Here's some good news:
FTC Final Rule recommendation on #noncompetes! Will be voted on in the open commission meeting shortly. 🍿⚡️ pic.twitter.com/RapGJYUCM0
— Kenan Fikri (@kenanfikri) April 23, 2024
The vote was 3-2 in favor of banning noncompete agreements for new workers and voiding them for all existing workers (except C-suite executives). This will eliminate the ridiculous practice of fast food chains hiring sandwich makers and then prohibiting them from quitting and going to work for a different fast food chain—and giving their valuable, proprietary sandwich making expertise to the competition.
Corporate America has only itself to blame for this. Noncompetes used to be limited to high-end jobs like coders or lawyers. But then, as usual, some bright boys got the idea of expanding the idea to poor shlubs working minimum wage jobs. That was outrageous enough that it finally produced support for killing noncompetes completely.
In any case, it's a good thing. It promotes a more dynamic economy, and companies still have the ability to protect trade secrets. We've banned noncompetes in California for more than a century, and it's helped build the biggest, most innovative economy in the country. According to the Washington Post:
A Labor Department study published in June 2022 estimated that 18 percent of Americans are bound by noncompete agreements, while other research suggests it could be closer to 50 percent. They are used in a wide range of industries, including technology, hairstyling, medicine and even dance instruction, while imposing restrictions on both high- and low-wage earners.
The FTC estimates that banning noncompete agreements could create jobs for 30 million Americans and raise wages by nearly $300 billion per year.
All good free-market capitalists—as opposed to those who are merely shills for big corporations—should be happy about this. The United States will do nothing but benefit from it.¹
ÂąAssuming, of course, that it holds up against the inevitable Chamber of Commerce court challenge in the northern district of Texas.
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Now let's work on NDA's....
Yes indeed. There are patents to protect IP if you expose the idea that you are trying hide. Patents also need to have their conditions changed (shortening them and making them more specific). If Non-disclosure agreements are to be allowed, it should only be in the time when a patent is in the process of being approved. Otherwise, you have to ask - what do people have to hide?
Exactly! Didn't see your comment before I posted -- but, yes, that's what patents are for. By definition, my work flows out of my skill and while the work that I produce as a wage peon belong to the company, my skills still belong to me.
NDAs are used in situations well beyond patents and quite legitimately.
If I am doing a Joint Venture and sharing commercial information (as like my private investment risk modeling criteria, other commercially sensitive technical information that is not publicly disclosed) with the other party and its workers, I have a completely legitimate interest to have protection on third party disclosure of such information.
Reasonable case law on enforcement of such NDAs is required, from public policy, but there is nothing inherently wrong with the NDA as a legal contractual instrument (nor is it something that normally in my reading is particularly problematic in most commercial circumstances).
"private investment risk modeling criteria".
I am pretty sure that such things are patentable. But if it's some sort of an algorithm and it's not patentable, then you should be able to use it wherever you go.
They are not patentable.
And no you should not be able to use a specific model and tool developed, as purely plagarism. Of course since much work is recylcled and NDA terms that are defensible in most common law courts carve out knowledge and tools that are already in public knowledge or reasonably knowable, the real application is using unadjusted in a pure plagaristic manner a tool or non-public document or data-set - propriatary private information.
NDAs are not simply used with employees - in fact the major usage is with commercial counterparties.
Lounsbury-
I'm old so if this sounds ignorant please forgive me
What if your idea is based upon something that AI was used to provide the research? Is THAT research protected?
I may not be phrasing the question(s) right but in your case investment risk modelling you COULD use AI for your modeling. Is that AI covered?
This question is aimed at the concept of patents which is not relevant to my comment.
My comment was relative to the usage of NDAs to provide a legal framework in which Commercial Parties - of which notably for example an advisory company and a client exchange private confidential business data. The Client always has me sign NDA enjoining me from rendering public their private confidential business data, information.
This is the most common usage in my world - absolutely nothing at all to do with AI (the subject is not even relevant to the quetion, if the Client generated the data by AI based analysis ... or by Monkies typing, doesn't matter. It is NOT PATENT LAW).
Equally if I share our investment mechanism including private confidential details (which are not in any way issues of Patent but are my confidential specific practices) I need to be able to enjoin the Client from running and selling or leaking that to my competitor to use against me. Of course most of the time the NDA is really a piece of paper memorialising what is simply respect of the other parties - and given the expense of enforcement, one doesn't go chasing after silly little things.
The problem is when NDA's or any similar agreements are used to stop people from going to law enforcement or regulators.
They do not in law.
NDAs can not override in any Common Law context either Regulation nor Criminal law.
Any such attempt fails in court.
An actor using intimidation certainly occurs but such intimidation has zero need of actual NDA, one can brandish lawsuit - it has equal basis (posturing and threats)
And this is a tiny edge case as compared to what NDA is normally used for is not addressed by banning willy nilly NDA because to you Lefties what you see is the tail of the elephant pooping, to the extent there is a problem, it is a matter of publicising and reinforcing the public understanding an NDA is unforceable to keep violations secret.
"...high-end jobs like coders..."
I assume that you're being facetious here. How's coding any different from sandwich-making? I know how to develop software and I use my skill. Why should I be limited in choosing my employer?
If my work needs to be protected from the competition, we have the patent office for that.
I absolutely do not accept any limitations to my choices in employment. Period.
I don't have much to add except that this Decision is an unalloyed good...it is also nice to see a reasoned, intelligent conversation where I learn things, Be Good, Travller
POSTED THIS prior to seeing anything below Dude's comment, expecting this to be placed unde his.
Try working for a fast-food employer I'm fairly certain that you will notice some big differences in the experience & terms of that & your coding employment.
there are lots of highly developed skills that weren't typically subject to non-competes
for years software developers were allowed to be treated differently, because... reasons... but mainly they used it as a way to keep a lid on the salaries of uppity engineers
i got a nice little check from my employer because they had an illegal no-poaching agreement with a number of other large silicon valley firms
then the suits started going after basic service employees and that's when it got the attention of the ftc (well, at least the members of the ftc that weren't in the tank for the chamber of commerce)
It lies on the same continuum. Of course, there's a difference in the skill level, but that's all quantitative and not qualitative.
Even if there's a very significant difference, I still should be able to take my skill anywhere.
PS: I've worked a menial job and I fully understand the difference.
So now any crappy roadside diner can lure workers from McDonald's with bribes, and learn how to make french fries. Sleepy Joe is killing American business.
Sleepy Joe is killing Sloppy Joe makers.
Sorry, but Daily Dozing Donald has made "Sleepy Joe" obsolete.
Sounds like a really good decision. Too bad its likely to be reviewed by the courts in such a progressive state like Texas, and then likely to the Supreme Court of Gilead, where I am sure judges like Alito, Thomas and the 3 Christian Nationalist chosen by Il Duce will just love the ruling.
can't blame them for that
their lord and savior was all about screwing the little guy
(i mean trump of course)
It only took 150 years for the rest of the country to follow California’s lead!
“Medicine”?
So big hospital borgs like Emory in Atlanta will no longer be able to block physicians who want to be independent of the “non-profit” collective?
There is only one industry where I can think of noncompetes doing more good than harm: streaming.
Imagine group of streamers. They becone successful but one is clearly more notable. They strike out on their own. The training, equipment, experience and audience go with them and the organization that built them up is left holding the bag.
Huh? You could make the same argument about any sector. Imagine if Joe the Investment Banker becomes more successful than his peers! Imagine if Sally the manicurist becomes more successful than her peers! What's so special about streaming?
So?
This has been the law in California for decades, and businesses have managed to be profitable in California. In fact, some credit the California law for the dynamic success of Silicon Valley. It is really a scandal how many states enforce these non-compete agreements against vulnerable employees. It has surprised me that more states have not followed the lead of California in this respect.
Yes. It has been argued that the difference between greater Boston and Silicon Vallye is exactly this. People forget that the electronics highway in 1965 was Route 128 around Boston. In the last 60 years SV grew faster. Of course weather and space and other factors were big too, but I have seen non-compete clauses invoked
multiple times in my end of the software world here in Massachusetts. .
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