We really need general regulations on non-competes. Bare minimum, it should be required that a company pay you a full salary if they want to block you from seeking employment elsewhere with your skills.
If a company really cares that much about stopping competitors from taking advantage of your skillset, they need to be willing to pay up.
On top of that, non-competes shouldn't be enforceable on employees who are laid off or fired. If a company doesn't want to retain an employee, they shouldn't have any say over what that employee does with their skills afterwards.
This seems like the barest of minimums, yes. I conceptually understand wanting to ensure an employee can't use their connections at your company to then "cut out the middleman" and deal direct for a better cut. But obviously if a company lets you go, they are no longer choosing to invest in that employee's skills.
But then if you want to avoid the non-compete you would just get fired on purpose.
Classic unintended consequence of regulation.
But I do agree that non-competes should be illegal or somehow highly disincentivized.
Regardless of the specifics of any regulation, the burden should be on the company and should err on the side of the employee’s benefit. It’s never fair to pit an individuals livelihood against a corporation.
Preventing a sales person from soliciting their former customers is entirely covered by a non-solicitation contract, and claiming that a non-compete agreement is needed is a total straw man.
That's different than what non-compete contracts are used for, so that's a different discussion entirely. A corporation that abuses non-competes can destroy an individual's life. There's no real reverse of that, and stealing trade secrets is already covered by law (see what happened to Anthony Levandowski).
It's completely unfair to pit an individual against a corporation. For the individual, a lawsuit related to a non-compete can consume their entire life for years while everyone working at the corporation has no real skin in the game. They'll go home and night and live their lives. Worst case they have to work late. It's not comparable at all.
It's better for a corporation to be wronged by an individual, than for an individual to be wronged by a corporation. So the law should err on the side of the individual.
To answer your question directly: frankly I don't see why not. Why can't the clients choose to change vendors? Is it not a free market? Are clients really going to change vendors just to still have the same sales rep?
A salesman doesn't exist as an island. He's selling products or services from a particular company, no? And if he leaves, he would then be selling products or services from a different company. Yes, maybe some clients will like the salesman enough to switch suppliers, but surely the fact that it's a different company with at least somewhat different products/services matters too, no?
Yes, happens all the time, and it’s not a big deal. There’s product and business strategies to help protect against that.
Also, it’s not as easy as it seems, and in cases where it is, it’s good for the overall economy: competition lowers prices the right way (unlike mergers and acquisitions).
I’m a dyed-red socialist so please explain something to me: why is this a net bad for society? Presumably the clients are leaving for a reason, so wouldn’t that just be the market doing what it’s supposed to (matching demand with supply)?
Why are all these lazy entitled companies not pulling themselves up by their bootstraps and doing everything they can to keep customers?
As long as "full salary" is defined as your total compensation. Financial firms set base salaries low relative to total compensation (bonus can be 200-500%+ base) so that your TC drops dramatically if you leave. Sometimes the next job will buy you out, but with 18 month non competes being common, sometimes you are just screwed.
I posted on the parent as well, but I find non-competes reasonable only if they are time limited (like 6 months to a year), very narrowly tailored and affect a very small number of job openings. I think Google blocking someone from going to Bing ridiculous, but a stoping a move from being the chief of staff at Google Maps to the chief of staff at Bing maps is far more reasonable.
If you are skilled in being the chief of staff at google maps, it is likely your highest market value is in that particular niche.
Restricting your employment opportunities to those where you don’t have the highest market value through the use of non-competes is absolutely unethical and needs to be banned.
I think the argument would be that if Google knows that Bing could hire its chief of staff at any time, that will cause Google to invest less in R&D because that R&D could fairly easily be obtained by a competitor.
I assume intellectual property law is sufficient to cover this case in practice though, because Silicon Valley is in California where noncompetes are unenforceable, and Silicon Valley is not exactly known for lack of R&D investment.
> How would a previous employer know what a former employee is telling their current employer...
They don't. What I learned while working for your company isn't your company's property any more. Good ideas almost always eventually spread in our industry. And I think thats a good thing for software as a whole!
You can protect your data, and your code. But you can't really stop someone quitting a job at your company, working somewhere else and reimplementing a software system that worked well. It might take years to do it, but probably not decades.
I honestly think this is a pretty good tradeoff. It means if you build some software, you have head start, but not an impenetrable wall. For someone to compete, it'll take a lot of time and money just to catch up with where you are today. So it'll be hard to do but possible. This leaves the door open for any incumbent to be outcompeted in the market if they stop doing good work.
And thats a good thing! Competition is painful, but it pushes us to make better products for our users. Ultimately thats better for everyone.
>You can protect your data, and your code. But you can't really stop someone quitting a job at your company, working somewhere else and reimplementing a software system that worked well. It might take years to do it, but probably not decades.
I don't even think this case is undesirable. If we were welders, it would be absurd to be prevented from using a welding technique we learned on the job at a new employer. System design is just a technique.
If it were a genuinely innovative new technique, it should be patented, which will grant exclusivity for some period in exchange for it _not_ being a trade secret.
Patents have become effectively unenforceable in many domains. The retreat to trade secrets is a reaction to this. Eschewing patents in favor of trade secrets is a common strategy these days. Ironically, this was the situation patents were intended to prevent, were they enforceable.
> What I learned while working for your company isn't your company's property any more. Good ideas almost always eventually spread in our industry.
You are only thinking about code. Imagine knowing all the dirty secrets about how your company screwed customers. I have seen employment contracts forbidding working for a customer, in addition to competitors and in addition to an NDA.
Again, that dirty laundry eventually being aired is a good thing for our industry. There need to be costs to being a scumbag, even if the cost is just to your reputation.
Not saying it isn't; just that there's another angle outside of software.
The "Front Page" ethics test is probably the best one I've heard: "What would people think if what was being done was reported on the front page of the NY Times or other major news outlet?"
There is no reasonable way to definitively control this, though explicit theft of trade secrets between companies is prosecuted in practice and dangerous enough that ethical companies are careful about even the appearance of impropriety.
Where trade secrets really leak (in tech), in my experience, is engineer to engineer. A chat between friends over beers about some technical problem. It is nearly untraceable and it doesn’t involve anyone leaving their job.
As a fun example, database tech is buried in trade secret restrictions and has been for decades. There is a classic problem in cache replacement algorithms that has no solution in literature. Nonetheless, an astonishingly elegant solution exists — the kind that you can’t believe you never thought of it yourself after you learn it — that has been selectively passed around informally among practitioners for (at least) a decade or two. No one knows who invented it but it was likely developed at one of the old database research powerhouses like Oracle, IBM, et al that have severe trade secret regimes. A trade secret that leaks isn’t a trade secret, but there are enormous punitive consequences if anyone knows who leaked it.
This kind of trade secret leakage happens even under non-compete regimes and it is pretty common. When it happens, the probability of figuring out how it happened is very low. It has to be part of your risk model.
How would any other signed document let "a previous employer know what a former employee is telling their current employer about what they know from their former employer?"
A non-compete agreement doesn't actually "prevent" an employee from working at another company any more than an NDA prevents an employee from divulging confidential trade secrets.
That's true of many illegal things. Trespassing is illegal, but people still put locks, gates, fences, etc on their property because people will still trespass if they want to. The purpose of the law is to dissuade people from doing it because there are consequences for that action.
If you're talking about trade secrets, I believe if there is evidence in the product/products that a former employees company is releasing that seems to be operating or working in a similar product they could gather publicly available evidence, hire a PI, and ultimately attempt to subpoena additional information if there is sufficient evidence that the employee is actually sharing trade secrets from a previous company.
As far as I'm concerned, if you can hold it in your head, it's probably not worthy of being protected as a trade secret, at least if we're talking about something technical like software and not a KFC recipe. Downloading a bunch of data like the Uber guy is obviously theft, but being able to remember, in general terms, how some software program worked doesn't seem protectable to me: there's no way you could really re-implement it the same way just from memory unless you have some truly superhuman memory skills. Any modern codebase is huge, the product of dozens of people or more, and not something one person can hope to remember well enough to make a real copy.
> Anthony Scott Levandowski pleaded guilty and was sentenced today to 18 months in prison for trade secret theft related to Google’s self-driving car program, announced United States Attorney David L. Anderson and John F. Bennett, Special Agent in Charge of the Federal Bureau of Investigation. Levandowski was also ordered to pay a $95,000 fine and $756,499.22 in restitution.
This is an extreme example. This guy downloaded gigabytes of data from Google before he left. The vast majority of cases are not like this and empowers world never know what their former employees tell subsequent employers
Trade secrets are protected by criminal statutes. Misappropriate trade secrets you go to jail. That is beyond any other protection. For comparison, company could commit wage theft, and no one is going to jail.
Look, I understand most of you here are on the employee side, but please try and think through how this works in the real-world. And not for mega-corps, but smaller business who have ~0% chance of litigating a trade secrets case.
There are dozens of small optimizations in my tech that where painstakingly discovered through years of research and iterative improvement. These are not cost-effectively patentable.
Even if you believe the trade secrets 'work' do you think companies are going to document every design of optics, electronics, laser frequencies, rf powers? Then if we did then we'd get a series of posts about how onerous the regular confidential info acknowledgement forms are for the employee.
Not to mention, once it becomes 'commonly known' via disclosure, it may not even be protectable anymore.
Non-competes sidestep all these issues. Sure, if they are overly broad its bad, but they have an important role to play.
Presumably if the trade secret is so important that the employee must absolutely not compete, then it is worth paying out salary and benefits during said noncompete.
Edit: My (possibly incorrect) understanding is that rather than having a blanket “everything is our secret” kind of contracts like we have now, the act requires the company to specify what they have that they consider a secret, and to show that they take steps to protect those secrets above and beyond regular day-to-day information exchange within their company.
For example, a list of customers would have to be explicitly identified as “secret”, and handled more carefully.
If a company really cares that much about stopping competitors from taking advantage of your skillset, they need to be willing to pay up.