New York will not be joining California as a state that bans noncompete agreements in employment contracts:
Gov. Kathy Hochul (D) will veto a bill to ban employee non-competes in New York, after facing intense pressure from Wall Street, hospitals, and business groups that opposed the measure, according to sources familiar with the matter.
This sounds nuts to someone from California. We've banned noncompetes since 1872—and not just as a weird unintended consequence of some poorly worded legislation or something like that. The ban was passed expressly to overturn a court ruling that had allowed noncompetes as long as they incorporated "reasonable limits." The 1872 statute banned all noncompetes, reasonable or not. It was superseded by nearly identical wording in 1941, and then expanded further by a court ruling in 2008. California courts by then had long ruled that noncompetes were invalid if they prohibited employees from quitting to work for competitors, but the 2008 case involved a contract that allowed workers to join competitors but prohibited them from poaching clients. The California Supreme Court, ruling that state law was "unambiguous," voided the contract, thus ending even the smallest exceptions to noncompete bans.
Long story short, it's been the law in California for 151 years with no perceptible problem. Quite the contrary: California's big industries—tech, Hollywood, aerospace, farming—have thrived. They are among the most dynamic and profitable in the country.
So jump in, the water's fine. How many years of evidence do you need?
Ugh. My opinion of Hochul, never great, just dropped several notches and I'm now actively inclined to vote for someone else in the next Democratic gubernatorial primary. The businesses lobbying in favor of noncompetes are telling a bunch of self-serving lies to protect themselves from competition for labor and from new startups. The fact that Hochul actually listened to their BS shows she's not a good leader.
A nationwide ban on noncompetes would be a blessing to us all. Pity New York won't get that blessing when we could have.
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If it weren’t for noncompetes those job-switching Wall Street bankers might never get their 30 days of garden leave between jobs and all of them would drop dead from heart attacks.
Oh Kevin, the purpose of non-compete clauses is not to serve the public interest! They are there to serve the interests of capital by stopping workers exercising the "if you don't like it here go find a job somewhere else" option which in other circumstances employers are quick to recommend. The reasons this exception to the normal right-wing veneration of free markets is justified are so self-evident, nobody sees any need to explain them. Google it.
Kevin knows that. What he’s saying is that California has never had them, business has thrived there, and so the horror stories that businesses tell legislators will unfold if noncompetes are banned is just bullshit.
I'm against non-competes. I'm not against keeping employees from taking clients/ customers with them.
I dunno. In every field from hair styling to investment banking, clients and customers do in fact follow star performers from firm to firm. I'm not saying the law should provide absolutely zero protection for organizations in this area, but a very light touch is warranted (a heavy-handed approach basically equates to a back-door form of non-compete clause).
The organizations should protect themselves by retaining their talent. That's kind of the point on why noncompetes should be banned. If you want someone to stay at your company, make sure they want to work for you.
But then they would have to pay them more.
It's cheaper to just hire lobbyists.
As an animation fan this story reminds me of this from a few years back:
https://www.cartoonbrew.com/artist-rights/animation-workers-set-to-receive-170-million-payout-from-wage-theft-lawsuit-161482.html
“The lawsuit was sparked after it became clear that animation studios had colluded for years to set salary limits and avoid hiring artists from other studios, thereby circumventing the free market for the skills and talents of their employees.”
So if they can’t get what they want one way they’ll try another.
When I was a wage slave, I refused to sign non-compete agreements. They are invariably a clear indication of a very screwed-up management.
A business can either be good enough to attract and keep talent through its policies and practices, or it can try to capture its employees through legal contracts with punitive penalty clauses.
Guess which one produces a better society?
Hmm, I’m going to guess that it’s the one that also characterizes world-class businesses?
The rise of Silicon Valley is due to the unenforceability of noncompetes. Shockley Semiconductor begot Fairchild, and practically every major tech company in California is a descendant of those two.
Research has also indicated that outlawing noncompetes also benefits the corporations, even as they don't understand their value.
Yes. Noncompete bans allow other companies to poach your workers, but also allow you to poach theirs. The benefits of poaching theirs can easily outweigh the costs of them poaching yours.
If you lay off people, why do you get to ban them from competing against you?
Excellent question.
In Atlanta the “non- profit” Emory Hospital Borg,er, System has and strictly enforces a non- compete on all the medical personnel it has assimilated.
Spoiler: health care quality has not improved
My guess is a bunch of banks and hedge funds threatened to relocate their highest -paid (and highest-income-tax-paying) employees, all of whom are under noncompetes, to New Jersey or Connecticut if this passed as-is. I expect this will pass next year with an exclusion above a certain salary level - Hochul asked for 250K.
First, this speaks to a nationwide ban on this anti-free market practice. Second, I could live uneasily with a ban for salaries over $250K if adjusted annually for inflation. It would still be wrong, but I'm more interested in looking out for the Littlefellers than the Rockefellers.
It's not about any evidence. It's about power over labor.
How about we do something about the foolishness of the 9th circuit court of appeals which blocked the California law preventing employers from requiring employees to sign away their right to sue in court?
It's not the years of evidence, it's campaign donation opportunities.
Oh, nice! Just what we need, more corporate Dems eschewing Red Wing work boots in favor of those oh-so-comfortable Gucci loafers.
Time for NY Dems to elect a lefty guv with a spine.
Hokum sounds like she's from Buffalo. [Checks bio] Oh, she IS from Buffalo. 'Nuff said.
If Wall Street, hospitals, and business groups donate to Hochul's re-election campaign instead of her opponent, is it fair to call her foolish?
NY Dems are a particularly useless subset of the party.