "free market" should go both ways.

Agreed. NCAs have gotten SO out of hand these days, it's no longer a thing just meant for the C-suite (THAT I understand), but it's being applied to everything from salon workers to gas station attendants. It's become a means of keeping people's wages artificially low. SO glad the FTC finally laid the smack down on this nonsense.

I refused to sign a non compete because it was so broad that it would not be enforceable. Boss said "I know I can't enforce it but I could drag you through the courts for a while".

Yup. That's precisely the spirit of it. Most of us lowly grunts can't exactly afford to lawyer up and fight them, so we feel intimidated enough to stand down and deal with it. This is but one example of the 2-class system we've become.

[The Suit]

I refused to sign a non compete because it was so broad that it would not be enforceable. Boss said "I know I can't enforce it but I could drag you through the courts for a while".

This is why the FTC ruling is much more than a nothingburger. For decades now, noncompetes have been more about intimidation than enforcement. The FTC just pulled the teeth from that threat. I hope the ruling stands.

[Mustonen]

Why? I think that's a good agreement not to poach. Employees are free to do whatever they please. We had it with one competitor...completely unwritten so just a general courtesy agreement. I'm not even sure it was ever officially discussed, it just didn't happen and if an employee switched teams a courtesy call would be made.

Unwritten cuz that’s the kinda crap you get sued over. An employee who can’t be recruited by a prospective employer due to some unwritten backroom deal reeks of anticompetitive horseshit. It keeps people in line and it keeps wages down. Ever wonder who “the Man” is? It’s you.

[jackstraw]

Unwritten cuz that’s the kinda crap you get sued over. An employee who can’t be recruited by a prospective employer due to some unwritten backroom deal reeks of anticompetitive horseshit. It keeps people in line and it keeps wages down. Ever wonder who “the Man” is? It’s you.

That's just like your opinion man.

And yes, I already stated it "could" keep wages lower if it was a deal made amongst all the competition, but it wasn't. Two out of seven is hardly an issue. It was just being respectful and not being a douchebag to the competition. Meanwhile 80% of the employees worked for 2, 3, or more of seven over the years.

And aren't you a banker or in finance? Definitely not "the man".

[Mustonen]

Oh I’m totally the man. I also don’t hesitate to recruit from friendly competitors if they have good people they aren’t taking care of.

[kmkmkmk]

Doubt the ruling stands.

In my company we have six month noncompetes during which people are paid their base salary (for 90% of our employees who are all highly compensated). We can waive any or all of it. We will just convert it to a six month notice period that we can also waive.

[Rideski]

Even if the supreme bs court doesn't rule in favor, I have a feeling most county or district courts looking at a company trying to fleece a former employee will be less than enthused.
As well as adding reason and credibility when I redline it out of my next contract.

[neufox47]

I hired two young professionals a few years ago who were given non-competes on their first day at their old firm. When I hired the first one I got a call from the Partner at their old firm threatening them and my company with legal action. Two months later I hired the second. One benefit we offer is insurance for legal fees, which includes non-compete actions. So I told them to expense their $15 a month coverage. These kids had almost zero contact with clients.



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[MontuckyFried]

As well as adding reason and credibility when I redline it out of my next contract.

Can't wait to do that on the next go-around! Bring it, mofos!!!

[Kevo]

I hired two young professionals a few years ago who were given non-competes on their first day at their old firm. When I hired the first one I got a call from the Partner at their old firm threatening them and my company with legal action. Two months later I hired the second. One benefit we offer is insurance for legal fees, which includes non-compete actions. So I told them to expense their $15 a month coverage. These kids had almost zero contact with clients.



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This is the exact type of bullshit I have seen.

The fucking nerve of the previous employer to try to make it so that these young professionals can't advance their career, like he fucking owns them. It's sociopathic, narcissistic bullshit.

[Dantheman]

Struck down: https://www.npr.org/2024/08/21/g-s1-...oncompetes-ban

[Mazderati]

Lumberghs celebrate.

[CarlMega]

The worst people in the world will be celebrating this ruling.

[Rideski]

Leave it to a Texas judge to throw a wrench.