There are many "temporarily embarrassed" entrepreneurs that read HN who can't stomach the thought of their future tech lead stealing their idea.

I personally worked for one such person, whose startup was so new that employees were being paid only with shares, but still had about 10 pages of legal documentation for new employees to sign.

And yet we are still confronted with NDAs just to listen to "Facebook for Farmers" pitches.

Perhaps it's better to say those entrepreneurs are afraid of their implementers leaving with all of the domain specific knowledge; believing that it would allow them re-create the product and outmaneuver the entrepreneur.

Of course it's never really that easy, but so few fears are rational.

Half the reason I want increased computer science education is because I'd like this madness distributed across more people.

I went in for an in-person interview at a company. At the end of the interview process, the interviewer let me know I hadn't gotten the job, but told me I should connect with him on LinkedIn because he and his friend had a great business idea that needed a developer.

I guess I shouldn't have been surprised, since I've had interviewers reach out to me after I've been rejected to say the same thing. It seemed exceedingly strange that I was solicited to work on another project in person by the interviewer during the interview process.

You can get a new financial advisor. My _wife_ wants me to build her an iPhone app.

Some people really like their financial advisors!

We once had a guy whose first slide was just an NDA in tiny font that he actually read aloud to 50 people. I was in the back of the room with some of the other staff and I had to step out because I was laughing too much.

In practice though, most of the time your idea is too small or too risky to be on the radar of those organizations.

A bit like how when you wake up a dream you had makes perfect sense until you try to describe it to someone else.

The statement that ideas don't matter, only execution matters, can only apply among sets of trivial ideas that don't change the landscape. Yes, if you want to make Facebook for Farmers, that's an idea that is completely interchangeable with hundreds of other equally trivial ideas, and it doesn't matter which one you choose so much as how well you execute on it. But if you have a genuinely significant idea, something that can fundamentally alter the landscape or advance humanity, then execution is secondary, and, in fact, lots of different people or organizations could implement it. That isn't to say that you can't screw up the execution and fail thereby, but the limiting factor to success is different for trivial ideas vs significant ideas: there are thousands of trivials and the major factor of success is how well you execute the one you choose; there are few significants, and the major factor in success is having them first/getting to market first. If you think you have one of the latter, NDAs might make sense.

Ideas + experimentation to validate them + implementation is where its at. An idea by itself without execution is a fantasy.

In my usage, 'information' describes patterns that exist in the universe, and 'ideas', at least loosely, describes the apprehension of one or more of those inherent patterns by an intelligent mind. An idea is the mental perception or conception of external information. Information might be fundamental to the universe, but ideas are fundamental to intelligent minds, being the lens through and by which we perceive everything.

My point, though, was mostly that it's false that ideas have no value - I wasn't trying to make the complete opposite error and say that execution has no value. Of course to make something happen in the world you need execution as well as something to execute.

I'm not arguing that execution has no value. Obviously ideas, particularly business/startup ideas, must be acted on effectively in order to become real. But: ideas are logically prior to execution; the ability to conceive of abstract ideas is a far larger developmental step than is the subsequent ability to act on those ideas; and being able to have abstract ideas is the thing that most definitively separates homo sapiens from all other species on Earth.

Startup law in a nutshell: Management completely disregards labor law but is very concerned about intellectual property.

I feel it's an adequate explanation of why people who are currently employees who support such employee-hostile policies.

https://consumerist.com/2016/06/22/jimmy-johns-to-stop-using...

"Employee covenants and agrees that, during his or her employment with the Employer and for a period of two (2) years after … he or she will not have any direct or indirect interest in or perform services for … any business which derives more than ten percent (10%) of its revenue from selling submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches and which is located with three (3) miles of either [the Jimmy John’s location in question] or any such other Jimmy John’s Sandwich Shop."

Fortunately, PAs are in enough demand that she was able to get it modified to a 20 mile radius and scoped to a particular aspect of the practice.

Many (if not most) EU countries require compensation for non-competes to be valid (usually at least 30% gross), and the non-compete can still be challenged in court if e.g. it applies to too large a geographical area (e.g. the entire state/country) or if it's broad enough to prevent the employee from finding work in the field.

As a consequence, almost no one ever does, except for very high level executives.

There's potentially plenty of point if you don't expect your employees to understand that (or be able to count on it)

It's nice to say that contracts are freely entered into. They are not freely fought over when things are disputed, however. We're not on an equal playing field if my employer can afford legal representation and I can't, and that's a very real financial threat that is a form of coercion.

In one of my previous gigs, the language of the non-compete was so broad that it engulfed in scope the entire industry - being legal language it was borderline ambiguous, one of those things you could argue either way. Anyway, that 'argue either way' piece could encompass what's basically the biggest and highest-paying employing industry in IT here.

One guy I knew there had told me that, after he got an offer from a new employer, sent them the non-compete of this current place - and never heard from them again. It was for a mid-level manager role in a large corporation in a very cautious (in a CYA way) industry. It was even worse because both of us has understood from management that they'll probably not enforce it, unless one of the partners feels resentful and could send the lawyers your way.

It has a chilling effect that's totally beyond the scope of the usefulness of the employer demanding the non-compete, especially when you encompass a whole industry.

I think that the right approach is to legislate to make them illegal (like in California, right?), or enforce some compensatory aspect like in some countries as people in this thread mentioned (eg. I'd love to be paid 70% of my salary during the period of non-compete). The most likely scenario in favor of the employee right now I believe is the courts having the employer show that damage was committed in order for the contract to be valid. I'm pretty sure this employer got around that by tying the non-compete+non-solicitation to stock option grants!

And in 2013, the TekSystems recruitment company sued its former employee (a recruiter) over a noncompete and it got upheld in Illinois court: http://paulporvaznik.com/court-can-shorten-overly-broad-non-...

"3. Question: Does an employer still need to have "adequate legal consideration" in a non-compete agreement?

Answer: Yes"

It appears they have to compensate you for the agreement. Federal courts have ruled that your wage is compensation for your regular duties and thus the non-compete compensation has to be a separate payment that is negotiable. A contract is not valid if a party receives nothing in return for it.

"Consideration to create a legally enforceable contract entails a bargained for, legal detriment incurred by the promisee OR a legal benefit to the promisor. Under the notion of "pre-existing duties", if either the promisor or the promisee already had a legal obligation to render such payment, it cannot be seen as consideration in the legal sense."

https://en.wikipedia.org/wiki/Consideration

The one job that didn't have a non-compete was a student job I held at the university while I was taking classes there.

None of them offered to pay me extra outside of the salary for 'consideration'. I've ended up switching which industry I work for with pretty much every job I've had (still software dev though), so it hasn't been an issue so far.

That being said, knowing that they're there has affected my decision making, including holding back on releasing games I developed in my spare time, to the point where I've been tempted to move to California to escape such bullshit.

(I live in France)

To go meta for a moment: I think that this sort of statement exposes a flaw that many of us have in debates. It's related to the "argument from ignorance" fallacy, but is not exactly the same thing.

I take it as one of my priors that people at news.yc are intelligence.

When lots of intelligent people argue for X, and X makes no sense at all for you, you should ponder with some real seriousness that perhaps N intelligent people are not insane, but, instead, you are missing something.

In this case, you say "They have literally no value to society".

This is not an argument. This is a conclusion, or an axiom.

Let me explain why I think non-competes are a good thing:

1) deontological: freedom to contract is always a good thing. It is a human right, and government has no legitimate moral power to remove that right from people.

2) Hayekian / information theoretic: I have local knowledge regarding both my costs and my benefits from signing a non-compete contract. Government legislators and bureaucrats, at some great remove, has almost no knowledge of either my costs or benefits.

3) pragmatic (overlaps #2): perhaps I am desperate to break into career field X and would pay almost anything to get in. Or perhaps my skills are much lower than other competitors. What can I offer employers that my peers can not? My willingness to sign a non-compete. Or perhaps I know that I will be moving in three years, and thus a geographic non-compete has no downside to me. Etc.

> you have literally no incentive to support non-competes...There is no rational basis...mystic powers

Your entire approach here is quite arrogant.

Consider, for a moment, that the other people on news.yc are not idiots.

That's not a strong argument either. You could substitute "contract" with anything. I say this as a staunch libertarian. Government restrictions aren't bad because "government", but because restrictions.

The free market works best when government restricts the freedom to restrict freedom. That's why cartels being illegal is good (they restrict competition), bans on insider trading are good (they restrict fair competition), etc. Non-compete restricts the freedom on the labor markets.

If you let people do anything they want because freedom, you don't actually get freedom.

That's a great turn of phrase. I'll try to use it the next time somebody asks me to summarize the GPL, which has similar restrictions built in as per Stallman's original intent.

To me it seems, banning non-competes, will create more competition.

Have you ever seen a large corp and how inefficient they are? The only reason they can remain large is because they can afford to buy politicians and legislation to keep their competitors small. Big Corp creates new regulations to protect their business, the most clear examples are in telecommunications and the music/movie/copyrightable industries.

If we removed more regulations today, the big corps would try and place them back to destroy their competition.

In a purely capitalist society wealth (power) accumulates at the top. Money creates money so whomever starts out with the most money tends to win. This is why highly capitalist societies turn into Dubai, with an ultra rich ruling class and a serf/slave class with little in between.

Just as an FYI (and apologies if you are already aware of this), but Standard Oil had already lost about ~25% of it's market share by the time it was broken up. Rockefeller had no influence in Texas and California where the wildcatters had moved to and found oil.

A regulation-free system is not a stable equilibrium, so the conclusion will not be regulation-free.

I'm reminded of the old adage "too much capitalism leads to too few capitalists".

Just because thousands of HN readers are intelligent engineers, founders, scientists, marketers, etc. doesn't make them legal experts, or political experts.

You assume that "freedom to contract" means that both parties enter with equal knowledge and equal bargaining power. In an environment with high unemployment (like we were not to long ago) it could mean that employees would jump at any job they were offered, out of necessity, even if it came with a nasty non-compete.

Government regulators can look at an overall picture and see that, statistically, in great numbers, there are overarching problems with the non-competes, like their being used with employees who don't have trade secrets.

No, it doesn't. I'm Hayek-friendly, so I don't think two entities EVER have the same knowledge.

"Freedom to contract" no more implies equal knowledge than "freedom to drink" implies equal knowledge of brewing, or "freedom to date" implies equal attractiveness.

In general, it's a good rule of thumb to archive written communications (paper or electronic) for any deal, but it's easier said than done when part of the negotiation takes place over the phone.

Once you get on the "less bargaining power = invalid contract" train, you may not like where it stops.

2) maybe I have better information than the government, but my potential employer has better information than either of us. I won't have a better picture of the local employment market than a business so I will easily get swindled.

3) allowing the desperate to sign a contract no wants to sign leads to a race to the bottom where everyone has to sign a non-compete. How can I refuse to sign if 99% of applicants will sign even if I am the best applicant? They will just say no to me and take the #2 applicant. The only way to fight non-competes here would be a union to form collective bargaining at which point we have lost the ability to make our own contracts as individuals entirely.

Here your #2 conflicts with your #3. If a person is so desperate to find entry-level minimum-wage work that she would pay any price to do so, then she doesn't actually have the freedom to negotiate contracts.

You may not be an idiot, but you do seem to be ignorant of the empirical evidence. Non-competes choke off innovation. It's that simple, and that well established.

Non-competes [0] are a tragedy of the commons. There's no incentive for any single employer, in a jurisdiction that allows non-competes, not to require them of most employees. Any employer who did that would be unilaterally taking a loss (the potential employees they can't hire because they're subject to their current employers' non-competes) with no corresponding benefit. But if all employers require non-competes, we demonstrably wind up with a less vibrant economy.

So, what is the libertarian response to a tragedy of the commons? Is it not to create and assign property rights so that someone has a legally defensible interest in protecting the common property? In this case, I would suggest that by outlawing non-competes, California has asserted that workers have a property right to the general skills and knowledge that they acquire by working. The word "general" is important here; companies still have IP rights to their specific techniques and processes. But companies cannot claim ownership of the worker's general knowledge; it belongs to the worker.

[0] I'm using the term as shorthand for "non-compete restrictions that don't require the employer to pay at least a substantial fraction of the employee's salary for the duration of the restriction".

I think history shows that this kind of thinking leads to bad outcomes. The main reason is that there is power unbalance between employers and would be workers. In natural state of the world the workers would just take resources by force and share. As we are guaranteeing that this won't happen (by enforcing property laws) we need to give something back as well to people in worse negotiating position (worker rights, minimum wage, some contracts being illegal are all example of it).

-

A good thing for whom? It is good for lawyers and others who benefit from writing contracts.

Imagine for a moment a world in which you sign a non-compete before ordering a burger. It sounds silly, but sillier clauses are signed in order to purchase far cheaper consumer goods every day.

Is the world really a better place because two parties are hypothetically able to achieve their longtime dream of finally combining a legal instrument and a sandwich? Are you excited that you "have local knowledge" and are ready to exploit this knowledge to review legal terms with counsel before ordering your burger OR is this hypothetical benefit dwarfed by a very real huge volume of people who aren't going to hire a lawyer to negotiate a contract of adhesion for a $10 purchase when under social pressure while they're dining with someone else?

Freedom to contract is not always a social good. It introduces complexity, and complexity creates friction which prevents people from participating optimally in a market and prevents the market from clearing. Contract innovation is not optimal for the burger market.

What is optimal is common law, which is mostly the same everywhere so that an entire society understands how it works. It's how the police know what to do when facing a diner who didn't pay their bill, it's how you know what to do when the order is wrong, it's how a business can hire employees who know all this stuff without training them on custom procedure. Standardization is optimal for the vast, vast majority of transactions, so that people can get on with whatever they do when they're not negotiating legal instruments. The benefit of designing something bespoke for some marginal case is dwarfed by the cost of increased complexity of the transaction and the deviation from the established standard.

If you believe that job contracts are so positive and innovative, insist on reviewing one as a condition of doing an interview. If it is really about local knowledge, surely it will be positive for all involved to develop that knowledge early and comparison shop. In reality people will look at you funny and probably decline, because the real function of that contract is to appear after you've decided to take the job and exploit social pressure in order to get a stronger deal for the company.

He could prove they're detrimental in some way, but that's different than proving that they have no positive aspect for those groups.

It sounds to me like he has already stopped and pondered it, and came away with nothing. Then he posted here, offering people a chance to correct his ignorance.

So far as I can tell, he's done everything correctly.

Seriously? There's nothing arrogant about the OP's post which expresses dismay that others as employees (not founders or CEO's) would support having such restrictions put on their careers.

> Consider, for a moment, that the other people on news.yc are not idiots

Parent didn't accuse anyone of being idiots, nor did they frame their concern in terms of intelligence or likewise..

Your post is thought provoking, but you ruin it in those last two sentences.

Fundamentally, you should have the freedom to work in your profession without fear. If a Jimmy John sandwich makers skills are precious things, there's an easy way to retain those skills -- pay the worker what they deserve.

If you think that's unfair to the business person, that's fine, but don't call yourself a capitalist or a good person.

Hardly. Freedom to contract would be a good thing if we could assume that the sides stand on more or less equal footing, which is almost unheard of in the case of corporations and people.

>I have local knowledge regarding both my costs and my benefits from signing a non-compete contract.

No, you don't. The non-competes don't cost you anything until an uncertain time in the future. Unless you can predict the labor market that will exist when/if you leave the company (and you can't) you can't actually know what the cost will be.

Limited government has limited power to enforce contracts. Take, as an example, an assassination contract. You can write one up and sign it. If you or your hit man later breach the contract, you cannot sue each other in any civilized government's civil courts. You may, however, be able to engage a black-market arbiter to resolve your dispute, and that arbiter may allow terms of the contract that are otherwise illegal to be considered in rendering their judgment.

This is, in effect, saying that no government court will honor any non-compete clause in a contract. It is not saying that you cannot put such clauses into your contracts. But you won't be able to convince the government's justice services to enforce it for you (at lesser cost) if you do.

As government is widely considered a social contract for mutual benefit, a democratic form can certainly alter it such that government power is less readily wielded by those who might use it to harm or exploit the people. Businesses that use non-compete clauses can either assent to the change or start shopping for new jurisdictions.

With respect to your #3, having to pay an arbitrary and unnecessary barrier to entry in order to work profitably using a particular skill set is, in my opinion, unconscionable. It is indicative of an environment where the worker has little bargaining power. Any sane group would band together and use their collective power and mutual self-interest to halt that extraction of rents from their members. Since certain types of worker seem to be knee-jerk opposed to collective bargaining organizations, that leaves government edict.

Your #2 cannot be generalized. It can only be fairly judged on a contract by contract basis. But when enough unconscionable non-compete agreements cross a legislator's desk, the practice is judged by the worst examples. And the worst examples are when big companies collude to depress worker wages, using agreements that are non-negotiable and provide no tangible benefit to the employee. Some people were abusing it, and the only cost-effective way to stop the abuse also stops many of the legitimate uses.

You're right, it was unintentional but I can see how what I wrote could be perceived this way. My apologies. I am clearly acknowledging the intelligence of other posters by attempting to make a clear case for my position. If I did not believe that other posters were intelligent I would not engage in the discussion at all.

> 1) deontological: freedom to contract is always a good thing. It is a human right, and government has no legitimate moral power to remove that right from people.

Freedom to contract implies that both parties to the contract have bargaining power. In an employee/employer relationship this is mostly untrue. The only bargaining power that the employee has is simply to walk away. Legally any term of a contract is supposed to be met with "due consideration". In an employment contract, typically the offer of employment is treated as "consideration". I argue that a non-compete is so onerous as to require additional consideration beyond a mere offer of employment, however this is rarely if ever given. As an employee you may only choose to accept it or walk away, unless you individually have some unique position which grants you bargaining power.

While I am generally opposed to government regulation, if we had an absence of all regulation it leads to less freedom for individuals, not more. Or rather, it leads to less freedom for the majority of individuals in favor of more freedoms for a small number of individuals. This is not beneficial to society, and thus this argument does not refute my statement "They have literally no value to society."

> 2) Hayekian / information theoretic: I have local knowledge regarding both my costs and my benefits from signing a non-compete contract. Government legislators and bureaucrats, at some great remove, has almost no knowledge of either my costs or benefits.

This is possible, but isn't a societal argument. This is an argument that says there may be value to you as an individual employee due to local knowledge, but it doesn't mean there's a larger value to society. I accept that it's possible to have local knowledge that gains you a benefit from the non-compete. Such as: You have some special skill that is required by the employer. You are one of the few people with that skill. The employer both /must/ hire you and /must/ keep the non-compete in the contract. This provides you local knowledge which could allow you to bargain for an outsized salary or bonus compared to others in your field, or to get special severance arrangements to counter-balance the non-compete.

In this case, it might be possible that the insistence of the employer on the non-compete provides you individual value. Although, I'd also argue that the terms of the non-compete are not valuable to you, it's the fact your opponent in the negotiation won't let it go and your knowledge of what that is worth that lends it value. In either case, it doesn't give it value for society as a whole, so this does not refute my statement "They have literally no value to society."

> 3) pragmatic (overlaps #2): perhaps I am desperate to break into career field X and would pay almost anything to get in. Or perhaps my skills are much lower than other competitors. What can I offer employers that my peers can not? My willingness to sign a non-compete. Or perhaps I know that I will be moving in three years, and thus a geographic non-compete has no downside to me. Etc.

In this case, your desperation as an individual implies you don't have the bargaining power necessary to negotiate a contract fairly. Your willingness to agree to a coercive term is a sign of desperation, not value. This argument establishes neither a societal value or an individual value to the terms of the non-compete.

If your skills are lower than your peers, then other employers are less likely to hire you away. If the company hiring you is trying to get you to agree to a non-compete because they intend to train you to increase your skills, then a fairer method would be to increase your compensation as your skills increase with the understanding that your increased skills increase your value as an employee. The non-compete is unnecessary and exists again only to provide coercive action against you. This argument neither establishes a societal value or an individual value for the non-compete.

If you know you're moving in three years and the terms of the non-compete are strictly geographic, then you have local knowledge which means the non-compete cannot harm you. It doesn't provide any additional value you for you, but you've managed to nullify its downsides for you individually. I'll concede this one neutrally on an individual level that this provides some level of local knowledge (in the vein of your 2nd argument) that assists you in contract negotiation. This argument though fails to establish a societal value.

Again, this argument fails to refute "They have literally no value to society."

I cannot prove a negative, but I spent quite a bit of time thinking about why they exist before I wrote my original post. I could not come up with any reason why non-competes are valuable to society. I could not come up with any reason why they are valuable to employees. I could only come up with reasons why they might be valuable to an employer and narrow cases where an employee might use them as a bargaining chip but only in a way which nullifies their downsides. There is no upside to an employee for a non-compete. None. They restrict freedom of movement in the labor market and arguably lower the overall innovative output of a society.

I reiterate my original statement. "They have literally no value to society."

Intelligence is just the ability to precisely handle complex intellectual structures. It doesn't make those structures meaningful or accurate.

What's that quote again? Ah, googling found it.

“I make mistakes like the next man. In fact, being--forgive me--rather cleverer than most men, my mistakes tend to be correspondingly huger.”

I disagree. In an unbalanced relationship, the more powerful can take advantage of their power and impose contracts that leave the less powerful significantly worse off. If your choice is, for example, to contract to surrender your statutory rights or be unemployed, the freedom people have is the freedom to be worse off or much worse off. I wouldn't say this is a good thing. We rely on government and (if we're lucky) unions to prevent this freedom.

That's a strawman, since it assumes that only insanity or ignorance makes people favor a position that's bad for the general public. There are much more probable causes for such a view, such as personal interests.

>1) deontological: freedom to contract is always a good thing. It is a human right, and government has no legitimate moral power to remove that right from people.

This is not an argument. This is a conclusion, or an axiom. ("Because human rights" are not an argument either. See where how deep this rabbit hole goes?).

Second, it can be argued that freedom to contract is NOT "always a good thing". It's a good thing only when one side is not far more powerful than the other to the point of forcing the contract. When one side is coerced to sign (because e.g. else they cannot find employment in SV because all employers require non-competes), then it's not a freely chosen contract clause anymore, nor a free job market.

Third, even if freedom of contract was "always good", still what's good thing for an individual, is not necessarily a good thing for society.

Stealing and cheating, for example, can be good for the person doing it, but it's not good for society (and even less so in many people start doing it).

>2) Hayekian / information theoretic: I have local knowledge regarding both my costs and my benefits from signing a non-compete contract. Government legislators and bureaucrats, at some great remove, has almost no knowledge of either my costs or benefits.

That's a naive view that assumes government as some removed from society enemy entity. In a democracy a government is the representation (imperfect as most human creations are) of the will of the people, and laws are based on historical experience and reasoned arguments, with input from people "in the field" in drafting them.

Also, government has much more complete information and view of the overall societal cost of non-competes, whereas you as individual mostly have your local knowledge to go by and personal gain as your guide (assuming of course you're freely entering the contract out of calculation, and not because employers have created a trust on the issue, and you are left with no other option).

>3) pragmatic (overlaps #2): perhaps I am desperate to break into career field X and would pay almost anything to get in. Or perhaps my skills are much lower than other competitors. What can I offer employers that my peers can not? My willingness to sign a non-compete.

Or offer to have sex with them. This rabbit hole also goes very far...

Now let's get down to the real business of your arguments.

> Freedom to contract is always a good thing

This is only true if the people signing the contract are not coerced, whether by force or by poverty into signing that contract.

> Freedom to contract is a human right

So then you agree that it's a human right when it's not coerced yes?

> Government has no legitimate moral power to remove that right from people

It does if you follow the social contract. It does not remove the right but it does impose restrictions that follow from other human rights. It definitely has a legitimate moral power to impose restrictions. Whether you consider governments in general to be legitimate or moral is up to you but in this case? We have loads of precedent showing that in certain cases it has been absolutely necessary for governments to impose restrictions on contracts. Not to mention that we have courts, which you do not address. Are courts the only place where the judge or jury of your peers has a legitimate moral power to remove or impose restrictions on contracts?

> I have local knowledge regarding both my costs and my benefits from signing a non-compete contract.

Quite an assumption to make.

> Government legislators and bureaucrats, at some great remove, has almost no knowledge of either my costs or benefits.

I can agree with this though it would have to be supported; they do collect all sorts of data so they may have some knowledge, greater than "almost no knowledge".

The argument against non-competes is that they place limits on freedom of speech and freedom of expression. They put a limit on employment options as well and are harming my future earnings which are very much real in contrast to the imaginary losses. Willingness to sign a non-compete is not a competitive advantage for employees, it's the equivalent of saying "I am willing to be treated like a slave" or "I will work for free". It's degrading and violates fundamental human rights. You cannot be in support of less restricted commerce and still support non-competes. You cannot be in favour of fundamental human rights and still support non-competes which take away or immensely restrict those rights.

Your arguments, in the end, contradict one another. I will not comment on the arrogance of your approach here.

Often called "Panglossianism" as per Voltaire's character in Candide:

> Dr. Pangloss was the pedantic old tutor in Voltaire's satirical novel Candide. Pangloss was an incurable, albeit misguided, optimist who claimed that "all is for the best in this best of all possible worlds." So persistent was he in his optimism that he kept it even after witnessing and experiencing great cruelty and suffering. The name "Pangloss" comes from Greek pan, meaning "all," and glossa, meaning "tongue," suggesting glibness and talkativeness.

The idea that there's always a good reason for every societal practice that we currently observe is arrogant too, just in a different way.

Whoah! Way too close to home. Only 1 kid and 70% underpaid.

Non-competes ask employees to give up something extremely significant: freedom to work there they choose. Which I have no problem with if they get something significant in exchange.

Let's an employer wants some insurance that I won't go work elsewhere because there is going to be a long training period or what not. I expect significant compensation for that, ideally in the form of a large signing bonus, maybe 50k per year of non compete.

Don't want to pay 50k in cash up front per year of non compete? Take out the non compete. Simple negotiation.

I guess the problem in practice is that employees just sign their employment contract no matter what it says, which is unfortunate.

Apart from that please shove your non-compete there

In other words, the problem is that they are coercive. Employees usually sign because the company has more legal power and can be intimidating or because they could be homeless.

I agree that contracts can be intimidating, but they shouldn't be. Non competes, like most things, can be spelled out in totally ordinary English that anyone can comprehend. Rather than having to create 1 law against every possible employee-adverse thing an employer might put in a contract, I would much prefer a law that mandates employee contracts be easily understood by an average employee.

Yes, we would! And they try really hard to do that.

> I've seen non-competes in contracts with 150k+ compensation. Getting 150k to do something is not coercion, it's an exchange.

When you're generating value in excess of double that amount? It's coercion, you aren't get paid your worth. We've actually seen this with the big tech companies like Intel, Google and Adobe. They kept salaries down for over 4 years so that 150k and a non-compete actually is a huge hindrance and it is coercion.

"The doctrine of at-will employment can be overridden by an express contract or civil service statutes (in the case of government employees)."

Every time I've challenged someone on this point, their objection turns out not to be about plea bargains per se, but the (unrelated) fact that the law permits such severe punishments in the first place, defendants have insufficient resources to fight them, and prosecutors have therefore enough leverage to secure them at all.

But that's not an argument against "plea bargains"; its disgust at the whole system and misattribution to one part.

I agree the extreme and severe punishments exacerbate the problems with plea bargains but plea bargains are bad by themselves, in isolation, even if other punishments are fair.

The government should NEVER be in the business of giving people special treatment and rewards for waiving their fundamental rights because it's more convenient for the government. Everyone has the right to a trial, but people who exercise it are punished. Which means people don't REALLY have a right to a trial. Imagine if the government promised it would tax people less if they chose to avoid engaging in political speech critical of the government. This case is identical to a plea bargain. Except it's less serious, since it's about money, not about jailing somebody.

I'm okay with someone pleading guilty and throwing themselves at the mercy of the court and asking forgiveness. Then it's up to the human beings in the trial to decide how to handle it. Creating a formal system where you do this in exchange for something tangible? Before a trial? No. Innocence or guilt is too important to be bartered like that.

- someone pleading guilty in return for an indefinite punishment, but not a definite one, and

- someone getting a more time in the horrible, horrible cage because the trial found them guilty but not less because they realized they would lose

- someone getting mercy from the court for pleading guilty, but not "getting special treatment and rewards for waiving right to trial" (which a guilty plea is)

- someone leaving their fate in the hands of a capricious, unpredictable jury, but not leaving their fate in the hands of a capricious, unpredictable sentencing judge for the guilty plea

I just don't see a consistent preference ordering that spits out "plea bargains should be banned".

-If the CJ system gives out indefinite punishments for trivial things, that's a problem unrelated to plea bargains. The solution isn't to make things even worse by allowing prosecutors to abuse the extreme sentences to force people into (sometimes false) confessions.

-Why should someone get years of freedom over someone else because they were law-savvy enough (or paid someone law-savvy enough) to realize they were going to lose and gave the prosecutor a sweet deal to make his job easier? Why create an even more uneven distribution of sentences based on who understands the system or can pay a lawyer to understand it?

-The court is set up to be run by humans; they can take mercy on whoever they like. We've chosen to set up our laws that way and I'm pretty ambivalent about whether or not that's a good thing. But even so, that's after the court has found that they are guilty. Mercy can only be applied after guilt is accurately and appropriately assigned -- something plea bargains make impossible. They induce false confessions (it's often the case that an innocent person would spend more time in jail waiting on their trial than they will if they plea bargain -- many decide they don't particularly like jail and take the plea. Not to mention the threat of a bigger sentence). They distort the findings of the court as prosecutors do not try to jail the person for what they can prove they did, rather they use the potential threat of what they might be able to suggest a person did in the future to provide the punishment.

-The law is always capricious and unreasonable. It is a human institution and it's adversarial. If someone is given an unreasonable and capricious sentence it's the fault of the prosecutor who pushed for an inappropriate charge (and happened to win anyway), or the judge who abuses his power to punish the person, or the lawmaker to design laws with appropriate punishments.

Plea bargains can make punishments more consistent and predictable -- everyone is guilty whenever they are accused. Their sentences are milder than technically could be possible but guilty nonetheless. For the unlucky few who have the audacity to maintain their innocence in the face of a prosecutor on the attack, well, capricious and unreasonable is exactly the name of the game. The phrase "throwing the book at you" exists for a reason.

The real point which I don't think you touched on is the simple principle of the government giving citizens special rewards and treatment for waiving their fundamental rights. It shouldn't happen if rights are to remain rights. Why shouldn't congress pass a law saying no taxes for people who sign a pledge to give the government permanent permission to search through all of their documents, computers, affairs, so they waive all protection against search and seizure? It's purely voluntary. Why should citizens subject themselves to the capricious and unpredictable execution of search warrants when they can just come home one evening to a police officer politely saying hello as he rifles through their closet? It's much better than a ridiculous unpredictable SWAT raid at 4am. And they get rewarded for it!

I think you're making my point for me -- to prevent the "plea bargains are bad" position from painting you into a corner, you attribute the inconsistency to the horribleness of the CJ system itself. That was my point all along! The problems you describe are problems with that selfsame horribleness:

A) Punishments are excessive.

B) Defendants get insufficient advice.

C) Trials (and waiting for them) take too long

D) You are detained (from excessive bail) while waiting for the trial

E) Prosecutors are likely to get convictions even in the absence of guilt.

F) The system is so capricious that people are willing accept a large punishment in lieu of riding it out for the true final judgment.

G) A-F lead to people people confessing in the hopes of leniency rather than because of literal culpability.

Hence my point -- those are the problem. If plea bargains were an independently bad thing -- let alone "the" obviously wrong thing that should be prohibited (on the level of non-competes etc), then it follows that we would be better off removing plea bargains even if everything else remained in its current state of horribleness.[1]

But that implication is emphatically not true! If you just banned plea bargains, A) punishments would be just as excessive, B) defendants just as flat-footed and likely to lose at trial, C/D) people would be in detained limbo even longer waiting for every last trial to play out, E) unwarranted guilty verdicts for the longer punishments just as likely, and F) a capricious/over-the-top punishment still waiting for them at the end.

And for the cherry on top, G) people would still be pleading guilty, still waiving their right to trial in the desperate hope that some judge might show mercy, and still being effectively rewarded for it!

And yet, I still wouldn't see the preference ordering under which that's better.

Would you say the same thing about plea bargains if A-G were removed? Criticisms would be far less defensible: imagine that the punishment for shoplifting is something relatively mild (one month plus record expungement) and a defendant were expecting 90% chance of conviction based on expert advice. The prosecutor offers a week in return for a plea, and the trial would happen in about a month and last a day. Do you really think it's an improvement to force the defendant into a trial or "whatever the judge gives them for a guilty plea"?

[1] Would you be able to say the same for the other horrors you mentioned? Non-competes, mandatory arb, etc? It seems that removing them and changing nothing else would be an improvement.

Of course I think removing plea bargains and changing nothing else would be an improvement (no hassle-free imprisonment and brutal torture perpetuated by the state? sounds great!).

If you're thinking something like "oh yeah, every charge should go to trial, and we should fund it better so there's not a ginormous backlog, and require a big burden of proof before you can detain someone awaiting trial" -- well, that doesn't count, as it's changing the court funding and bail policies too. As it stands now, making every charge go to trial means waiting ten years for a trial. Doesn't sound like an improvement to me.

Do you also accept the implications of the scenario I gave, in a post-A-G world? Where, rather than take the lighter punishment, you prefer that the defendant risk the heavier punishment or put himself at the mercy of the judge?

A non-compete allows a company to make an investment in you (in the form of training) with some assurance that you will not immediately turn around post-training and go work for a direct competitor. NDAs/IP assignment agreements do not address this need. If it weren't for non-competes, that investment would be infeasible and we would all be paying our employers for the training we get – either directly, in the form of course fees, or indirectly, in the form of depressed wages during the course of the training.

Edit: For a deeper dive on this, see Paul H. Rubin and Peter Shedd, "Human Capital and Covenants Not to Compete," available at https://www.jstor.org/stable/724227?seq=1#page_scan_tab_cont....

As an employer, after investing in training an employee you only need to ensure that you get an acceptable return on investment before the employee leaves. You want to prevent the employee leaving, so your agreement should specifically target that.

Non-competes are overly broad here and this has the consequence of making them coercive and punitive, both completely unnecessary. The non-compete doesn't guarantee your ROI except as a knock-on effect of its coercive nature. It only prevents your (former) employee from working at all. A net negative for society and arguable for you as an employer.

NDA + non-solicitation: You can't start your own HVAC company by handing your sales person a copy of my client list and calling everyone who currently works with me.

Non-Compete: You can't start your own HVAC company. Full-stop.

Do you see the difference? Do you understand why one is reasonable and fair and the other is not?

I'm in a right to work state though and that means that noncompetes don't hold up at all unless they have a reasonable and non excessive scope. In a right to work state nobody can prevent you from earning a living so in order for a noncompete to hold it has to ensure that you have plenty of other options in your field in the area outside of the scope of that agreement.

I think we are talking about the same thing just using different terms.

What you just described is a textbook non-solicitation agreement.

A non-compete would read something like: "You covenant and agree that, during the term of your employment with the Company and for twelve (12) months after the termination thereof, regardless of the reason for the employment termination, you will not, directly or indirectly, anywhere in the Territory, on behalf of any Competitive Business perform the same or substantially the same Job Duties."

In a contract, terms like "Competitive Business", "Job Duties", "Territory", and "Company" would be previously defined. What this says in essence though is that for 1 year after your termination (either you quit or are let go) you cannot do the same job anywhere within the "Territory" which could be the city, state, country, region, or world-wide depending on how its defined in the contract.

So, let's say in your HVAC example. A non-compete says you cannot work in HVAC at all for the term. A non-solicitation, like you says prevents contacting clients of the "Company".

I'm 36 years old, have run a business and dealt with a lot of contracts like this for clients in the area and this is the first time I've ever heard of a specific "non-solicitation" agreement. My guess is that's because around this area it's what we understand a "non-compete" to be.

I can't imagine anyone would ever sign a document that said they couldn't work in their field at all because they worked for this company.

Yep, but they do. Even Jimmy John's was making employees sign a non-compete saying they wouldn't work for any competing fast food delivery chains if they quit. E.g. if you drove for Jimmy John's you can't quit to drive for Domino's. http://fortune.com/2016/06/22/jimmy-johns-non-compete-agreem...

They got sued and lost, but thousands of employees signed them because their only alternative was to not have the job or possibly any job.

"Right to work" means you have the right to work without being required to join a union, i.e. it bans union shops where one must pay union dues or lose their job [2]. It is a response by 26 states to federal collective-bargaining laws.

[1] http://www.nolo.com/legal-encyclopedia/understanding-noncomp...

[2] https://en.m.wikipedia.org/wiki/Right-to-work_law

http://www.scnoncompetelawyer.com/

"A covenant not to compete will be upheld only if it is:

(1) necessary for the protection of the legitimate interest of the employer;

(2) reasonably limited in its operation with respect to time and place;

(3) not unduly harsh and oppressive in curtailing the legitimate efforts of the employee to earn a livelihood;

(4) reasonable from the standpoint of sound public policy; and

(5) supported by a valuable consideration.

* * * *

If a covenant not to compete is defective in one of the above referenced areas, it is totally defective and cannot be saved."

Generally speaking, so-called right-to-work laws are about preventing an employer from requiring that all employees join a union. Maybe some of those laws are worded broadly enough to also cover non-compete contracts, but I've never seen any real indication of that being the case.

I do not think this proposal makes the distinction that you make. Both are in the crosshairs.

> Client lists, contract terms, sales strategies, reported metrics, financials: covered by NDA and in some cases SEC regulations about insider trading.

This is largely unenforceable as I'm sure you're aware. The fact is that legally preventing someone from working at a competitor is simply the only effective way of deterring IP getting to a competitor.

From a macro level, non-competes are awful. The economy as a whole does much better (is more productive) when the best labor is free to chase the most productive uses of capital. (And vice versa) Successful companies are constrained by the existence of non-competes, because they have a reduced pool of employees to hire. They may still do them for their own employees, but they can't take the step without everyone else taking it too. (A variation of prisoner's dilemma)

I'm generally a small-government low-regulation person, but this may be an instance where companies need to be nudged as a group to accept something that will help them in aggregate.

I know you probably know this, but it doesn't have to be laid out explicitly to be compensated. The compensation would be present silently through higher wages, better perks, higher vacation etc. Workers evaluate the sum total of the costs and benefits of a job when deciding to work somewhere. It can be argued that workers don't always make the best decisions for themselves, so we should restrict their options, although to do that you have to show that the government makes better decisions for them which is sort of difficult.

An ordinary person would rightly believe that 100% of their job compensation is in exchange for doing their job, and that any additional bonus compensation for doing something else must be explicitly laid out in a separate contract.

In order for what you say to be true, jobs with non-compete agreements should in aggregate pay more than jobs without them. I do not have that data, but I believe that they actually pay less, due to the tautological competition-suppressing effect of non-competes.

It sounds like it would be beneficial to list out each of the non-monetary advantages and disadvantages of a job and how much money they're each worth, but in reality there's too many [1] to make that practical. Not only are there a ton of these unseen effects but their value is different for each individual.

One person may value their ability to take another job at a competitor quite highly while another may not. And that's the case for all these unseen effects.

[1] Examples of unseen effects that make the implicit wage different from the explicit one:

* having to sign a noncompete

* do you like the sorts of people you'll be working with?

* do you like the tasks you'll be working on?

* do you have flexible hours?

* do you like the place where you work?

* do you like the length of the commute to work?

* do you like the smell of the rhododendron's outside your office window?

etc.

In practice that probably isn't necessary because the employer doesn't see much benefit from having a non-compete. Workers are no more qualified to work for their competitors after having worked for subway for a year than they were when they were first hired.

As a developer pretty much none of these matter or protects anything.

Imagine this scenario; - John has no idea about video encoding but a good developer.

- John joins to a video encoding startup

- This startup encodes videos 3 times faster than the competitor

- After working on the core product for 2 years, John knows a lot about video encoding, because he's been trained. He also knows why they can do faster than anyone else. It's not one thing, bunch of things.

- Then John receives an offer from the competitor with 50% more salary (obviously this is smart thing to do for competing company). He obviously leaves, because 50% more! All the know-how, experience etc. will be just automatically transferred to this competitor. NDA, copyright etc. nothing can prevent it.

So how is this good for anyone but John? If you think this kind of stuff doesn't happen and all this kind of advancements are public domain anyway, you are wrong. There are many niche fields where competing advantage comes from technical excellence and understanding couple of key things better than your competition.

Not to mention John will have inner knowledge of so many other non-technical but important details that can give obvious unfair competitive advantage.

When non-competes are removed companies do need to treat their employees differently. "If I don't trust this employee enough I shouldn't give them the important bit of the source code, shouldn't train them on X know-how that we internally produced" etc. which is pretty bad for everyone.

Since the secrets aren't yours to share at will, they belong to the company, there's nothing that restricts your freedoms in an NDA. It's more of a covenant than a restriction. You're making a legally enforceable promise to not spread about things you know full well are supposed to be confidential. A non-compete however restricts your freedom of movement in the labor market and directly provides a tool for the employer to coerce your actions in and outside of work. There's a huge difference in consequences and incentives, while the NDA provides sufficient protection for the things that matter in your scenario.

If you are a developer and worked on a code for 2 years. NDA cannot cover what you know what you don't. Your know-how that you captured on that company can simply be replicated in another company. You'll write the code from scratch, and NDA or copyright, or even patent in majority of the cases will not be enough to enforce or stop such a think. In rare cases patent can solve it but do we want all companies to patent everything?

While employed, a person necessarily learns skills in order to perform their duties; as an employer, it would be impossible to derive value from the worker without training and knowledge transfer. Your argument is that it should be a two-way street until employment is terminated, then it becomes a one-way restriction against the employee. That's not fair to workers and is extremely biased toward the employer.

Employer pays the time for that employee to acquire the knowledge, employer serves the know-how that the employee might never ever able to learn by herself. How is it not reasonable to expect that knowledge to be used against the employer? Why is it one-way? I'm not talking about knowledge in a sense that "good code should include comment" kind of dev best practice. I'm talking about domain specific know-how that the employer came up with in many years by spending lots of money (R&D, trial & error, field studies etc).

How about the consumer/society as a whole who now widely benefits from advanced technology being proliferated through the industry instead of being hoarded by one company?

Secondly when you do that, aren't you actually killing commercial research? Why would I spend $10M to research something if one of my employees can just take that know-how and move to my competitor?

It's not going to happen because your logic is off a little.

Patents are there to promote growth to society, not to promote growth of the patent holder. It works because it's set up to be a win-win for both.

If at any point the patent system hurts growth to society, it should be revamped or eliminated.

Patents are not fundamental human rights. Nor are copyrights. They exist to serve the society, not the holder. Once they cease to do so, they should be removed.

So the question is: Do non-competes serve society's interests?

How about no-poaching agreements? They're almost like non-competes.

b) that company's value is based on a mix of value which they created and where they benefited from prior art. In the former case, copyright law would prevent John from taking source code and patents would prevent him from taking novel work. In the latter, passing on a trained employee is no more unreasonable than it was for them to benefit from the long history of work which they also benefited from without having to pay for it.

So how long should John be banned from working for a competitor for exactly? 5 years? 10 years? Until his current employer says he can?

What if John leaves and starts an open source project doing the thing he's learned how to do really well? Should he be stopped from writing code in a particular domain as a hobby?

What if John leaves because he's had a brilliant idea that his current employer refuses to listen to? Should John be banned from starting his own competing company? Should an employer be able to restrict an idea from getting to market when they're not using it themselves?

This is good for society, because society gets more competitive labor markets and more competitive video-encoding markets. This encourages the spread of high-quality products and technical knowledge at low prices.

Remember: companies exist to supply a product efficiently. You are not entitled to get rich by rentiering on ideas.

If you want to keep John from working for a competitor, just agree to pay him his salary for two years after he stops working for you, while he goes on vacation around the world. The amount of competition and poaching you want to avoid should be priced in terms of years of salary you're willing to pay in exchange for non-labor.

Say you ran the marketing campaign at X and through extensive testing you discovered what works in the space X is in, now you go to competitor Y. Are you going to cleanse your brain of everything you learnt at X or are you going to apply the learnings at Y ?

The reality is the reason Y hired you is to get the learnings that you got from X, what you learnt could save them years of work and reduce the competitive edge that X has.

The exact same thing applies to developers. Say you built a ML model for driving cars at Google and now you're working for Apple on a similar project. You're not going to copy and paste the code you built at Google but you're 100% not going to go down the dead-ends that Google went down because you know they don't work.

Of course there's overlap. But the issue that people have with non-competes (especially broad ones) is that they effectively try to limit all knowledge transfer that may benefit a competitor directly or indirectly. Especially when this gets to a point of prohibiting people from working in a given profession or role for anyone else without any compensation, this seems wrong.

Somewhat related, where folks usually get into trouble is reuse of intellectual property or derivative works. IP laws actually have teeth and are enforced in numerous countries.

It doesn't matter if they'll eventually lose. Just as long as they can play legal chicken with you and get you to give up because you don't want to waste all your money on lawyers defending yourself.

...well, now imagine an industry where sales oriented companies have essentially no stable book value. They cannot get loans securitized by the value of their book, and therefor cannot invest in growth or innovation. In the end it is a race to the bottom.

A reasonable balance exists whereby employees are bound by a 2-3 year non-compete clause that prevents them from stealing clients. Markets are still competitive within 2-3 years, and since everyone has these clauses, employee value is retained.

This is why they are a valuable part of an agreement. Including a non-compete means that your contract is lower risk for the employer, which can mean higher salary or better retention. Early termination terms exist for the same reason.

That said, a non-compete which prevents you entirely from practicing your craft would be a hard one to enforce, I've certainly never seen a contract like that.

If there are non-compete clauses in entry-level food service jobs, I hardly think they would bother to enforce them. The loss of a burger flipper from a McDonalds to a Burger King is less than the cost of lawyering them into a pit of despair.

Well at least one fast food company forced employees to sign non-competes up until earlier this year: Jimmy John's sandwiches: http://fortune.com/2016/06/22/jimmy-johns-non-compete-agreem...

They are the large number of libertarians who believe all regulation is bad under all circumstances. Mental contortions follow to justify it in this case.

[1] https://www.contractstandards.com/clauses/non-solicitation

A list of clients that you have an established relationship with is to sales what experience with a set of technologies is to software engineering.

The sales industry relies on account executives being able to take their address books with them. If that stops happening, everybody loses.