Probably because you or your family are already established in Idaho? Grew up there? Elder relatives to care for? Spouse offered a hard to come by research position at a university?
Socially/politically conservative? Hate cities? Love the outdoors? Like to live somewhere affordab.... oh shit, the Californians have arrived with their bags of money.
Be careful you don't want to turn out like Oregon and attract all the rich hippies. Californian here who hunts in Idaho and it's my favorite state to visit. It still feels like the last secret place in America.
Hunting in Idaho is great, but would you take a job and relocate there? Granted, I'm in Washington, which is somewhere in the middle, but we're moving towards California's view (just like everything else).
Boise is my back pocket destination. If/when I get sick of California nonsense, I'd move to Boise in a heartbeat. No family there, just like the low key outdoor culture and low cost of living.
Idaho is so culturally and socially conservative though, #3 behind just Wyoming and Utah. I don't see it being a good fit for many SVers for that reason. I wouldn't mind visiting but living there long term sounds rough.
Having your personal human rights respected is about a lot more than just what a place "feels" like. There are plenty of SVers who, if they go to Idaho, will be discriminated against in a variety of ways, whether it's because they're immigrants, or LGBTQ, or a person of color, or like weed, or need good health insurance, or might need an abortion, aren't religious, want good public education for their children, etc. None of this can be "made up for".
I can think of a bunch of reasons why one might end up in such a situation, all of which point to systemic failures to protect the free movement of people:
1) Unfamiliarity with the law. People moving from states which protect the marketplace for employment from non-compete abuse (e.g. California) may not realize that such "agreements" even exist. I didn't, and was pretty surprised by them when I left CA after 7 years in SV.
2) Being required to sign a non-compete _after_ you've already begun the job, which is (AFAIK) legal many places, though I don't know about Idaho.
3) Asymmetric power in the "agreement", especially when larger employers (with legal departments) are involved. The scare quotes are there because the parties agreeing to the contract are not negotiating from comparable positions of strength, so I think the word "agreement" is a post-truth-type word.
IMO, a free market won't remain free without public policy support. I guess Idaho prefers a different sort of arrangement. That's their choice. Welcome to my personal blacklist, Idaho.
It's often not legal to require it after the fact as a requirement for continued employment since it is not a valid contract unless both parties receive something of value. I believe this is termed as consideration in contract law.
I believe in this case that "continued employment" is considered to be the benefit derived by the employee. Meaning "sign this or we will terminate you" is basically an ok thing to say, at least in some states.
Sheesh, what a perverse view of operation of companies. Non competes are silly beyond measure. I suppose the charitable view is that the legislators imagine that the employers have some magic beans which no one else could have beyond theft of the original beans.
In practice all this does is increase leverage of employers over employees while stifling growth by discouraging cross insemination of ideas between corporations.
The only winner is the employer who would fail to keep his employees through offering a good workplace.
Serfs were legally bound to the land on which they worked but could not own. Aren't non competes nothing but just a step towards serfdom?
Maybe. Maybe not. Here is a mental exercise for you.
Suppose that you meet a cofounder with a fantastic idea, that requires a modest amount of research to work the kinks out of, and you bring almost zero value to the equation other than having the vision to know that their idea is great - and of course, your willingness to work 100 hours per week until you're both rich off of it. They bring almost all of the value to the equation and have a great resume and background and degrees in that field. You're a code monkey or something. maybe you're a good one, but you certainly don't do the work of fifty or a hundred engineers. maybe 3-5. sometimes. you're nothing special.
so you enter into a contract with your partner under some terms, doesn't really matter what. you're cofounders.
Now here is the question: what is the outcome for you if as you begin to prove the technology together your cofounder gets a fantastic, amazing offer from a huge mutibillion dollar company, for millions of dollars, to leave you, join them, and compete with you. They don't want you, you don't add any value. Your company doesn't have any assets or IP. They just want your cofounder to go leave you and compete directly with the company you poured a lot of time into together and co-own.
if your cofounder does that, then this is awful for you. you've just wasted whatever time you spent working together as you don't bring all that much to the equation. your company becomes non-viable.
So how do you avoid this? Well you can trust each other: you can straight-up say at the start of the partnership, hey (cofounder's name), I know you bring a lot more value to this venture than I do and I am honored that you are letting me help you bring this to market. Before we enter our partnership, will you PROMISE me that you are not just going to leave and start directly competing with us?
Your cofounder says, sure, okay, I promise.
If they're a person of their word, this effectively solves the problem you had been having.
The thing is, this is a non-compete agreement. That's literally what it is. The legalities don't matter.
Do you guys think this agreement is "wrong"? After all your friend is severely constrained and must refuse offers of millions of dollars to leave your joint company and compete with you, if they keep their word....
I am not asking about whether courts should enforce these contracts. I'm asking whether the agreement itself is something that is wrong to enter. Is it wrong to ask for and receive that promise?
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EDIT: Despite my very clear signposting, a lot of people are misinterpreting this. I was asking what you all thought about the morality of such an "extreme" example.
I did not include any value judgment.
Any such IP would have been assigned to the company you are forming; if the large corporation wants to use it, they need to aquire the IP or the company itself, in which you are part owner.
I'm very sorry but this is simply not true. It's only IP if it's subject to copyright or patent protection AND in the latter case if your company is spending money on a patent strategy.
There's no IP from simply seeing if something works, if that is not subject to patent protection and you are not pursuing a patent strategy, and you don't bring any of it over with you to another company.
The know-how you acquire from having done it before (and which would make your cofounder likely to be hired away to compete with you) is also not "IP".
Quite simply I am asking you to assume the time you put into the joint project is not subject to patent protection and you are not pursuing a patent strategy, and to assume that there is no IP at the company that the cofounder would take with them.
Under this assumption (which is realistic) I asked you to make a judgment about the morality of the promise you solicit and receive from your cofounder not to go off and compete with you.
If the value comes not from the idea itself, but from the experience of having done it, your experience is just as valuable as your cofounder's. You have both done it once at this point, and if they leave, you/the startup retain ownership of all the work so far, which is a significant advantage.
I get what you're trying to sketch out, but it's a very very narrow "just so" scenario.
I didn't think about that. I don't know much about it and have never dealt with trade secrets. Isn't it close to a non-compete? How can a company know an employee isn't using their trade secrets at a competitor?
Trade secrets are managed state by state under the umbrella of the Uniform Trade Secrets Act. I don't think the legal question is how can they know but rather how much time is the perp going to face if the perp gets caught. Levandowski could be in line for serious prison time for theft of trade secrets from Google. Kalanick too.
Hi, CalChris, thanks for your response. You sound like you know what you're talking about.
I wonder, could something very small be subject to trade secret protection? I'd like your take on the hypothetical written below, simply because it is so small.
I really hate using the example below but I think it's well-defined and wouldn't really be subject to any trade secret protection and I'd like your take. (I reread my example and imagined it from the perspective of a woman and I think I could have written the same thing so I think it's not a gender-biased example but I will attempt to redact it if anyone complains.)
So for the hypothetical: women and men use dating apps but when I tried it some time ago I was floored that the people I met with actually had met tons and tons and tons of people. (As opposed to entering a relationship after meeting a few people.) I thought, far more than the number of dates the people I interacted with in day-to-day life go on.
My personal conclusion was that there is a "dead sea" effect on dating sites where people who are actively looking and really looking for a relationship end up leaving (because they enter a relationship), whereas the people who have been on 45+ dates in the past 180 days via the app are (this is a judgment) are kind of wasting each other's time from my perspective, maybe don't really have any intention to enter a relationship: they're not "really" in the market. So they will report things like "I've met dozens of women/men" (if they are being honest) " but I haven't really found the right one." Whereas in the old days grandparents met based on just having anything in common and living on the same street. their standards weren't so high and they wouldn't date 50-70 people before finding someone.
So now let's suppose that I figured out that the way to quickly get people in relationships is if I only show new users to new users, and the "time-wasters" to each other. Then I can make my app the best way to get people into relationships very quickly (after meeting just 1-5 people), whereas ordinarily to get to those 1-5 people you have to work through 45 people who are clogging the site with 0.0% chance of entering a relationship. (Because of the dead-sea effect we posit.)
So meanwhile the time-wasters of both genders only see each other and go on hundreds of dates with other people who have no intention of being satisfied with them. I wouldn't let the time-wasters waste any of the "genuine relationship-seekers" time by being shown each other.
Okay, so let's suppose for the sake of argument that this is the magic holy grail and that this tiny little insight makes all the difference. Let's just posit it.
So I apply it in secret and this one neat trick makes it the best dating app on the planet. Okay, so my question is could something really, really tiny like this which is described in a few words and is a single metric only, be something that could be covered under "trade secret", assuming it falls short of patent protection?
My hunch would be no, because even if it's valuable, any other company could come up with it. What do you think? Please assume that my example is really true (it could be false.) I'm not that attached to this example and have no intention to test it or enter that market, so it's one I can gladly sacrifice for the sake of argument. Let's not argue about the merits of the example but simply assume it is true - that it's the entirety of our advantage and as soon as other sites figure it out, we are no longer competitive.
Would trade secret apply to something extremely tiny like this? Almost a casual observation? Thank you!
Noncompetes that are tied to equity agremeents, rather than to employment contracts, are different, and often enforceable even in California (subject to various caveats, consult your lawyer, etc. etc.).
The paradigmatic case that California allows is: You own a restaurant that builds up a good reputation. You agree to sell it, with a condition in the sales terms that you won't open a competing restaurant within X miles for Y years. In large part what the buyer is buying here is your existing reputation and customer base, so you agree to a noncompete to facilitate selling these intangible items, which are more valuable if the buyer doesn't have to worry that you're going to sell the restaurant but then turn around and open a near-identical one to try to keep the customer base.
Can you add a value judgment for what you've stated? I did not include one in my comment, and you answered in legal terms without including a value judgment yourself. For example do you agree with the morality of your restaurant example?
Seems perfectly moral to me. It's conditions attached to the sale of a business and I would assume such clauses are pretty standard. If I sell a consulting business to you, you'd be pretty crazy not to have some anti-solicitation clause in the sale agreement.
If I did open up a competing restaurant next door as soon as the ink was dry on the sale agreement, I think it would be on you and your lawyer not to have covered that eventuality. (Though it would also be kind of sleazy of me IMO.)
That example is way off at one extreme end of the spectrum though. In reality, though, non-competes are far more often used to prevent people from jumping ship making LOB CRUD apps to making other LOB CRUD apps across the street for a $5K raise, or even leaving one sandwich shop to go work for another for a $1 hourly raise.
For every one possible situation in which non-competes might be good for employees, there are hundreds of situations in which they are outright bad.
Yes, I picked an example that is way off at one extreme end of the spectrum, but I did not offer my value judgment for that extreme example. What is your value judgment for that extreme example?
It sounds more like a case for contractual/IP law than for an employment non-compete. In other words, even in places where non-competes are illegal (like California), this issue can still be mitigated, so using them as an example to justify non-competes seems misguided.
Cofounders are equal partners. Employers/employees, not so much. Employees rarely have significant negotiating power as peers do. It's a mistake to assume what's true in one context is true in all others.
> An indentured servant or indentured labor is an employee (indenturee) within a system of unfree labor who is bound by a contract (indenture) to work for a particular employer for a fixed period.
It will help some employers & hurt others, but Idaho has been trying to boost their small tech scene. To do that they need out of state transplants. This law makes it less likely for that to happen.
To say nothing of the opportunity costs of the lowered economic output.
Peripheral, but I found it funny that a salesperson would get "Trust No One" tattooed on themselves in a place where clients could read it while she talks with them.
The employee can take another job whenever they want to? The alternative is a contract that says I can't fire you absent these specified reasons for X period of time and you can't leave absent these specified reasons no matter how much you hate it.
Given the inherent imbalance of power, another alternative is to remedy that imbalance by giving the favour of flexibility to the worker rather than the employer.
Well, it's a small thing but being able to leave on a moment's notice and not having it considered a breach of contract is helpful.
I was a bit surprised to find that instead of being a matter of courtesy, I'm contractually obligated to give 6 weeks' notice before leaving. I don't mind, really, but it's still kind of ridiculous.
Whether it's ridiculous or not is a matter of perspective. In Europe the minimum is 1-3 months, though there's often a trial period where the obligated notice is 1 week or less.
In practice though the employee/employer are free to upon termination sign an agreement reducing the dismissal period to whatever they feel is appropriate. Few employers wants to keep an employee that's decided to quit longer than strictly necessary.
They can sue you if you're in breach of a contract. However, unless it were some special circumstance, I expect they'd make do with just withholding any payments.
Employers have all the financial leverage and employees have none. Even people with highly-sought-after skills and experience are more easily replaced than some of those people can find a new job with comparable compensation.
So the two sides arrive at the "correct" amount of pay. How is that a problem? If someone wants to offer an employee more money, shorter commute, better perks, personal unicorn to fetch coffee from Starbucks, employee tells the employer "bye" and moves.
If an employer finds someone who can do employees job better or cheaper, employer tells that employee "Bye!"
Will the job market become commoditized? Sure. And it is absolutely great. Commoditization increases access to products of the said market.
[Edit: It is highly amusing to see people's reaction in this thread. It is akin to a toddler stomping his foot saying "Mommy, I don't want to!"]
This attitude is literally why Trump was elected president. Multinationals can just pay people in other countries much less for similar output. They have the leverage and former employees have none.
In theory, yes, the parties arrive at the "correct" amount of pay, and the transaction goes forward.
In practice, however, the typical employee only has one source of income (the job from their employer), while the employer has many employees. This makes the employee less able to survive loss of the job than the employer to survive loss of the employee. That's what leads to the imbalance of power between employee and employer.
As an individual working for a corporation, you have to keep in mind that you're depending on a sociopathic entity for your survival. Said sociopathic entity is legally mandated to act in the best interests of shareholders and investors, and to disregard your interests entirely unless they happen to align. This makes them as dangerous as a wild animal, but, fortunately, more predictable.
"What are the common wages of labour, depends everywhere upon the contract usually made between [workmen and masters], whose interests are by no means the same. The workmen desire to get as much, the masters to give as little as possible. The former are disposed to combine in order to raise, the latter in order to lower the wages of labour.
"It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily; and the law, besides, authorizes, or at least does not prohibit their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer. A landlord, a farmer, a master manufacturer, a merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long run the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate."
-- Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations, Book 1, Chapter 8.
There's seems to be some kind of American myth that "at will"-employment is for the benefit of the employee, or in the very least of equal benefit to both parties.
That may be true for educated middle to upper class professionals, without children or other dependants, but I have a hard time seeing how it benefits the average worker.
The issue is that each side has vastly different costs to the employee leaving.
Imagine we have a 100 person company. If an employer loses an employee, they are down 1/100 of their production until they can find someone to replace them. If an employee loses their job, the lose 100% of their production.
Unless the company is very small or the employee is insanely important, the cost is just not equal for each side.
I live in Idaho, so I can speak to this case specifically.
Idaho is a very rural state. Most of the population is in Boise, but every district in the state has a representative. This means that the wills of the city goers can't overrule the wills of the larger state as a whole, even thought it has the majority of the population.
Now, something to know about rural America is that it tends tomostly care about two things -- religion and the right to bear arms (this is a generalization, of course). As a result, the elected officials typically campaign on those points, and everything else is glassed over. Thusly, many of the elected officials serve special interest groups under the guise of a bible and a gun, and the rest doesn't really matter. It's not lack of intelligence, but lack or priorities other than these.
And that's how Idaho residents put up with these types of laws being put in place.
> religion and the right to bear arms (this is a generalization, of course).
Minor nit (sorry!) but rural folks mainly want limited government – a lot of their other arguments stem from that. They tend to not like power or authority and want to be left alone. (Perhaps to commit their own power abuses!)
Yes, they also want that. I'm speaking mostly about Idaho, where the religious influence is very strong in the southern half (Mormonism) and the neo-nazi influences in the northern half (Ruby Ridge).
Most will say limited gov and then in the same breath talk about how Christianity should be enforced as the nation's official religion, and how 2A laws should be expanded upon, both requiring bigger gov.
> What gun laws do you think Idahoans, of all people, want to see expanded?
Any law pertaining to firearms, because most believe the "liberals" are coming for their guns, so the further right the laws are, the more ground there is to fight.
For example, Idaho recently passed a "Constitutional Carry" law which allows anyone who legally owns a firearm to conceal it, without any training or permits. Previously, a background check and conversation with your local sherif was required to obtain a Concealed Weapon License. This barrier was low, and I'd never heard of anyone being denied, but apparently it was too invasive. I exercised my right to this prior (licensed) and after the change, and feel it wasn't a logical change.
They always say they want limited government, but they also say they want government to control who you can marry, who you can have sex with, what drugs you can take, and what women can do with their own bodies. And they say these things completely oblivious to the hypocrisy involved.
I live in the south, in the heart of "limited government" country, and I voted Republican until the last election (but I was always more of a libertarian).
There are libertarians in rural areas who really want limited government--they exist.
But they are vastly outnumbered by cultural conservatives, who want to use the government to shape the country into a version of what they think existed in the 1950s.
Having lived the first 35 years of my life almost entirely in conservative states: "limited government" means "government won't bother you as long as you act like a good conservative, but once you stop acting like a good conservative all bets are off".
We're seeing this openly practiced in places like Missouri and North Carolina, where the state legislatures advocate for limited government right until the moment a city in the state passes something whose social implications they disagree with. Then, as if by magic, a new state law appears to override the city policy or strip away the city's power to have such a policy.
Article title is misleading. This article is solely about noncompete clauses in employee contracts, while title makes it seem that Idaho employees are subject to serfdom.
I fall on the side of "noncompete clauses are stupid." Provide a better job or GTFO.
No. They actually don't. There are a number of limitations that companies may put in employment agreements including non-solicitation, NDAs, etc. that most people think are reasonable. The issue with non-competes is that many, including myself, think they're a bridge too far absent appropriate agreed-to compensation in most cases.
The burden of interpeting what defines competition usually falls on the courts. Most cases are favorable to a former employee when their livelihood is at stake.
That may (or may not) be true. But in my experience, at least some percentage of people bound by non-competes elect to just be on the beach rather than going the legal route. Some companies have a reputation for consistently litigating these.
In addition, even if the employee/ex-employee is willing to risk it, lots of potential new employers aren't. I worked for a small firm for a number of years and we wouldn't even entertain having discussions with someone if they were bound by any remotely relevant non-compete.
Non competes would be fine as long as the employer needs to provide compensation for the duration of it after you've left. If an employer leaving will really harm your business then you should be completely fine with paying to avoid it.
Many companies, particularly in areas like finance, or in C levels of management, will do this, paying employees for anywhere from a month to a year to not work. I’m not sure how much they can be enforced during that period, but as far as I’m aware the amounts of money are usually large enough for there to not be much of a problem enforcing them.
Former U.K. worker and lawyer: Gardening leave for sure happens, but basic non-competes (or "restrictive covenants" as they get called over there) without any kind of remuneration are fairly common in U.K. employment contracts for skilled workers too.
Successful enforcement is almost always a question for a court to decide, and many times an employer simply won't bother trying, but provided the employer can demonstrate a business interest to protect, the restriction isn't too widely defined and that the time scale is not "unreasonable" they stand a good chance of succeeding. I'm by no means endorsing this - it simply is what it always has been in the UK for a long time now.
But in the UK you cant be restricted from plying your trade which it only some highly paid senior individuals and you MUST be paid for it this is from the GC of an organisation specializing in hr/ir issues
Completely agree. I once worked for a large company that was purchased by another large company. The new large company wanted everyone to sign non-competes. I responded that I would only sign if they added that I would be paid throughout the non-compete timeframe. Oddly enough, I never heard anything else about it.
On the other hand, I was once in the same position. (The acquiring company was actually one of the most vocal backers of non-competes in their state over the years.) It was made clear that we either signed or we'd be immediately terminated.
I did sign. It was actually written narrowly enough that I didn't expect it would be a problem. And it wasn't when I left fairly shortly thereafter.
It absolutely DOES happen for C-level execs - I've been at a company where it happened and the (IMO extreme) payout was revealed in the S-1 filing when the company IPOed. It's yet another example where the rules at the top are created specifically to benefit them at the expense of everyone else.
>While its economy is known for agriculture — potatoes are among the state’s biggest exports — Idaho has a long history as a technology hub.
Nitpick, but: Idaho's largest component of the economy, as well as its largest exports, is technology and not agriculture. It is more of a tech state than an agricultural one.
(Sorry to all Idahoans who don't want this publicized!)
Maybe not for much longer at this rate, though. They seem to be doing everything possible to kill their tech industry rather than grow it. California indisputably has the best tech industry in the country and it also has the most stringent regulations against non-competes; it really makes you wonder what the legislators are even thinking if cultivating their tech industry is something they actually killed about.
Also, Idaho is a Republican state, so you naively expect they'd be all rah-rah free market and competition, but this appears to just be pro-big-business and actually quite anti-competitive.
I personally do not think this will have much of an effect on the "startup scene" because the vast majority of the people working at companies that would possibly enforce non-competes such as Micron or HP do not come to work at "startups", because of performance on skills-tests or cultural fit.
I've met a lot of the leadership for various startups in the Treasure Valley, and suing someone over changing employers would be the antithesis of the values they hold, there is one exception I could think of - BlackBox VR (very early stage) somebody leaving them for a competitor could be pretty bad!
I have met startups brag about losing employees to Amazon and Google though.
I don't think that the startup tech companies and non-startup tech companies are that different of a world. Something that negatively influences one in a given area will negatively influence the other. And people do move between them quite frequently (this has been my experience in DC and NYC at least, I can't speak to Boise).
What it's economy is like and what it's popularly imagined to be are two different things. Your nitpick actually undermines the very awareness you're trying to create because it misses the semantic mark.
What it's economy is like and what it's popularly imagined to be are two different things. Your nitpick actually undermines the very awareness you're trying to create because it misses the semantic mark.
So for new tech people getting started in their careers, make sure you save up 4-6 months of income so you don't have to put up with this garbage. They say money is power, but before that, it's freedom.
Don't allow yourself to be pushed around. If you aren't strong enough mentally yet to do it for yourself, do it for the other people in the field who aren't strong enough.
If they offer to pay you to train your replacement, tell them to pound sand and walk out. Be prepared financially.
If they try to force you to sign a non-compete, be willing to walk away until they make it fair and reasonable.
If they try to get you to sign away all your IP, tell them no.
Companies don't expect you to read that contract you are signing, and most of them just pull a boilerplate contract off the internet. Almost all of them are grossly one sided to the company. This includes taking ownership of anything you've developed in the past on your own.
All of this is easy if you have 4-6 months of income saved up. You are in high demand; companies will wither on the vine without good, efficient systems running them. Now, but even more so in the future.
I guarantee the majority of companies don't even know what's in that contract. They just pulled it off the internet because someone said, "Oh crap, we need an employee agreement. Google one." or "Find someone else's contract agreement."
If they go through all the trouble of recruiting you, interviewing you and deciding they want you, they'll be willing to consider revising it, especially since they probably didn't give it much thought in the first place.
Just raise your concerns in an intelligible way and don't be an asshole about it. I just did that for a contract. I said, "I can't give you all my inventions, I have a ton of them." They didn't even realize that was in the contract and they revised it. Poof. I got a fair agreement.
This has not been my experience at all. At every place I've ever worked, when I pointed out things in the employment agreements that I objected to, I was given a very stern and unambiguous "Sign it unmodified or GTFO." I've pretty much stopped asking. There's always a line out the door of people who are in equal need of the job and will sign whatever is put in front of them.
All the ones I've ever signed had an exception list for previous IP. You can sign it as is, just make sure your exceptions include all your previous work. You try something like, "Excluding any work or IP made or started before employment with xyz." "Excluding any work not explicitly requested by company xyz, etc." That way you can sign it as is but use the exceptions section.
You have to ask yourself, is working for that company worth giving them explicit rights for all your prior work you've done for yourself? That's exactly what they are asking for in most cases. Let's say you make it big with something you wrote before you even started working there and they find out. They can take it right from under you if you sign that contract without exceptions. Just know what you are getting into and what they are really asking you to commit to.
I actually left a job because I wanted to start a new project and I had signed a similar document without an exception. I didn't want them to have any claim with the IP. Also know, any investors will probably shy away from you if you've signed away your IP rights like that.
>I guarantee the majority of companies don't even know what's in that contract. They just pulled it off the internet
I worked for one of those companies once. He apparently didn't read his bank statements either, hence I didn't get paid for a significant chunk of the work I did.
Nobody before or since has acted surprised about the contents of their own contract. I'd view it as a major red flag.
Companies use these highly one-sided contracts with IP provisions and such because they can and because it's not any more difficult to include it in their boilerplate contract than to not include it, not because it often makes a material difference for them.
Except for the non-compete clauses. Those are materially important and likely to affect a large proportion of total employment contracts (whereas IP clauses are rarely relevant).
Even if you save up the money to not be desperate in these situations they still have a very high cost. Say you’re 30 and invest in a big index mutual fund. Having to use these funds means shaving 8x as many months off your retirement.
If you put money for example into one of Vanguard's "Retirement 20xx" funds you can make some pretty good returns that you can use to retire earlier. If you are in your 30s by the time you retire the money would have increased about eightfold as the grand parent said. Since you will have to pay taxes on those gains if it's not a 401k you will likely only end up with like 4-6x of what you have right now. So one month off due to these shenanigans could be 4-6 months of earlier retirement.
That is all true but it still doesn't negate the fact that you should have a rainy day account and having said account has a high cost because:
1. Those 401K's and IRA's have a yearly cap, so anything above that cap doesn't apply.
2. Saving your "rainy day" account is a one time thing. Once you reach 4-6 months of income, you are done.
3. Like we agree, you can put it in a non-tax sheltered fund.
Also, not sure if you are going to get 8x return in 30 years. Maybe 50 years ago. When I was in college you could expect to double your money ever 7 years. I don't believe that's still the case.
I am not arguing against having a rainy day account. You should absolutely have one. I am arguing against tapping into it to take a few months off till Idaho's non-compete period expires.
Over the last few years I made ~9% on my Vanguard investments. Vanguard's Retirement 2045 fund made 11% in the last 5 years and 5% in the last 10. That's all still much better than having it wast away in a money market account. You still can get the money out within days.
Oh, most non-compete agreements I've seen are for at least a year. A rainy day fund isn't for waiting that out. A rainy day fund is so you aren't desperate enough to have to take a job that requires you to sign a non-compete like that in the first place.
Or move to Texas where laws make non-compete agreements are really hard to enforce, as in the employer has to prove harm not associated with loss of labor. Cost of living is about 3-10x cheaper in Texas.
Then why are there more Californians moving to Texas than vice versa?
You really need to step out of your tech bubble. Remember how Donald Trump won the US election? If you were in the Bay area, I bet you would've never fathomed that since it's a bubble.
TX doesn't have state income tax, but CA does. TX has close to the cheapest fuel prices in the country while the bay area has the most expensive fuel prices in the country. Food costs less in TX and there is no sales tax on retail food purchases in TX.
Yes, you get paid less in TX. For an average software developer you tend to get paid about 40-60% less. Since the cost of living is probably 3x more in CA getting paid a little less in TX still puts you at a huge financial advantage.
I am not guessing at this. I am looking at the numbers and performing very simple arithmetic.
Meals are taxed in TX as they are in CA. Groceries aren't taxed in TX as they aren't in CA.
Gas is more in CA (2.89) than in TX (2.03). Our property tax rate is 0.81%. Yours is 1.90%.
The #1 employer in TX is Walmart. In CA it's UC. Not that that really matters. [1]
You haven't shown that the COL is 3-10 times higher in CA than in TX. A reliable cite would help. More, yes. 3-10 time more? No, that's not even remotely true.
Thank you, sir. That gives rankings. I'm still waiting for something that shows that CA has a 3-10 x COL than does TX. Your per capita state spending is $4,568 vs CA's $6,774. So it isn't there.
If you move from San Francisco to Austin TX, you can take a 45% pay cut and live the same, I don't think this accounts for income tax which comes out to probably brings it to a 50% pay cut.
I still don't understand the almost violent resistance to noncompetes. If they are "you can't work otherwise" then sure... it if it's literally that you can't go work for a direct competitor or take their clients to start your own I don't see the issue. That's more a matter of ethics than anything else and seems perfectly reasonable for a limited period of time (6 months to a year).
What if you worked for some huge conglomerate like GE. What industry does GE not compete in? Or Microsoft? Walmart?
Amazon? Also, their duration is typically 2-4 years. So you can't work in any major industry that GE competes in for 4 years and you get zero compensation for it. How is that anywhere close fair or reasonable?
Non-competes also include no hiring. That further limits my potential employment. If me and my buddy quit because we're sick, or bored of a place, we can't hire either other or recommend hiring each other for 2-4 years.
Guess what? If you have people who can't find employment and a good chunk of their opportunity is blocked because of non-competes, guess who pays for it?
Also, here's the crux of the hypocrisy. Companies are all about free market, but only when it benefits them. In a free market, I should be free to work anywhere for anyone. The only restriction would be not to divulge IP or trade secrets. I'm perfectly fine with that, but chances are, that's not what you are signing.
When I was younger, I used to think that non-compete meant that the company would continue to pay you the same salary as before for the duration of the non-compete. It just sounded like common sense.
I was young and naive. I am not that young anymore but I still think this needs to be a nationwide law. If you want me to not work (in an industry) for a particular length of time, you ought to pay me to not work about as much as what I would have made by working. Sure, put a ceiling at 50x minimum wage (so currently $725k a year https://www.google.com/search?q=7.25*2000*50 ) or something but this is just common sense that if you want to prevent me from working, you should pay me for the duration that I am not working.
I agree. I would say first make it non enforceable unless the employee is a certain status with certain parameters (like ownership) and then it's some multiple of salary after X years at the company. So you couldn't extend it to someone who's been there 6 months.
I really suspect you don't understand how broad tech-noncompetes are.
Given the court and arbitrator's lack of expertise, we see companies arguing that any software work at all is competition. Especially for emrging high-demand fields like machine learning.
I really suspect you don't understand how broad tech-noncompetes are.
Yeah, that's the issue basically. These things (and a lot of the golden handcuffs companies, especially inexperienced startups, like to slap on new employees - as if they didn't know any better) go way farther than anything remotely reasonable.
The end result being to discourage genuine trust and collaboration, rather than to foster it.
Is this happening a lot in the tech world? I don't mean an anecdote here and there. I did some quick google searches and it seems like non-competes are usually enforced against people in sales/marketing of some sort, taking their client list with them. That seems like a completely reasonable enforcement. The instances that make headlines in the tech world are the ones where Uber may have intentionally stolen Google tech, or at least the employee intentionally brought Google tech with them to Uber. Again, completely reasonable.
I didn't move to California and it's never happened to me or anyone I know. I did Google for stories on it and I couldn't find any stats. Do you have any?
But there is also a larger question of why we allow them at all. They seem unconscionable in any industry. They're roughly akin to suggesting that if you train someone you own rights to their training.
That's really not helpful. How many is "many?" And how many of those "many" would a reasonable person think is justified? The Uber case I mentioned previously is something I think a reasonable person would find justified. Is MSFT a bad actor or is this an industry-wide problem?
Again, how frequent/common is this in the industry? Articles with anecdotes are completely unhelpful. How many lawsuits have been filed in the past 5 years by former employers over non-competes? How many times have those employers won?
Again, "Consultant32452," you're mistaking our relationship. You're quite welcome for the free information, but don't mistake my largesse for interest in your conclusions or an obligation to help you.
You couldn't even say, "Please" or thank me for what I've offered you thus far. Is common decency not part of the cultural consensus where you're from?
You made a baseless claim. I took the time to find data to back up your baseless claim, specifically stated I couldn't find any stats, and asked if you had any. You then responded, twice, with anecdotes. Why would I thank you if you weren't helpful? All you've done is spread baseless rumors which hurts the community.
The reality of an easily verifiable situation is independent of your understanding or agreement with it. I'm unconcerned about convincing you because I've determined you're here in an anonymous capacity to defend no-competes.
I can't really figure out why you would. They only benefit very large organizations attempting to stifle competition and drive down skilled worker wages. Smaller companies can't really afford to consistently enforce them and lots of smaller companies use open moonlighting agreements and a lack of no-compete as a selling point.
But I also don't care. I am not obligated to convince you. Nor am I obligated to pay your little shufflepuck game that ultimately ends up with research behind a paywall you will refuse to follow.
This story: your tactic. It's not new. It's old. I've seen it done before, I've seen it executed better as well. There is nothing more telling than looking at an obvious example of abuse sourced off a reputable news site and saying, "But this is an anecdote and I wanted data."
I am sure you will post protestations about how unfair this is. And it is, somewhat. You bear the burden put upon all anonymous accounts before you. But to be honest, given your complete refusal to even google something and count the results makes me think you're actively defending this practice as opposed to genuinely curious.
I think in cases like those, we as a community ought to work on nullifying such decisions by refusing to cooperate at all with them. An artist would refuse to surrender their art over such ridiculous nonsense so why shouldn't programmers?
In the artist metaphor, I also assume that it took a non-trivial amount of time, say a year.
Compare the economic vibrancy of the Boston metro area (all the way out to Rte. 128) with the San Francisco Bay area (including Silicon Valley). Boston is a major educational hub, with some 250,000 students at a time at many universities and colleges including MIT and Harvard. And yet, the SF Bay area has left Boston in the dust when it comes to startup creation. There's nothing in Boston comparable to Apple, Google, or Facebook. And Boston was once a major hub of the computer industry, with Digital Equipment, Data General, and several smaller manufacturers -- that's all history now.
This is pretty strong empirical evidence that although enforceable noncompetes may be better for existing companies, they are a drag on the regional economy.
(Taking your current employer's clients is not exactly the same thing -- IANAL, but I would think that would be covered by the trade secret protections.)
This sort of thing is absolutely, 100% these incumbent companies lobbying their governments to give them a short term economic benefit at the high cost to both employees of that company, employees that work in that local economy, taxpayers in that economy, and the local economy as a whole, and even that company themselves medium term. Who would want to work in Idaho after reading this?
While I agree to most of these, I can't imagine hiring someone and not owning the resulting IP of anything that's developed. If you're referring to something outside the scope of work then sure if it's unrelated (think side project vs competitor), but if I'm paying you to work, I own what you built, both the end result and the IP.
I would fully accept that and that's completely reasonable, but that's not what most contracts I've read say. I just read one the other day that stated the company owned all IP and inventions created prior to hiring and any created during employment regardless of whether or not it was written for the company or on company time. I'm surprised they didn't include any future IP as well.
> I just read one the other day that stated the company owned all IP and inventions created prior to hiring ...
Haha. Okay that's seriously ridiculous. I'd have a field day berating any org that tried to push that on me.
> ... and any created during employment regardless of whether or not it was written for the company or on company time.
I'd disagree with you on the non-company time. Depending on the nature of the work whether it happens on the clock or not isn't clear cut. Hence the default of the company owning everything while you're doing work for them as an employee.
The best defense for this as an employee is to get a written exemption for anything non-company related that you're working on, or a generic exemption as a matter of company policy for things like off-clock FOSS contributions.
Just about every large scale FOSS project requires contributors to attest to IP ownership and assign copyright of contributions. Most also explicitly ask if your employer has granted you permission to offer you contribution. There are many stories of projects that don't do this trying to track down individuals years after the fact to facilitate relicensing.
Now in a more specific work for hire (i.e. contracting / consulting) situation, it does need to be tightened to reflect the actual work at hand. Otherwise you can't work on anything else
> I'm surprised they didn't include any future IP as well.
Be even funnier if they did and also required to actually create some too. Instead of a golden parachute it'd be lead anchor.
>I'd disagree with you on the non-company time. Depending on the nature of the work whether it happens on the clock or not isn't clear cut. Hence the default of the company owning everything while you're doing work for them as an employee.
That's the real issue. Spolsky wrote up something on that a few years ago. It went along the lines of if you were being paid to create and build apps for a company and after hours you developed your own killer app but kept it for yourself, that wouldn't be fair to the company employing you to make great apps for them.
That makes sense. I also think any company that expects 100% of your IP during employment should pay you more than what they would pay someone to work 40 hours a week.
It doesn't make sense for niche software companies trying to take your IP for completely unrelated ideas that they would never use in their product line, particularly when you are working on your stuff after hours.
> f you were being paid to create and build apps for a company and after hours you developed your own killer app but kept it for yourself, that wouldn't be fair to the company employing you to make great apps for them.
But this is where equity incentives serve to align these interests. If you develop a real killer app on your spare time, but integrated into your company's product would significantly increase the valuation, retention, reduce churn, etc - then with equity (whatever the structure may be) you have an incentive to bring that work to the table. If it's pure cash, then your benefit is the same regardless of if you keep this work (done on your own time, on your own equipment, and off-site) or share it.
The question, "Do I even want to work in Idaho?" Has got to be raising itself to employees and prospective employees already. Do you want to add another reason to make the easy answer no?
Meanwhile, you're amassing a stockpile of unhappy employees who don't want to be working for you but feel they have no choice. Do you really want to grow the number of employees you have who are trying to do the minimum?
Since we live in a supposedly free market where all these companies, both incumbent and startup, found successful business plans why is it now necessary to prop these companies up with new laws? Isn't it a part of the free market that if your business is not able to compete then it should die. A little cutthroat, but isn't that the dog eat dog world of business.
I am against placing the burden of proof on the employee. I am more so against cementing these restrictions in laws. It would be ok with me to allow someone to enter into whatever contract they want, but this feels like a continuation the big bank bailouts and the auto bailouts just in miniature.
Don't we need less laws and more comprehensible contracts to create a more level playing field. Can't we refactor the law instead of implementing these "duct-tape" fixes which only restrict the liberties of hard-working, law-abiding citizens?
Non-competes are a great example of why "pro-business" isn't the same as "pro-capitalism" or "pro-economy". Making all your best qualified people unemployable is a great way to ruin your country.
Non competes can't normally be enforced unless the company specifially compensates you for the non compete. Punishing someone by not allowing them to be able to make a living is unjust and unfair.
I live and run a small business in North Idaho. This law was something I have been a bit concerned about. I am not employed by anyone other than myself but I am often contracted by companies to do odd jobs (repair/upgrade machines, solve small issues, work on projects, etc). There have been quite a few NDAs involved in the past which has always concerned me since there is an overlap in what I do and what they do...but now the question is do I as a contractor need to watch for this? Could a non compete slipped into a contract (in cases of tech overlap) cause me issues in my own company? How liable am I as a contractor? Or is this only in cases of employment?
I suppose this is one of those laws I really need to look into. NDA is one thing...but being sued for doing what I already did as a company...or contracting to another company (competitor with differing tech for instance) would put me out of business.
There is a group of people who are putting a lot of work into driving the startup scene to my area (Coeur d'Alene/Spokane) but I feel this may hinder the companies...although...it might be beneficial for the people who are actually folding the cash at the end of the day.
Any insight from those more experienced would be helpful.
edit: Not that it should matter. But my bread and butter comes from remote open source/openhardware projects. The locals are the only ones who have ever required an NDA.
The ideal would be that you build up your business to the point that you can either simply decline to sign NDAs, because you have plenty of customers who don't ask you to, or at the very least can negotiate very specific NDA terms that won't be a problem for you. But again, to do that, you'll probably need some legal advice. The simplest thing is not to sign them at all.
Noncompetes are named accurately. They make an area much less competitive.
Idaho has only one meaningful tech company, and it's mentioned multiple times in the article. Analysts say its overpriced and due for a fall. It's a company that hasn't had much real innovation for a long time. Not surprising given that it is headquartered in a anti-innovation state that no highly qualified engineer in his right mind would move to due to the toxic legal environment for technologists.
I've also been seeing more contracts with indemnity clauses that make no sense given the size of the contract. I'm a single individual working on a contract under $10k, no I will not be financially responsible for anything negative that happens. Every time so far, I've redlined that section and said it does not apply, and it has been removed.
I'm not a big fans of unions as they currently exist, but this is a good example of why tech people should organize into some sort of collective structure so as to equalize their bargaining power. At the end of the day, you're just disposable labor that will be disadvantaged at any opportunity for the sake of profit.
For those of you who say just walk away. Alot of people lack confidence in themselves when they start out. Alot of people are really ignorant, even in the compsci space. A non-compete harms everyone as a restrain of trade. Parents really do not educate their kids on what to watch out for-often alot of parents just do not care about kids. Schools do not, either because of a lack of classroom time or large employers lobby the state against it.
Banning predatory provisions, especially non-competes, as California demonstrates, really helps develop the economy.
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[ 11.4 ms ] story [ 2368 ms ] threadSource: I've lived in Boise all my life.
1) Unfamiliarity with the law. People moving from states which protect the marketplace for employment from non-compete abuse (e.g. California) may not realize that such "agreements" even exist. I didn't, and was pretty surprised by them when I left CA after 7 years in SV.
2) Being required to sign a non-compete _after_ you've already begun the job, which is (AFAIK) legal many places, though I don't know about Idaho.
3) Asymmetric power in the "agreement", especially when larger employers (with legal departments) are involved. The scare quotes are there because the parties agreeing to the contract are not negotiating from comparable positions of strength, so I think the word "agreement" is a post-truth-type word.
IMO, a free market won't remain free without public policy support. I guess Idaho prefers a different sort of arrangement. That's their choice. Welcome to my personal blacklist, Idaho.
In practice all this does is increase leverage of employers over employees while stifling growth by discouraging cross insemination of ideas between corporations.
The only winner is the employer who would fail to keep his employees through offering a good workplace.
Serfs were legally bound to the land on which they worked but could not own. Aren't non competes nothing but just a step towards serfdom?
Maybe. Maybe not. Here is a mental exercise for you.
Suppose that you meet a cofounder with a fantastic idea, that requires a modest amount of research to work the kinks out of, and you bring almost zero value to the equation other than having the vision to know that their idea is great - and of course, your willingness to work 100 hours per week until you're both rich off of it. They bring almost all of the value to the equation and have a great resume and background and degrees in that field. You're a code monkey or something. maybe you're a good one, but you certainly don't do the work of fifty or a hundred engineers. maybe 3-5. sometimes. you're nothing special.
so you enter into a contract with your partner under some terms, doesn't really matter what. you're cofounders.
Now here is the question: what is the outcome for you if as you begin to prove the technology together your cofounder gets a fantastic, amazing offer from a huge mutibillion dollar company, for millions of dollars, to leave you, join them, and compete with you. They don't want you, you don't add any value. Your company doesn't have any assets or IP. They just want your cofounder to go leave you and compete directly with the company you poured a lot of time into together and co-own.
if your cofounder does that, then this is awful for you. you've just wasted whatever time you spent working together as you don't bring all that much to the equation. your company becomes non-viable.
So how do you avoid this? Well you can trust each other: you can straight-up say at the start of the partnership, hey (cofounder's name), I know you bring a lot more value to this venture than I do and I am honored that you are letting me help you bring this to market. Before we enter our partnership, will you PROMISE me that you are not just going to leave and start directly competing with us?
Your cofounder says, sure, okay, I promise.
If they're a person of their word, this effectively solves the problem you had been having.
The thing is, this is a non-compete agreement. That's literally what it is. The legalities don't matter.
Do you guys think this agreement is "wrong"? After all your friend is severely constrained and must refuse offers of millions of dollars to leave your joint company and compete with you, if they keep their word....
I am not asking about whether courts should enforce these contracts. I'm asking whether the agreement itself is something that is wrong to enter. Is it wrong to ask for and receive that promise?
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EDIT: Despite my very clear signposting, a lot of people are misinterpreting this. I was asking what you all thought about the morality of such an "extreme" example. I did not include any value judgment.
There's no need for a non-compete here.
The cofounder doesn't need to bring anything with them to the company that wants to acquire them. I was super-clear on this point.
This is IP.
There's no IP from simply seeing if something works, if that is not subject to patent protection and you are not pursuing a patent strategy, and you don't bring any of it over with you to another company.
The know-how you acquire from having done it before (and which would make your cofounder likely to be hired away to compete with you) is also not "IP".
Quite simply I am asking you to assume the time you put into the joint project is not subject to patent protection and you are not pursuing a patent strategy, and to assume that there is no IP at the company that the cofounder would take with them.
Under this assumption (which is realistic) I asked you to make a judgment about the morality of the promise you solicit and receive from your cofounder not to go off and compete with you.
My question is quite narrowly phrased.
I get what you're trying to sketch out, but it's a very very narrow "just so" scenario.
Trade secret.
http://www.nolo.com/legal-encyclopedia/california-trade-secr...
I wonder, could something very small be subject to trade secret protection? I'd like your take on the hypothetical written below, simply because it is so small.
I really hate using the example below but I think it's well-defined and wouldn't really be subject to any trade secret protection and I'd like your take. (I reread my example and imagined it from the perspective of a woman and I think I could have written the same thing so I think it's not a gender-biased example but I will attempt to redact it if anyone complains.)
So for the hypothetical: women and men use dating apps but when I tried it some time ago I was floored that the people I met with actually had met tons and tons and tons of people. (As opposed to entering a relationship after meeting a few people.) I thought, far more than the number of dates the people I interacted with in day-to-day life go on.
My personal conclusion was that there is a "dead sea" effect on dating sites where people who are actively looking and really looking for a relationship end up leaving (because they enter a relationship), whereas the people who have been on 45+ dates in the past 180 days via the app are (this is a judgment) are kind of wasting each other's time from my perspective, maybe don't really have any intention to enter a relationship: they're not "really" in the market. So they will report things like "I've met dozens of women/men" (if they are being honest) " but I haven't really found the right one." Whereas in the old days grandparents met based on just having anything in common and living on the same street. their standards weren't so high and they wouldn't date 50-70 people before finding someone.
So now let's suppose that I figured out that the way to quickly get people in relationships is if I only show new users to new users, and the "time-wasters" to each other. Then I can make my app the best way to get people into relationships very quickly (after meeting just 1-5 people), whereas ordinarily to get to those 1-5 people you have to work through 45 people who are clogging the site with 0.0% chance of entering a relationship. (Because of the dead-sea effect we posit.)
So meanwhile the time-wasters of both genders only see each other and go on hundreds of dates with other people who have no intention of being satisfied with them. I wouldn't let the time-wasters waste any of the "genuine relationship-seekers" time by being shown each other.
Okay, so let's suppose for the sake of argument that this is the magic holy grail and that this tiny little insight makes all the difference. Let's just posit it.
So I apply it in secret and this one neat trick makes it the best dating app on the planet. Okay, so my question is could something really, really tiny like this which is described in a few words and is a single metric only, be something that could be covered under "trade secret", assuming it falls short of patent protection?
My hunch would be no, because even if it's valuable, any other company could come up with it. What do you think? Please assume that my example is really true (it could be false.) I'm not that attached to this example and have no intention to test it or enter that market, so it's one I can gladly sacrifice for the sake of argument. Let's not argue about the merits of the example but simply assume it is true - that it's the entirety of our advantage and as soon as other sites figure it out, we are no longer competitive.
Would trade secret apply to something extremely tiny like this? Almost a casual observation? Thank you!
The paradigmatic case that California allows is: You own a restaurant that builds up a good reputation. You agree to sell it, with a condition in the sales terms that you won't open a competing restaurant within X miles for Y years. In large part what the buyer is buying here is your existing reputation and customer base, so you agree to a noncompete to facilitate selling these intangible items, which are more valuable if the buyer doesn't have to worry that you're going to sell the restaurant but then turn around and open a near-identical one to try to keep the customer base.
If I did open up a competing restaurant next door as soon as the ink was dry on the sale agreement, I think it would be on you and your lawyer not to have covered that eventuality. (Though it would also be kind of sleazy of me IMO.)
For every one possible situation in which non-competes might be good for employees, there are hundreds of situations in which they are outright bad.
If the other guy does not bring that much to the equation then it might be he was not that valuable after all.
Both guys lose if they need to duke out their differences in court, IMO.
> An indentured servant or indentured labor is an employee (indenturee) within a system of unfree labor who is bound by a contract (indenture) to work for a particular employer for a fixed period.
https://en.m.wikipedia.org/wiki/Indentured_servitude
Indentured servitude: you either obey the contract, or go to jail.
Non-compete: you either obey the contract, or go work in a different industry (in effect, become poorer, since you have to start over).
Even employers who are restricted from hiring will benefit in the form of lower wages and a more pliable workforce.
To say nothing of the opportunity costs of the lowered economic output.
your country seems to not want to ditch the slavery concept...
its astounding to watch a once great country eat itself alive like that.
I was a bit surprised to find that instead of being a matter of courtesy, I'm contractually obligated to give 6 weeks' notice before leaving. I don't mind, really, but it's still kind of ridiculous.
In practice though the employee/employer are free to upon termination sign an agreement reducing the dismissal period to whatever they feel is appropriate. Few employers wants to keep an employee that's decided to quit longer than strictly necessary.
Again, I don't really mind, but it was surprising.
If you just stopped going to work one day, and didn't tell anybody, there is nothing anybody could do about it.
If an employer finds someone who can do employees job better or cheaper, employer tells that employee "Bye!"
Will the job market become commoditized? Sure. And it is absolutely great. Commoditization increases access to products of the said market.
[Edit: It is highly amusing to see people's reaction in this thread. It is akin to a toddler stomping his foot saying "Mommy, I don't want to!"]
In practice, however, the typical employee only has one source of income (the job from their employer), while the employer has many employees. This makes the employee less able to survive loss of the job than the employer to survive loss of the employee. That's what leads to the imbalance of power between employee and employer.
As an individual working for a corporation, you have to keep in mind that you're depending on a sociopathic entity for your survival. Said sociopathic entity is legally mandated to act in the best interests of shareholders and investors, and to disregard your interests entirely unless they happen to align. This makes them as dangerous as a wild animal, but, fortunately, more predictable.
"It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily; and the law, besides, authorizes, or at least does not prohibit their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer. A landlord, a farmer, a master manufacturer, a merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long run the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate."
-- Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations, Book 1, Chapter 8.
https://en.m.wikisource.org/wiki/The_Wealth_of_Nations/Book_...
That may be true for educated middle to upper class professionals, without children or other dependants, but I have a hard time seeing how it benefits the average worker.
Imagine we have a 100 person company. If an employer loses an employee, they are down 1/100 of their production until they can find someone to replace them. If an employee loses their job, the lose 100% of their production.
Unless the company is very small or the employee is insanely important, the cost is just not equal for each side.
Idaho is a very rural state. Most of the population is in Boise, but every district in the state has a representative. This means that the wills of the city goers can't overrule the wills of the larger state as a whole, even thought it has the majority of the population.
Now, something to know about rural America is that it tends tomostly care about two things -- religion and the right to bear arms (this is a generalization, of course). As a result, the elected officials typically campaign on those points, and everything else is glassed over. Thusly, many of the elected officials serve special interest groups under the guise of a bible and a gun, and the rest doesn't really matter. It's not lack of intelligence, but lack or priorities other than these.
And that's how Idaho residents put up with these types of laws being put in place.
Minor nit (sorry!) but rural folks mainly want limited government – a lot of their other arguments stem from that. They tend to not like power or authority and want to be left alone. (Perhaps to commit their own power abuses!)
Most will say limited gov and then in the same breath talk about how Christianity should be enforced as the nation's official religion, and how 2A laws should be expanded upon, both requiring bigger gov.
Any law pertaining to firearms, because most believe the "liberals" are coming for their guns, so the further right the laws are, the more ground there is to fight.
For example, Idaho recently passed a "Constitutional Carry" law which allows anyone who legally owns a firearm to conceal it, without any training or permits. Previously, a background check and conversation with your local sherif was required to obtain a Concealed Weapon License. This barrier was low, and I'd never heard of anyone being denied, but apparently it was too invasive. I exercised my right to this prior (licensed) and after the change, and feel it wasn't a logical change.
Now there is no such law.
I sincerely don't understand how you can view the removal of a law as "bigger government."
There are libertarians in rural areas who really want limited government--they exist.
But they are vastly outnumbered by cultural conservatives, who want to use the government to shape the country into a version of what they think existed in the 1950s.
We're seeing this openly practiced in places like Missouri and North Carolina, where the state legislatures advocate for limited government right until the moment a city in the state passes something whose social implications they disagree with. Then, as if by magic, a new state law appears to override the city policy or strip away the city's power to have such a policy.
https://news.ycombinator.com/newsguidelines.html
I fall on the side of "noncompete clauses are stupid." Provide a better job or GTFO.
In addition, even if the employee/ex-employee is willing to risk it, lots of potential new employers aren't. I worked for a small firm for a number of years and we wouldn't even entertain having discussions with someone if they were bound by any remotely relevant non-compete.
Successful enforcement is almost always a question for a court to decide, and many times an employer simply won't bother trying, but provided the employer can demonstrate a business interest to protect, the restriction isn't too widely defined and that the time scale is not "unreasonable" they stand a good chance of succeeding. I'm by no means endorsing this - it simply is what it always has been in the UK for a long time now.
I did sign. It was actually written narrowly enough that I didn't expect it would be a problem. And it wasn't when I left fairly shortly thereafter.
Nitpick, but: Idaho's largest component of the economy, as well as its largest exports, is technology and not agriculture. It is more of a tech state than an agricultural one.
(Sorry to all Idahoans who don't want this publicized!)
Also, Idaho is a Republican state, so you naively expect they'd be all rah-rah free market and competition, but this appears to just be pro-big-business and actually quite anti-competitive.
I personally do not think this will have much of an effect on the "startup scene" because the vast majority of the people working at companies that would possibly enforce non-competes such as Micron or HP do not come to work at "startups", because of performance on skills-tests or cultural fit.
I've met a lot of the leadership for various startups in the Treasure Valley, and suing someone over changing employers would be the antithesis of the values they hold, there is one exception I could think of - BlackBox VR (very early stage) somebody leaving them for a competitor could be pretty bad!
I have met startups brag about losing employees to Amazon and Google though.
Don't allow yourself to be pushed around. If you aren't strong enough mentally yet to do it for yourself, do it for the other people in the field who aren't strong enough.
If they offer to pay you to train your replacement, tell them to pound sand and walk out. Be prepared financially.
If they try to force you to sign a non-compete, be willing to walk away until they make it fair and reasonable.
If they try to get you to sign away all your IP, tell them no.
Companies don't expect you to read that contract you are signing, and most of them just pull a boilerplate contract off the internet. Almost all of them are grossly one sided to the company. This includes taking ownership of anything you've developed in the past on your own.
All of this is easy if you have 4-6 months of income saved up. You are in high demand; companies will wither on the vine without good, efficient systems running them. Now, but even more so in the future.
maybe. it may just be people willing to sign one-sided agreements are in high demand.
If they go through all the trouble of recruiting you, interviewing you and deciding they want you, they'll be willing to consider revising it, especially since they probably didn't give it much thought in the first place.
Just raise your concerns in an intelligible way and don't be an asshole about it. I just did that for a contract. I said, "I can't give you all my inventions, I have a ton of them." They didn't even realize that was in the contract and they revised it. Poof. I got a fair agreement.
You have to ask yourself, is working for that company worth giving them explicit rights for all your prior work you've done for yourself? That's exactly what they are asking for in most cases. Let's say you make it big with something you wrote before you even started working there and they find out. They can take it right from under you if you sign that contract without exceptions. Just know what you are getting into and what they are really asking you to commit to.
I actually left a job because I wanted to start a new project and I had signed a similar document without an exception. I didn't want them to have any claim with the IP. Also know, any investors will probably shy away from you if you've signed away your IP rights like that.
I worked for one of those companies once. He apparently didn't read his bank statements either, hence I didn't get paid for a significant chunk of the work I did.
Nobody before or since has acted surprised about the contents of their own contract. I'd view it as a major red flag.
Except for the non-compete clauses. Those are materially important and likely to affect a large proportion of total employment contracts (whereas IP clauses are rarely relevant).
1. Those 401K's and IRA's have a yearly cap, so anything above that cap doesn't apply. 2. Saving your "rainy day" account is a one time thing. Once you reach 4-6 months of income, you are done. 3. Like we agree, you can put it in a non-tax sheltered fund.
Also, not sure if you are going to get 8x return in 30 years. Maybe 50 years ago. When I was in college you could expect to double your money ever 7 years. I don't believe that's still the case.
https://www.texasnoncompetelaw.com/articles/noncompete-agree...
Idaho is cheaper than Texas. And no, Texas is not 3-10x cheaper than even California. In addition, you get paid less in TX than in CA.
You really need to step out of your tech bubble. Remember how Donald Trump won the US election? If you were in the Bay area, I bet you would've never fathomed that since it's a bubble.
Source: live in Mountain View
TX doesn't have state income tax, but CA does. TX has close to the cheapest fuel prices in the country while the bay area has the most expensive fuel prices in the country. Food costs less in TX and there is no sales tax on retail food purchases in TX.
Yes, you get paid less in TX. For an average software developer you tend to get paid about 40-60% less. Since the cost of living is probably 3x more in CA getting paid a little less in TX still puts you at a huge financial advantage.
I am not guessing at this. I am looking at the numbers and performing very simple arithmetic.
Gas is more in CA (2.89) than in TX (2.03). Our property tax rate is 0.81%. Yours is 1.90%.
The #1 employer in TX is Walmart. In CA it's UC. Not that that really matters. [1]
You haven't shown that the COL is 3-10 times higher in CA than in TX. A reliable cite would help. More, yes. 3-10 time more? No, that's not even remotely true.
[1] http://www.marketwatch.com/story/these-are-the-largest-emplo...
* I already linked to a site that does city by city comparisons, but there are so many online.
Payscale sure isn't saying 3-10x.
http://www.payscale.com/cost-of-living-calculator/Texas-Aust...
If you move from San Francisco to Austin TX, you can take a 45% pay cut and live the same, I don't think this accounts for income tax which comes out to probably brings it to a 50% pay cut.
So I would say 2x
What if you worked for some huge conglomerate like GE. What industry does GE not compete in? Or Microsoft? Walmart? Amazon? Also, their duration is typically 2-4 years. So you can't work in any major industry that GE competes in for 4 years and you get zero compensation for it. How is that anywhere close fair or reasonable?
Non-competes also include no hiring. That further limits my potential employment. If me and my buddy quit because we're sick, or bored of a place, we can't hire either other or recommend hiring each other for 2-4 years.
Guess what? If you have people who can't find employment and a good chunk of their opportunity is blocked because of non-competes, guess who pays for it?
Also, here's the crux of the hypocrisy. Companies are all about free market, but only when it benefits them. In a free market, I should be free to work anywhere for anyone. The only restriction would be not to divulge IP or trade secrets. I'm perfectly fine with that, but chances are, that's not what you are signing.
I was young and naive. I am not that young anymore but I still think this needs to be a nationwide law. If you want me to not work (in an industry) for a particular length of time, you ought to pay me to not work about as much as what I would have made by working. Sure, put a ceiling at 50x minimum wage (so currently $725k a year https://www.google.com/search?q=7.25*2000*50 ) or something but this is just common sense that if you want to prevent me from working, you should pay me for the duration that I am not working.
Given the court and arbitrator's lack of expertise, we see companies arguing that any software work at all is competition. Especially for emrging high-demand fields like machine learning.
Yeah, that's the issue basically. These things (and a lot of the golden handcuffs companies, especially inexperienced startups, like to slap on new employees - as if they didn't know any better) go way farther than anything remotely reasonable.
The end result being to discourage genuine trust and collaboration, rather than to foster it.
But there is also a larger question of why we allow them at all. They seem unconscionable in any industry. They're roughly akin to suggesting that if you train someone you own rights to their training.
You will get no more of my time: http://gawker.com/378444/did-you-sign-googles-noncompete-goo...
You couldn't even say, "Please" or thank me for what I've offered you thus far. Is common decency not part of the cultural consensus where you're from?
I can't really figure out why you would. They only benefit very large organizations attempting to stifle competition and drive down skilled worker wages. Smaller companies can't really afford to consistently enforce them and lots of smaller companies use open moonlighting agreements and a lack of no-compete as a selling point.
But I also don't care. I am not obligated to convince you. Nor am I obligated to pay your little shufflepuck game that ultimately ends up with research behind a paywall you will refuse to follow.
This story: your tactic. It's not new. It's old. I've seen it done before, I've seen it executed better as well. There is nothing more telling than looking at an obvious example of abuse sourced off a reputable news site and saying, "But this is an anecdote and I wanted data."
I am sure you will post protestations about how unfair this is. And it is, somewhat. You bear the burden put upon all anonymous accounts before you. But to be honest, given your complete refusal to even google something and count the results makes me think you're actively defending this practice as opposed to genuinely curious.
In the artist metaphor, I also assume that it took a non-trivial amount of time, say a year.
It's not "violent". It's the exact opposite of that, in fact.
This is pretty strong empirical evidence that although enforceable noncompetes may be better for existing companies, they are a drag on the regional economy.
(Taking your current employer's clients is not exactly the same thing -- IANAL, but I would think that would be covered by the trade secret protections.)
Haha. Okay that's seriously ridiculous. I'd have a field day berating any org that tried to push that on me.
> ... and any created during employment regardless of whether or not it was written for the company or on company time.
I'd disagree with you on the non-company time. Depending on the nature of the work whether it happens on the clock or not isn't clear cut. Hence the default of the company owning everything while you're doing work for them as an employee.
The best defense for this as an employee is to get a written exemption for anything non-company related that you're working on, or a generic exemption as a matter of company policy for things like off-clock FOSS contributions.
Just about every large scale FOSS project requires contributors to attest to IP ownership and assign copyright of contributions. Most also explicitly ask if your employer has granted you permission to offer you contribution. There are many stories of projects that don't do this trying to track down individuals years after the fact to facilitate relicensing.
Now in a more specific work for hire (i.e. contracting / consulting) situation, it does need to be tightened to reflect the actual work at hand. Otherwise you can't work on anything else
> I'm surprised they didn't include any future IP as well.
Be even funnier if they did and also required to actually create some too. Instead of a golden parachute it'd be lead anchor.
That's the real issue. Spolsky wrote up something on that a few years ago. It went along the lines of if you were being paid to create and build apps for a company and after hours you developed your own killer app but kept it for yourself, that wouldn't be fair to the company employing you to make great apps for them.
That makes sense. I also think any company that expects 100% of your IP during employment should pay you more than what they would pay someone to work 40 hours a week.
It doesn't make sense for niche software companies trying to take your IP for completely unrelated ideas that they would never use in their product line, particularly when you are working on your stuff after hours.
> That makes sense.
No, it absolutely 10000% does not.
The question, "Do I even want to work in Idaho?" Has got to be raising itself to employees and prospective employees already. Do you want to add another reason to make the easy answer no?
Meanwhile, you're amassing a stockpile of unhappy employees who don't want to be working for you but feel they have no choice. Do you really want to grow the number of employees you have who are trying to do the minimum?
I am against placing the burden of proof on the employee. I am more so against cementing these restrictions in laws. It would be ok with me to allow someone to enter into whatever contract they want, but this feels like a continuation the big bank bailouts and the auto bailouts just in miniature.
Don't we need less laws and more comprehensible contracts to create a more level playing field. Can't we refactor the law instead of implementing these "duct-tape" fixes which only restrict the liberties of hard-working, law-abiding citizens?
I suppose this is one of those laws I really need to look into. NDA is one thing...but being sued for doing what I already did as a company...or contracting to another company (competitor with differing tech for instance) would put me out of business.
There is a group of people who are putting a lot of work into driving the startup scene to my area (Coeur d'Alene/Spokane) but I feel this may hinder the companies...although...it might be beneficial for the people who are actually folding the cash at the end of the day.
Any insight from those more experienced would be helpful.
edit: Not that it should matter. But my bread and butter comes from remote open source/openhardware projects. The locals are the only ones who have ever required an NDA.
The ideal would be that you build up your business to the point that you can either simply decline to sign NDAs, because you have plenty of customers who don't ask you to, or at the very least can negotiate very specific NDA terms that won't be a problem for you. But again, to do that, you'll probably need some legal advice. The simplest thing is not to sign them at all.
Idaho has only one meaningful tech company, and it's mentioned multiple times in the article. Analysts say its overpriced and due for a fall. It's a company that hasn't had much real innovation for a long time. Not surprising given that it is headquartered in a anti-innovation state that no highly qualified engineer in his right mind would move to due to the toxic legal environment for technologists.
Banning predatory provisions, especially non-competes, as California demonstrates, really helps develop the economy.