I was hired by a contracting company and put into another company as a contractor. The contractor company kept dragging their feet in the actual contract, but the company needed me so I started, and after a few months, the company I worked for asked if they could hire me directly with much higher pay and benefits. There was a non-compete clause in the contract, but the contract was never signed. The company talked to the contracting company about it, and they said it can't happen since I am under a non-compete. So looked into it and realize the contract was never completed, and I told them, if they can provide me a copy of the signed contract, I will stay with them. In the end, I took the job. Edit: I was in IT Security
It pays to have a functioning brain. My brother does not have one. He's kind of the opposite of your story. Quite some time ago, he decided to buy a 1970 Chevy Nova. He managed to get it for a few hundred dollars, which was a CRAZY good deal. That was somewhere around 2000ish. He never drove it, never touched it, never did a damn thing with it. It just sat in the yard as stuff began growing in and on it. Some time later, someone decided he wanted to buy it from my brother. The guy gave him all the paperwork to sign and my brother legally signed everything over to the guy....and never got a check. 😂 Of course, I laugh about it now and still give my brother shit about it, but I wanted to bury a baseball bat in the dudes crap factory.
@@anteshell If you get paid by the week I suppose at most you wind up working a week for free in the worst case scenario. Now if you were paid by month? Yeah, get that contract completed first.
@@anteshell people don't always do things the right way. Look at the reply I wrote already to read about my brother doing things the wrong way and learning a lesson from it 😂
@@anteshell it usually doesn't happen but it's not that odd for it contracting. You get paid weekly and so even if you don't have a contract an offer is good enough. Now missing a week of pay is when it changes. I
I worked as a contractor at a place that got sold by a fairly large pharma company to a certain 3 letter company last year. They then shut the whole place down about 5 months later. As part of their severance they had a noncompete that made it impossible for everyone who worked there to get employed by a good majority of the industry for at least 6 months. There are cases where a noncompete make sense, but when they are actively preventing the normal worker from actually working in their career fields.... I find that to be a big problem.
Some people take the non compete thing to extremes. I worked for a contractor. I'm sure I didn't sign a non compete contract but he said by accepting work from him, I was under a non compete agreement. When I left his employ, he said I couldn't work as a welder in any capacity for any other employer. I told him I would work for anyone I could get a job with and he'd have to sue me.
About 15 years ago my now ex-wife worked for a fairly small maid service that made her sign a noncompete to work there. It was so she couldn't take their customers and start her own business, and it was a smart thing to do. A year later the owners sold out to service master. Service master wanted her to sign a new contract with them. I advised her not to sign as the old noncompete didn't prevent her from competing with the new owners which is why they wanted her to sign a new contract. Long story short, she ran a fairly successful small maid service for the next 8 years.
My sister did the same thing but they realized when she was leaving she had never signed the non-compete. They tried to get her to sign it in the last week she was there. She did leave and kept all the same customers at less then they were paying before.
@@selanryn5849 I said long story short for a reason. She didn't technically poach any clients. We put out thousands of fliers. We did put out many in neighborhoods she had worked in, but only a few decided to look elsewhere for cleaning services when the business was sold. Her name wasn't on the fliers, only the company name, and the few clients that wound up switching to her didn't know whose number they were calling when they decided to look elsewhere for cleaning services.
@@selanryn5849 the whole thing is sleezy and I do not defend it. You dont own people. You can't steal people because they aren't property. Nobody can steal your business/clients etc if your doing good work at a fair value. If your clients are being poached its because your business is failing somewhere and attempts to use the law to strong arm your competitors out of business instead of stepping up is gross and anti american
Had some experience with this. I worked in tech manufacturing for a good 20 years with a very unusual skillset. The company was unique in the US for that skillset. A branch of the military decided they needed that skillset and wanted the company to contract a particular process to make one of their projects possible... I can't be more specific, sorry. The Pentagon being staffed by the most intelligent people on the planet, decided that all of us had to sign a non-compete agreement and they wanted us to surrender ownership of our skills... Basically, claiming that our working for them gave us the skills necessary for the work that they couldn't get done anywhere else because we were the only US company with the skills to make the stuff they needed. Irony. So, the GM calls us into the break room and hands out a stack of paperwork to each of us, telling us we have to sign it to keep our jobs. I read it and paraphrase it, "So, they want to own the skills we've learned over the past 10+ years as the only people able to do what they want done... and if we cease to be employed here, we basically have to find something else to do for a living. So, once this job is finished, what prevents them from ending our employment and leaving all of us with an extremely large investment in our career that we are forbidden to work in?" Everyone handed the paperwork back to the GM and asked him whether he wanted to lose his entire shop crew right now, or tell the folks who were demanding this contract that we're doing just fine without making their super secret gadget for them. Apparently they needed their gadget more than they needed their BS contract.
Good for you! Even though my career doesn't typically pay much, I'd never give up my career for a single job. That's ridiculous. Kudos to you for finding that and refusing!
I can't imagine intentionally working your whole career in the private sector, just to get shanghaid by the government like that. Glad you folks stood up for yourselves.
In that case it would make more sense to have the workers sign a national security agreement which prevents them from disclosing or using information in a way that would harm national security.
I've worked in IT for nearly 30 years, and been asked to sign Non-competes several times... of course I worked in California for the first 20, and I reminded every company that asked me to sign one that they are not enforceable in CA as a matter of law.
It’s amazing to me how many CA employers attempt this when it isn’t enforceable, I guess they figure most won’t know and can be intimidated. I owned a company in CA for 25 years, I never asked employees to sign a non compete, it just isn’t right IMO. I had some good employees who left over the years, they felt they could do better elsewhere, and many of them did, and some of us still keep in touch. To be a win-win, the employee and employer need to “fit”, and in the long run it does a disservice to both to prolong a mismatch. When I sold this company I myself was subject to a five year non-compete, which was enforceable because it was related to my sale of the company. This is one area where I think CA law actually gets it right.
Do you know if it is enforceable when the company is HQ'd in California, but you work elsewhere?...IE I am a 1099 Outside Sales Rep living in Connecticut with the 6 New England states as my Territory. The company I signed the non-compete with is located in California (I didn't know any better at the time). I am now trying to get a job with a new company and they are being sticklers about this non-compete.
I hope this passes! I have an ex who is an Occupational Therapist. She was forced to sign one or quit when her company was bought and the new owner required a Noncompete. She ended up leaving without signing it. If she had signed it, if she had left down the road, she would have been barred from working within like 25 miles of Lansing. The business didn't pay for her extension education or training, it was her professional license, not theirs! Crazy!
There is a vet hospital by my home that makes their veterinarians sign them. One vet had to leave the state in order to continue to work on large animals after he left.
@@spiritsofthesky I honestly don't remember the name of it. It was a number of years ago and we aren't together anymore for me to ask her! Either way, she didn't sign it and left. I received a view into that world...and you're right, the politics and business side are garbage.
I recall a pizza shop in my town that was enticed to join a franchise. After a couple of months, the owners of the pizza shop decided that the fees paid to the head company was not worth it and so ended their arrangement. The owners of the franchising company tried to take legal action against the pizza shop but failed due to the small shop owners being a pizza shop before the franchise agreement. That pizza chain no longer exists.
Steve's covered a story before about fast food workers being forced into NCAs, it's ridiculous and such a hellish way to cause people to die because a company thinks their business deserves such ownership of your labour.
I have heard of companies trying to have new employees sign tight non-compete contracts at the time of hiring. Now since the employee is in a period of probation from the time of being hired at that job and he/she may be let-off at anytime without notice which means they can no longer even apply for such work as listed in the agreement for whatever time period is in the agreement. This would make many workers unable to continue in their line of work from that point on.
@@TheBooban just because it wouldn’t hold up in court doesn’t me you can’t be sue and have to pay money out your own pocket for attorney fees. Also it’s a very shitty thing to force non-competes on low wage and entry level workers.
@@alexbedel6320 Depends on the Union. I'm in a Union just because the meetings count towards the hours needed for my license. It sucks that I'll need to pay to go after I switch departments, but it's a good license, and won't cost me time off like the classes would. Up until now it was free. That said, in the past I used a union I wasn't part of to fix a problem at my old job. They were denying all time off for most employees even with 3 months headsup.
I was actually asked to sign one of these once, I considered giving up my job instead, I told my boss that I had 10 years experience in the paratransit field, 20 years experience in passenger transport, and I was bringing all of that experience to that company, it kind of doesn't seem fair that they now own all of the experience that I had gathered before and brought to them and that I couldn't use it for anyone else
In college, a friend of mine was told to sign a non-compete agreement if he wanted to keep his job. All he did was park cars as a valet company. The only reason you make a kid sign that is if you know you're going to abuse him, underpay him, take his tips, and limit his ability to work elsewhere when he gets tired of putting up with it.
I taught online IT classes for Company A for several years and we never had a non-compete. Some of management spun us off to form Company B and gave us instructors no notice. We were dragged along to the new company whether we wanted to go or not. Part of the paperwork for Company B included a non-compete saying we could not teach the same/similar classes with any competitors for two years after leaving the company. The instructors fought it tooth and nail because the classes we taught were online and we had students from all over the US along with some international students as well. I pointed out that because Company B is 'global' that any school that offered online classes would be considered a competitor to them, even VoTechs, community colleges, etc. The information we were teaching wasn't proprietary, either. I was the last hold-out but ended up told to sign it by Thursday or Friday would be my last day. The higher ups weren't happy when I signed it but wrote "Under Duress" under my signature. When they let me go about two years later due to "declining enrollment numbers" (not true) I hounded them daily until I was given a written release from the non-compete. I still teach the same type of classes as an independent contractor.
Your business has made non competes as effective as copyright law. It's hard for an IT school to enforce a non compete for a job with millions of qualified applicants. It's also hard to enforce copyright on training materials that have never been purchased by anyone but everyone has somehow acquired.
Teaching at different schools is so common that the college my mother taught at even called them "Roads Scholars" as in they were driving up and down the corridor getting to classes in different college districts.
I can see Non-compete clauses for certain areas such as Industry or DOD to prevent the issues that you highlighted, but for anyplace else, they need to go. To me, it's no different than the people that left the hospital for better jobs and it blew up to the point that it did. You want people to stay? Start with competitive pay and benefits.
@M167A1 if companies can't keep people without making them sign non competes then I'm not sure why they should be allowed to exist. I'm so tired of people talking out of both sides of their mouth like these companies are so super intelligent and efficient but if they don't have the deck stacked 100% in their favor they fall apart.
@@Aaron-kj8dv As a libertarian, I 100% agree. Any company that can't remain viable without shady, under-handed, and down-right anti-competitive tactics, has absolutely no right to exist. The sole reason we even have a government in this country, since upon its founding, is to ensure the gears of the free market stay well greased; any body of power, whether state or corporate, which corrodes those gears is to be promptly scrubbed away. Contracts signed under duress or which are otherwise obfuscatory are nothing short of screws purposefully jammed into the teeth of our system, and are to be treated as intentional and malicious sabotage. Should the foremen of our great system refuse to redress these critical issues, it shall one day be their blood which lubes those gears.
I'm so glad for this. I'll be sure to put in my comments to the FTC. I quit a job I had for 12 years at an employer who took me for granted for a much better one and I had to lawyer up, which cost me money I did not have. My lawyer told me I had "swords and shields" that would protect me in any lawsuit, but it's not about that. Non-competes against employees is so anti-American that you'd think there were laws here that would even allow authorities to grab any cash you had and make you sue to get what's rightfully yours. Oh wait.
Yep that's the problem people miss with "not legally enforceable", just because it isn't in a particular state doesn't mean you can't be tied up in court for far longer and more cost than its worth.
Nationwide Insurance recruited me to work for them. They had a non compete that basically said I would never work in the field again. I told them it was unenforceable and they agreed but said I had to sign it. That and various other lies convinced me to pass. Some time later their agents sued them for a lot of money and won.
Non-competes should also carry an incentive such as some sort of finical compensation. Additionally do you recall the case of the nurses that had the injunction brought against them for getting jobs at another hospital?
Since THE STEVE covered this in two videos, I am quite sure that he is aware of the employees of a hospital cardiac department going to the other hospital in the Fox Valley in Wisconsin. The Fox Valley has several very good hospitals in the several cities that within it.
Non-competes are supposed to carry a financial compensation for lost wages and, for a long time, did. It's only when companies shifted to forcing mid and low level employees to sign them under duress that it stopped happening
I've always thought they created the opportunity for abusive restraint on labor, and I'm typically a labor skeptic. Honestly, if someone wants you to not work for a competitor, you've better give them ample reason not to leave your employ.
Imagine a situation where company A spends a bunch of money training employees and then competitor B is able to offer those employees a higher wage because they don't have the expense of that training.
Imagine Comp A spending time and rss to train you and you become a great employee all to be sh@it on by a egotistical mgr and Comp B comes along and offers a better opportunity to better yourself and become more successful but wait you can’t because you signed away the right to work for Comp B for said years
Career minded folks only leave bad environments (outside of a can’t pass opportunity ) Management is the #1 reason for turnover The employee puts just as much if not more into their career as the company spends on time and rss to train them I’m speaking on career minded people not job hoopers
@@sonictech1000 That's a problem the company needs to work out, not the government. The solution certainly isn't a blanket regulation that allows any company to tell any worker in any position where they can and cannot work for the X years following employment.
@@ChickenPizza I agree that a blanket regulation isn't a good answer. That said in the U.S. regulations don't "allow" agreements, they only forbid them. In the absence of any regulation of non-compete agreements the employers and employee would be free to come to any mutually beneficial agreement they want. If a potential employee thinks the benefits (training, professional development, higher pay etc) are worth the restrictions then they would sign, otherwise they would negotiate or find an employer who didn't have such requirements.
I recall signing ten year noncompete agreements. They barred me from working in the same industry. Most of these were required upon joining the company. A few were requested during an exit interview. I refused all that were demanded at an exit interview.
This is a huge issue in the health care industry! Even when you pay for your own schooling they want to get you in one of these agreements...making it harder and harder for you to find better pay later on.
Amen, huge here in New Jersey. A fantastic spine orthopedic here just decided to move himself and his entire family to the West Coast because of restrictive clauses and non compete convenants that basically force you to move far away.
As a meteorologist working for a private weather company, we were in a death spiral. Common sense moves to bolster our customer base, and turn the ship around, presented by me, were ignored. Out of anger, I was fired. To be fair, I was pretty vocal...and I was right. Anyway, the severance package had a non-competition clause, and for that, they gave me an additional 17 thousand dollars, over and above two months of severance, and my 15 days vacation. The amount was just over 35 thousand dollars. HELL YES. Where's my pen! (I had a better job less than a month later)
Edit to add..June 30th, the following year, my friends showed up to work, and the doors were locked. NONE of them got a severance, or even their last paycheck. It was a blessing to be sure. I hired on two of them at my new company. I was a manager there. My old boss applied to come work for me, and I told him, in front of several of my former co-workers, that he could kiss my ass. He was a horrible human being, who once got arrested for dragging his daughter down a flight of stairs, by her hair, to force her to go to church. HI RAY!!!!
@@dennissvitak148 Doesn't sound like a very Christian man... I would have told him to go to church, or go meet God. Either way, he wasn't coming into the building.
@@LegendStormcrow - I didn't know he was coming. HR sent him to me for the interview. Clearly he was qualified for the position..he was 55, and educated.
This is great because about 20 years ago I had to sign a non-compete to work for a friend's cable internet company and the ironic part is that HE learned more from me than I ever learned from him but he was still adamant that I couldn't work for a competitor. I did watch him run his company into the ground when I left though. He got addicted to pills apparently and couldn't maintain any professionalism.
noncompete are illegal, they are anti-competitive, and unlawful contracts. In teh US according to contract law, a contract must benefit both signatories.
My husband had been towing and doing lockouts before he switched companies. His boss at the new business told him to sign a non compete; my husband looked at him laughed and said "I taught you how to do your job, maybe I should ask you to pay me for training you.
I have done a few Non-compete Agreements in the past, both of the times I have signed them they made sense. I work in IT. The first one limited me from doing sales with any current customers for 1 year (It was limited to sales I could still do IT work after someone else sold them something). The 2nd was limited me from working in their niche market (Market was clearly listed) for 6 months. In both cases they were reasonable. However, I have heard horror stories about some awful ones. Like one fast food place banning them from ever working with another fast food place for life.
@@jhoughjr1 well it’s not wrong in every other context. What if I’m working for a high end realty company or car sales at a high end dealership and sign a non compete for any current customers for 1 year would that work also? Wouldn’t that context also be reasonable and not in IT?
@@jhoughjr1 I listed that I work in IT so no one though I worked in sales. The first contract limited sales and was hard on people in sales, but didn't affect people who worked in other dept. Like IT, Account Managers, etc. unless they attempted to go into sales.
@@robertmiddleswarth4770 it does make a certain degree of sense in sales too as a lot of that is based off rapport with customers, and sales managers have definitely in the past taken client records to attempt to draw them towards their new employer/business, often they're gotten for theft or other elements of the process but as much as I hate NCAs and NDAs from personal experience I do get it where goodwill is involved and important.
I knew a teenager who worked during the summer at a day-camp for young children. His job was basically to make sure none of the kids did anything dangerous and to pass out food and drink at lunch and snack time. (A older employee, a college student, led the kids in activities). This teenager had to sign a non-compete agreement to do that job.
An old friend had an electrical business serving a vertical market and was approached by a large national electrical contractor to sell. He did the seven figure sale and backed away and watched as the new owner ran it into the ground. After the non-compete expired, he purchased it back at a five figure sale, built it back up, then sold it again for seven figures. The last time, he was a consultant for a few years to the new company, then when the non-compete expired, he started a consulting company for the vertical industry until he passed.
I was offered a non-compete once (as a contractor, not an employee). There were a number of issues in the contract they were offering, and they seemed unwilling to negotiate on any of them. I used the non-compete as my excuse for ending the relationship as it would have forced me to drop my other clients.
Make less than 6 figures? There shouldn't be a non-compete. Only other situation for me would be where there is a massive documented investment in training like Steve said, or when the person had access to true trade secrets i.e. a researcher that has access to a companies complete proprietary set of processes for creating their specific product line. The second example though, I think the company should be forced to prove it undeniably.
Problem with your idea is for the company to prove it.. they would have to publicly talk about their proprietary info.. so that defeats the entire purpose of a non compete in that scenario
Virginia has a law that they cannot be enforced in most case. I work security and another company bought out the site and offered more money. Previous company tried to tell me that I could not work for them due to non compete paperwork I was suppose to have signed. Virginia law thought that you have to make more than a certain amount of money for such contracts to be enforced, even if I had signed it.
I had to sign one once. When I left the company, it was a few months before a big trade show. They wanted me to continue to on through the show. I said I would, but the non-compete would have to be completely dropped. I added a few other things one (6 months benefits and 3 months severance). They took the deal and I started working for a competitor right after the trade show. My old friends from the company would ask how I did it...
This happened to me in early eighty's. At the time I was hired, there wasn't any non-compete in place. A year later, I was forced, ie under being fired for not signing, I signed it. A few years later, they laid me off during market slump. Since I was a software developer, and a electronic developer background, I didn't have that much trouble finding employment after the layoff, two week vacation and was employed with a different employer, different industry. My skills in electronics interfaces and programming enable me to move on.
@@socasack As its been agreed by rejection of the contract, both parties will go their separate ways. May the Markets decide in all things, The Invisible Hand Protects.
My friend as a hair stylist/beautician was forced to sign a noncompete, but she completely disregarded it and works a few blocks away at a different salon.
I know someone who did the exact same thing as the end of the story. Someone bought his truck accessories shop and ran it into the ground. After his NCA was up, he reopened two blocks away and all of his regular dealerships that needed bedliners and other past customers all came back to him. The other guy is out of business. Original owner got 615k to sell, invested a lot of it, made more money from the investments, then had gobs of cash leftover to reopen with a bigger and better shop. 😂
I'm Canadian and have signed many of them, my lawyer would always look them over first and most of the time they were reasonable. One time I was asked to sign one after I was working there for a while, I asked to be paid saying if it didn't have any value they wouldn't be asking of it. Another time it was with a company that was new in Canada, it was totally unreasonable and my lawyer said to sign it quickly as it was not enforceable. In Canada you pretty much have to be a director for it to be enforceable. Unlike the US we have laws to protect people from being forced out of the business they make their livelihood in.
" it was totally unreasonable and my lawyer said to sign it quickly as it was not enforceable" That sounds like terrible advice. You could end up spending 10 months and 100,000$ in legals fees before a court finally declares it unenforceable. I sure wouldn't sign it.
@@BrianBoniMakes Have you seen the cases being given the green light recently? Canadian judges these days are getting americanized, let almost anything go forth. And will your new employer really stick with you through all this risk, however small you seem to believe it is?
A friend was being "bought out" with a five year non-compete clause. His lawyer looked over that proposed contract and had his secretary retype it with five months instead. My friend asked if that was legal and his lawyer told him "it is if he signs it. He signed it... and my friend waited nine months before he took his patents to another company, just to be nice.
There was a high profile syndicate of Silicon Valley companies, including Apple and Google, who promised not to hire from each other and also to fix certain salaries at a given level. It explains quite a bit about why Silicon Valley high level salaries remained relatively stagnate in the early 2000s while companies had record profits and valuations. There was some sort of class settlement that paid certain employees a small amount, but it ended up being only a thousand dollars or so depending on some formula about how badly you were effected.
@@SonsOfLorgar I'm not sure exactly how the case was settled. There's anti-trust, there's various employment and blacklisting laws, there's the FTC. I recall the discovery was shocking, because they had all these high level executives, like Steve Jobs, promising they wouldn't hire or pay certain people above a level, very clearly a scheme to screw over their own employees.
Yes, that was found illegal. On the other hand, it makes no sense to invest billions of dollars in new technology just to have others get it at almost no cost. So the company that invested not only lost the engineers (that's ok) but the rival corporation gets the investment, which normally will take years, requires 100 people and billions. We need a rational take on this, or only an idiot will invest in developing technology on the Socialist USA because as you know they are passing laws preventing brilliant people from getting higher salaries.
I worked for a membership based retail store for a long time. When I started I was making $11 an hour, part-time. I kept my job at a convenience store to make ends meet. After 2 years doing this I had a new manager who decided they didn't like me. I don't remember exactly what happened now, but there was a shift that the manager wanted me to pick up and I said I can't because I'm working at the convenience store. They then made a thinly veiled threat to report me to upper management for working at a competing business. I called their bluff and asked how they thought they could convince upper management a convenience store was one of our competitors. They said something like, we sell similar items, but that was a stretch at best.
I've only ever signed one non compete for a year. It was a major competitor for the likes of Cars4sale and Lead Venture. I was an IT guy there and eventually was let go after the pandemic stay at home restrictions lifted. During that time I moved out of state to a summer weather state and they wanted me to come back. Well, best of luck to them. xD
If you have already been hired, and the employer later asks you to sign a non-compete agreement, surely the contract wouldn’t be valid because you would not be receiving any consideration?
In my industry and state, non-competes for senior executives and commissioned sales reps are usually enforceable. Non-disclosure agreements are also enforceable. However, if you tried enforcing a non-compete against an hourly employee, you'd be laughed out of court. I've heard of salon owners trying to enforce non-competes against minimum wage stylists, or people renting a chair in the salon - that doesn't normally work out well for the salon owner.
I've signed a non compete clause when I worked for an HVAC service company. The stipulation was that if you leave you can't take clients we(company owners) have acquired with you, but if you as an individual gain a new client/clients for the company then you are free to take them with you if you leave, which I believe is fair
It's actually not at all fair. If you are providing markedly better service, and could be successful on your own, why should consumers be stuck with the firm who isn't hungry anymore? Conversely, what makes you think customers would leave a firm that provides good service to go with a newbie? Noncompetes undermine all of the good aspects of real capitalism!
It's my belief that if there exists one general (political/societal) policy that is almost guaranteed to benefit the majority over time, it's maintaining competition/choice and eliminating cases of people being reliant on singular employers, sellers, providers, etc.
I'm curious if this would apply to the government as well. In case you didn't know, the US postal service has non-compete clauses with all of its employees while they still work there preventing them from working for another delivery company (ups, FedEx, Amazon, dhl) even if you are a part time employee.
As someone who works at FedEx we have the same rule but it's more about conflict of interest. It's also about protecting company secrets. Or so we're told.
When I sold my business I signed a non compete, which I was fine with. About two years later that business failed, now there was a gaping hole in the area. Several of the employees asked me to restart. I ended up having to pay the failed owners five figures to release me from the non compete before I could restart. I ended up building it back up and selling again, but this time I included a clause in the agreement that if the business failed the non compete was voided.
My brother had a friend who worked for a company that fired a bunch of employees and made them sign non-compete agreements before they got their last paycheck(his friend being one of them). Apparently nobody in management thought to check with the company's lawyers before making that move. Obviously the company settled before it got anywhere near a courtroom.
Probably good, those things are abusive sometimes. I got hit with one on my last job. Wasn't mentioned up front but was casually added to the stack of stuff they wanted me to sign after getting hired. Among those was an agreement they could fire me for virtually anything (at-will state they can do that), then the next page is I have to agree I can't work for anyone else in the same field for 6 months. Hang on a second, you can legally fire me next week then come after me if a competitor hires me immediately after? No way. I refused and they didn't fight it. Fair is fair, want to pay me for those 6 months you're forcing me to be unemployed? Great. Otherwise stick it.
If at-will employment is the law of the land, then noncompete agreements should either require ongoing payments that adequately cover the 'competitive' skills and knowledge, or they should be wholly illegal. Let employers choose to pay people not to work for their competition, but not to dictate what a person does after their term of employment.
Amazon makes all their employees sign a noncompete, but I researched it and found out they lost a high profile case against a senior software dev who violated the agreement. With software knowledge being one of the chief and most defendable reasons to have a noncompete, I figured the whole thing was dead on arrival and decided not to worry about it.
Hi Steve! In Germany we also have non-compete agreements, But they are time limited AND the company requiring the business who force non-compete agreements to their employees to pay their salaries for the period of the non-compete agreement. This tends to limit the willingness of employers to enforce the agreement, because if they win, all they get for it is a requirement to pay for 2 years of gardening-leave.
I used to work in shipping for a retail food company and the noncompete they forced on me a few weeks after I started was for 10 years in any food related industry, any logistics industry, or any retail industry. I have honored it after they laid me off since other that did not were taken to sealed arbitration for the wages they mad at that company and more. I know the practice of this is wrong, however some times fighting it would end up with my paying back almost a decade of wages in addition to penalties.
Thank you for this video. My concern is that I work for a phone company, BT&T. BB&T is notorious for layoffs, so I’m afraid my non compete glued me to this company for a year even if I’m let go. I can’t go work for Herizon for 1 year after my employment end date at BBT. My concern is that this industry is ALL I’ve ever known since I’ve entered my career. So in essence, I’m going to be forced to start over for a year if I’m let go. This has caused me many nights of lost sleep as I have a young family to look after. Furthermore, if I want to improve my financial situation, I can’t leave BBT to go work for a competitor, so there’s no pressure on them to improve my career trajectory because they know I can’t leave.
We had a major issue with Mason and Sheehan, the local morning DJs for PYX 106 for years (Albany, NY). They had a no-compete clause and when they jumped ship PYX enforced it. They had to stay off the air for several months which let the new host, Wolf, of Waking Up With The Wolf, get established. They'd lost some audience share. What really killed them though, was the big ice storm up in the North Country. Wolf, even although he was new to the area, immediately started a fundraiser to try to help. Mason and Sheehan, despite years in the community, didn't. They didn't last too much longer after that, although Mason tried to go on alone for a while.
I am so glad you are speaking on this because I just started in properly and casualty insurance! I felt so weird and uneasy about signing this and this video helps a lot!
One of the bits about non-competes you passed over (that you can see in the Jimmy Johns suit you read) was that they can be incredibly sweeping from a corporate environment. That Jimmy Johns agreement would mean that if you flew across the country you still couldn't work in most restaurants. As its ANY Jimmy Johns.
It wasn't just Jimmy John's. The way their non compete was worded it was any place that serves sandwiches. So basically any restaurant, cafe, some hotels. Etc etc.
@steve i was given a non compete when my company fired me. i ran a used computer store and did repairs in the dc area it was a larger chain people will know from the DMV area. it said for the radius of 500 miles i was not allowed to work at any type of job that had any type of computers at all. so i could not work anywhere within 500 miles of dc doing any job. if the owner had a computer in his office and i was cutting wood with an ax nope could not work there and that was from their lawyer i laughed my ass off at him reported him to the MD bar and said take me to court and you will pay me. well with in a year they lost 99% contracts for other things and all the employees ended up getting paid alot of back wages as they paid us once a month and was not paying overtime and the labor board loved when i handed them the non compete thy tired to make me sign when i filed for unemployment i was approved that day LOL.
Food vending usually has very strict non-compete clauses, who have a territory, and clients within. Switching vendors tends to take the clients with them
As an employee I would have them sign a similar contract stating that they can't hire anyone to replace you for the same time period you can't work anywhere.
This happens a bit in the hair salon industry. There's a high end salon where I live that's known for it. They require you not work within a 20 mile or 30 mile radius. They are crazy and will take you to court. I never worked there for that reason as well as the snobbish attitude. I was shocked at how they treated their customers as if they were an inconvenience. My hair school brought us there as part of an event due to us having the highest grades in school and spent a day with them.
Yup, I don't know how many escapees of that salon we had working under the table. Its was nuts the lengths they went to to find these girls and try to force them to either come back or drop out
Something very similar happened in my town years ago. a woman bought a local restaurant and really turned it around. The previous owners a few years later decided (for whatever reasons) they wanted to get back into the restaurant business and opened a new store, with just a slightly different name. In the end it killed her business due to all the confusion. Both shut down just a couple years later.
I’ve signed one of these when I worked for a commercial lawn care company. Something like two years I “couldn’t” go to another company or start my own. I quit in 3 months and started my own company in the same town and I wish a mother would try something
I feel this. I got an offer in IT at a 'right to work' state and after I accepted, I received a non-negotiable contact with a non-compete. I was like.... Really?
California does not allow non compete contracts and their economy is fine. The head of the FTC was on CNBC this morning and said that non competes would still be allow in some cases such as the sale of a business.
A close family member quit their job and moved 600+ miles away. Day 1 paperwork at the new job included a non-compete that was never discussed prior. Part of their new year's resolutions in 2023 is to find out, due to moves by their company, if their non-compete could be enforced if they left for a company banned by the NC. I have seen nothing in these articles about whether existing non-competes would be grandfathered or voided. Interested in this story developing into something legally with teeth.
Not a noncompete, but I know of an area where all the similar assisted living homes colluded to fix a low wage and scheduling requirement for the lower-paid aides. If one place mistreated or underpaid you, you couldn't get any benefit from saying you'll just go to work down the street. It was a sweet setup for the companies.
The state of massachusetts already has a similar law in effect. There are a limited number of conditions in which the non-compete clauses are still enforceable but not without a cost to the employer.
I definitely see a lot of danger with noncompete agreements. IDK if getting rid of it in all cases is the right way forward, but we do need some laws with teeth preventing the normalization of noncompete.
Writing software, mostly I've had to deal with NDA-like ptrotections of IP. This is usually much less problematic than it sounds: MANY constructions in code can't be owned because they are common art (a simple example is a for loop) or have become public domain, and the proprietary stuff is usually so situated that a) it is useless elsewhere, and b) I couldn't remenber it anyway. Usually by the time you leave, you don't WANT to remember this stuff. 😊 (BTW, the really valuable info is usually the "business" stuff - marketing plans, etc.) Non-competes crop up sometimes these days in severance packages. AFAIK, if these don't clearly establish a reasonable time, and industry and geographic scope, they may be held unenforceable. Whether you'd even be monitored for compliance is questionable, but who wants to get bit? I don't think I would sign one these days except for "good and valuable consideration" specific to (over and above other compensation) the non-compete.
I work for a small chemical extraction facility, have for several years. Not super specialized, but there is some proprietary procedure used, that all the staff have helped develop. However, the procedure we use can easily be covered by an NDA or researched online with a 30-minute web search. We have been asking the boss for about a year for written contracts since several of our terms were ambiguous. He finally got them for us and included a 2-year, nation-wide noncompete agreement in the contract because that is the maximum my state allows and we sell product "throughout the US". I tried to tell him that a court would likely find this too extreme to enforce, but he didn't believe me saying that if it were unenforceable, it wouldn't be allowed. I can't wait to show him this video. For context, the whole company are all on very good terms with one another and have known each other for the better part of a decade.
How non-competes should work: You get your full pay for the non-compete duration. As long as you're guarding their business secrets, you should get compensated for it. The business can then figure out if the delivery driver knows such important business secrets that it's worth paying them for months for sitting at home/switching career paths.
They definitely make sense when selling a business. They also make sense with high level guys depending on exact terms. I also understand some for if you are trained a skill, if the agreement is where the non compete goes away after a period of time. I have known shops that spend years training someone to be a mechanic only for them to leave and go to the competition once they are finally skilled. In that type of paid apprenticeship type situation I would understand a business requiring you agree to work with them for so long in exchange for they training you instead of you paying to go to school to learn.
Imagine paying a fair wage so the worker has no incentive to work for the competition or make the contract specify that if they leave before the training costs are recovered the mechanic has to pay back the difference.
I've seen the training cost reimbursement in person. Coworker completed school but the company refused to move him to the skilled position even though he had been and still was working this job. It ended up making more sense for him to pay the company back for the education expense and changing jobs.
@@SonsOfLorgar It is an agreement. You will work for me so long, at a competitive wage (if done fairly) but not at the top of the market. In exchange instead of paying thousands of dollars for schooling (which won't teach as much as on the job training), you will get paid to learn. That makes sense. It is a trade off up front and if done fairly, as I would recommend the person would still make more over that time than they would if they went to school first. Alternatively, ones could include a cost reimbursement clause. If done right this shouldn't be an issue. Of course as with everything ones will take advantage of it. But if you get rid of all of this, either people will have to go to school first and spend all the money or entry wages into the sector will tank. Either way the current labor shortage issue mechanical fields will be made much worse. Which means people will have to wait longer and pay more to have their cars fix. I am not saying this with any secret motive. I came up in the field and now have a small one man car lot. I just know all the issues in the field and I went to one of the better schools for actually teaching you hands on but still know that I would have been better off doing what I suggested than going to school.
I've experienced this from the IT side. My thinking is that if I have this new job skill, why aren't you paying me for it?Surprisingly most of what I learned over my career I learned on the job, and on my own, and not through company supplied education. I wasn't a burger flipper at McDonald's, I generated revenue for my company. They did not wish to pay me more money, nor did they want me to leave and get paid more money. So they created a situation where I was adequately compensated, not well compensated, and then made it difficult for me to find employment elsewhere. I'm supportive of any legislation that gives IT professionals overtime and portability.
@@ShenandoahShelty I am not talking about teaching yourself on the job. I am talking about taking someone with no skills and teaching them the skills on the job and not making them pay to go to school to learn them. I am not talking about permanently having the person forced to stay. But employers might not want to go through the time and effort to train someone that doesn't even have the basic skills for the job without a guarantee they will stay there for enough time to be worth the effort.
In some states, if you are given an offer by a competitor that pays more than your current job, the company that is enforcing the non-compete agreement has to pay the difference. It can even bee the full salary if you are between jobs. This has come up for a couple of jobs I have had that were in a specific industry where trade secrets were very common.
While I agree that non-competes do sometimes make sense, I think it would make a much better market overall if all non-competes were outlawed. Yes there would be downsides, but I think those would be outweighed by the benefits of a much more competitive market.
But is the NCA reasonable on its scope? Did I receive special training or trade secrets as a result of my relationship with the business? Did I earn a license and obtain industry training at my own expense or did the business pay for that? Are they saying I can’t EVER compete against them, or is there a reasonable time frame - like 6, 12 or 24 months after leaving the business? Am I restricted from working in this county or does the NCA say I can’t work ANYWHERE in my state - even if the business has no operations elsewhere? But then some businesses simply require NCA’s - even if unreasonable - to dissuade competition altogether among their people.
Teachers/educators are having to sign non compete contracts(ncc) and are stuck in untenable situations in failing/dangerous districts. Also, I read where hospitals are upping their NCC game to keep nurses in non-unionized systems. Both teachers and nurses can also lose their education grants if they leave before a given time period.
When I worked in event security s few years ago, it was common practice for guards to work for their company's direct competitors. Everyone signed a non compete clause upon hiring, but, lots of guards basically ignored it. I worked one event where two event security companies were not only staffing the same event, their campsites were right next to each other. One day I saw one guard from the company I was working for at the time literally drag their tent and belongings over to our competitor's camp site. I'm guessing that our competitor was paying their guards better
I think this will be better for employees overall. I commissioned a multipurpose 3d model for roughly $1600, but halfway through it's creation the modeler was hired to do cgi modeling for the she-hulk series and she had to sign a non-compete agreement which meant she couldn't finish the model I commissioned until a year after she was done working with marvel. Ended up being refunded a little less than half and being given a 3d base (The sum of her work on my commission) that I had to hire another person to finish and ended up costing me more than what the original modeler quoted.
@@mf-- She's apparently getting paid somewhere in the six digit range for her work on the series so I can't blame her taking the money. She couldn't say exactly how much but it was a low multiple of how much she usually makes in a year.
I think that generally a noncompete agreement in employment should carry with it severance pay appropriate to the time one cannot work in the same field. If they don’t want you working in your field of greatest expertise it’s only appropriate to be compensated for not working.
Years ago the company I work for wanted me to sign one that said I would not work in the field for 5 years or something stupid like that. I told them my college degree is where I learned how to do this not from you guys and I will not sign anything of the sort. I would sign a non disclosure agreement so I am legally bound not to steal your clients but I refuse to sign an NDR that would make me unemployable for 5 years. I never heard a thing after that so apparently it wasn't a requirement.
In a discussion elsewhere about this yesterday, a medical doctor in the discussion said that this will hit the hospitals heavily. According to him, hospitals require their specialists in many specialties to sign non compete agreements in an attempt to keep the doctor's patients from following them to other hospitals. For example, oncologists would be required to sign a non compete agreement while radiologists would generally not be required since patients aren't normally going to follow the radiologist when he changes jobs. This explains why a medical specialist I know has always moved to a different city when changing jobs.
I am in the computer repair business. If I hire a trained pro, and they want to leave, it is MY JOB to make an offer that keeps them or let them go. If I TRAIN THEM to repair computers, THAT is when I want a non-compete clause. I will not foot the bill for someone's training, just to have them quit when they feel they know enough, and start a competing business against me. I usually do them more about distance. You cannot work for a competitor or start your own shop within surrounding counties of, or in my county for 3 years minimum. As long as you go 2 counties away, have at it! :)
These agreements can go sideways in ways never imagined when signed. A long time equipment rental equipment company sold out to a national chain and signed a non compete. They then went bankrupt (or at least the local franchise did) and he did not get paid. So, he opened another rental company and the lawsuits began. The courts ruled against the original owner who now could not collect his payment and could not compete.
I signed one for my previous job, and I think I did for my current one. Left the previous one to go work for a competitor. I was told it happens all the time (I knew others that did during my time there) and they don't really pursue legal action against you unless maybe you were in some high level executive position.
When I worked at a pizza restaurant in Oklahoma delivering they made me sign a document saying I couldn’t work for another pizza/Italian restaurant for 5years and I wasn’t allowed to tell anyone about how they made the food (company secrets). So I was stuck working at that restaurant as a driver for almost 9 years because the job market in the town I lived was so small and consisted of mostly Italian or pizza restaurants.
@@mikapeltokorpi7671 Yes, but it seems to be an area where human nature is just to sign what people ask you to sign. I've surprised a few employers by not signing such agreements without changes (which they are often too busy to follow-up on, so it never gets signed). Once I had a consulting job but had to switch agencies as I was running up against an 18-month corporate limit. I approached a new company with the job in hand and asked if I could work through them and they still tried to get me to sign a non-compete. I couldn't get them to agree, so I found yet another company to work through. But avoiding non-competes is hard to do in a lot of cases when most of the other job seekers just blindly sign anything that an employer puts in front of them.
This story hits home for me. When I worked at Motorola, they would frequently come out with new protection policies. These are new policies that are designed to protect the company from being sued by employees. Anyways, they would tell all the employees that you must sign this agreement or you will be fired. These new policies usually come around each time the company lost a major court case and had to pay big $$$$$. Motorola was a major abuser of communities and employees. It is no wonder that they were being sued many times. I was witness to many of these abuses.
My mom lives in Pahrump, Nevada. The city has two wineries now. But they had one and it got sold. In the agreement the seller agreed not to open up another winery for 5 years I believe it was. Now, this was about 15 years ago now. The seller opened up a winery since then. 1-6-23
It's the first thing in well over a decade that I've heard coming from the government that isn't marching us straight into a dystopian corporate hegemony. I welcome the idea with open arms and hope greatly it gains traction and becomes law.
This is exactly what most non-americans think when they look at america. Your corporations have so much power over the government due to lobbying/election contributions. Its basically legalised corruption. How anyone thinks 'at will work' is a sensible rule is frankly beyond me.
@@M167A1 anyone who's driven out by this didn't have a good enough buisness idea in the first place and need to learn from their errors and try again. Cry me a river Karen.
It's about time! These contracts are anti-competitive and anti-worker. That is, they are bad from both left and right wing view points. Of course, as Steve pointed out there ae a few exceptions where they make sense, but reasonable carve outs that protect the rights of all parties should not be hard to come up with.
Correction they are bad for everyone. Even his example only goes to protect a poor performing company and helps prevent healthy competition and growth and supports defrauding customers by deception. The whole issue of mega corps buying up family businesses and skin walking as small business owners....how can anyone support that as a moral person?
I worked at a major burger chain when I was a kid that had me sign one of these. They treated their people like garbage. I had it, left and got a job for another major burger chain. I was 18, it was not worth their while to do anything to me.
in my youth i worked at two difference business that had me sign something similiar. one was a pizza place. i signed that i would not work at another pizza place, nor tell anyone how pizzas are made, for a number of years after the end of my employment. the other was as a guide, saying i would not guide for a year after end the end of employment. FYI
Doubt it will actually happen, but very rarely are non-competes truly relevant. It’s usually only to make it harder for an employee to leave and keep wages down.
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I was hired by a contracting company and put into another company as a contractor. The contractor company kept dragging their feet in the actual contract, but the company needed me so I started, and after a few months, the company I worked for asked if they could hire me directly with much higher pay and benefits. There was a non-compete clause in the contract, but the contract was never signed. The company talked to the contracting company about it, and they said it can't happen since I am under a non-compete. So looked into it and realize the contract was never completed, and I told them, if they can provide me a copy of the signed contract, I will stay with them. In the end, I took the job.
Edit: I was in IT Security
It pays to have a functioning brain. My brother does not have one. He's kind of the opposite of your story.
Quite some time ago, he decided to buy a 1970 Chevy Nova. He managed to get it for a few hundred dollars, which was a CRAZY good deal. That was somewhere around 2000ish. He never drove it, never touched it, never did a damn thing with it. It just sat in the yard as stuff began growing in and on it.
Some time later, someone decided he wanted to buy it from my brother. The guy gave him all the paperwork to sign and my brother legally signed everything over to the guy....and never got a check. 😂
Of course, I laugh about it now and still give my brother shit about it, but I wanted to bury a baseball bat in the dudes crap factory.
Why would you start working without a contract to begin with?
@@anteshell If you get paid by the week I suppose at most you wind up working a week for free in the worst case scenario. Now if you were paid by month? Yeah, get that contract completed first.
@@anteshell people don't always do things the right way. Look at the reply I wrote already to read about my brother doing things the wrong way and learning a lesson from it 😂
@@anteshell it usually doesn't happen but it's not that odd for it contracting. You get paid weekly and so even if you don't have a contract an offer is good enough. Now missing a week of pay is when it changes. I
I worked as a contractor at a place that got sold by a fairly large pharma company to a certain 3 letter company last year. They then shut the whole place down about 5 months later. As part of their severance they had a noncompete that made it impossible for everyone who worked there to get employed by a good majority of the industry for at least 6 months. There are cases where a noncompete make sense, but when they are actively preventing the normal worker from actually working in their career fields.... I find that to be a big problem.
I'm pretty sure that a non compete clause can't prevent you from working in your field. I think that has been legally challenged before.
If they are the ones getting rid of you, that non-compete is just scratchy toilet paper.
@@zancrus9629 That has been challenged. They can only be limited to a radius within reason.
How can you compete with a company that doesn't exist 🤔
Did 6 months severance pay come with that 6 month non-compete agreement? That’s the only way it would be acceptable for me.
Some people take the non compete thing to extremes. I worked for a contractor. I'm sure I didn't sign a non compete contract but he said by accepting work from him, I was under a non compete agreement. When I left his employ, he said I couldn't work as a welder in any capacity for any other employer. I told him I would work for anyone I could get a job with and he'd have to sue me.
About 15 years ago my now ex-wife worked for a fairly small maid service that made her sign a noncompete to work there. It was so she couldn't take their customers and start her own business, and it was a smart thing to do. A year later the owners sold out to service master. Service master wanted her to sign a new contract with them. I advised her not to sign as the old noncompete didn't prevent her from competing with the new owners which is why they wanted her to sign a new contract. Long story short, she ran a fairly successful small maid service for the next 8 years.
My sister did the same thing but they realized when she was leaving she had never signed the non-compete. They tried to get her to sign it in the last week she was there. She did leave and kept all the same customers at less then they were paying before.
Poaching clients is actually illegal regardless of any non-compete as client lists are considered trade secrets.
@@selanryn5849 I said long story short for a reason. She didn't technically poach any clients. We put out thousands of fliers. We did put out many in neighborhoods she had worked in, but only a few decided to look elsewhere for cleaning services when the business was sold. Her name wasn't on the fliers, only the company name, and the few clients that wound up switching to her didn't know whose number they were calling when they decided to look elsewhere for cleaning services.
@@selanryn5849which state? What law?
@@selanryn5849 the whole thing is sleezy and I do not defend it. You dont own people. You can't steal people because they aren't property. Nobody can steal your business/clients etc if your doing good work at a fair value. If your clients are being poached its because your business is failing somewhere and attempts to use the law to strong arm your competitors out of business instead of stepping up is gross and anti american
Had some experience with this.
I worked in tech manufacturing for a good 20 years with a very unusual skillset. The company was unique in the US for that skillset.
A branch of the military decided they needed that skillset and wanted the company to contract a particular process to make one of their projects possible... I can't be more specific, sorry.
The Pentagon being staffed by the most intelligent people on the planet, decided that all of us had to sign a non-compete agreement and they wanted us to surrender ownership of our skills... Basically, claiming that our working for them gave us the skills necessary for the work that they couldn't get done anywhere else because we were the only US company with the skills to make the stuff they needed.
Irony.
So, the GM calls us into the break room and hands out a stack of paperwork to each of us, telling us we have to sign it to keep our jobs.
I read it and paraphrase it, "So, they want to own the skills we've learned over the past 10+ years as the only people able to do what they want done... and if we cease to be employed here, we basically have to find something else to do for a living.
So, once this job is finished, what prevents them from ending our employment and leaving all of us with an extremely large investment in our career that we are forbidden to work in?"
Everyone handed the paperwork back to the GM and asked him whether he wanted to lose his entire shop crew right now, or tell the folks who were demanding this contract that we're doing just fine without making their super secret gadget for them.
Apparently they needed their gadget more than they needed their BS contract.
Sounds like government aholes too bloated on their own ego, all right.
Good for you! Even though my career doesn't typically pay much, I'd never give up my career for a single job. That's ridiculous. Kudos to you for finding that and refusing!
I can't imagine intentionally working your whole career in the private sector, just to get shanghaid by the government like that. Glad you folks stood up for yourselves.
In that case it would make more sense to have the workers sign a national security agreement which prevents them from disclosing or using information in a way that would harm national security.
I've worked in IT for nearly 30 years, and been asked to sign Non-competes several times... of course I worked in California for the first 20, and I reminded every company that asked me to sign one that they are not enforceable in CA as a matter of law.
It’s amazing to me how many CA employers attempt this when it isn’t enforceable, I guess they figure most won’t know and can be intimidated. I owned a company in CA for 25 years, I never asked employees to sign a non compete, it just isn’t right IMO. I had some good employees who left over the years, they felt they could do better elsewhere, and many of them did, and some of us still keep in touch. To be a win-win, the employee and employer need to “fit”, and in the long run it does a disservice to both to prolong a mismatch. When I sold this company I myself was subject to a five year non-compete, which was enforceable because it was related to my sale of the company. This is one area where I think CA law actually gets it right.
Not true, they just have to operate under very strict rules, as of California Business and Professions Code Section 16600
Broken clock has to be right twice a day. GJ California!
No only are they not enforceable in CA, it's illegal to even ask an employee to sign one.
Do you know if it is enforceable when the company is HQ'd in California, but you work elsewhere?...IE I am a 1099 Outside Sales Rep living in Connecticut with the 6 New England states as my Territory. The company I signed the non-compete with is located in California (I didn't know any better at the time). I am now trying to get a job with a new company and they are being sticklers about this non-compete.
I hope this passes! I have an ex who is an Occupational Therapist. She was forced to sign one or quit when her company was bought and the new owner required a Noncompete. She ended up leaving without signing it. If she had signed it, if she had left down the road, she would have been barred from working within like 25 miles of Lansing. The business didn't pay for her extension education or training, it was her professional license, not theirs! Crazy!
There is a vet hospital by my home that makes their veterinarians sign them. One vet had to leave the state in order to continue to work on large animals after he left.
I feel like it should be the company has to keep paying them until they find a new job if they want them to sign a non compete. It's so one sided.
I have a few ideas what company that might be. The politics and business side of rehab therapy are such garbage.
@@spiritsofthesky I honestly don't remember the name of it. It was a number of years ago and we aren't together anymore for me to ask her! Either way, she didn't sign it and left.
I received a view into that world...and you're right, the politics and business side are garbage.
@@marcsmith2708 All good. It's a real shame, because a lot of us go into those fields because we want to help people.
I recall a pizza shop in my town that was enticed to join a franchise. After a couple of months, the owners of the pizza shop decided that the fees paid to the head company was not worth it and so ended their arrangement. The owners of the franchising company tried to take legal action against the pizza shop but failed due to the small shop owners being a pizza shop before the franchise agreement. That pizza chain no longer exists.
Steve's covered a story before about fast food workers being forced into NCAs, it's ridiculous and such a hellish way to cause people to die because a company thinks their business deserves such ownership of your labour.
And that chain was called...?
What is the name of this failed franchise and what state was this in?
@@TheOrangeRoad
Eagle Boys in Australia.
I have heard of companies trying to have new employees sign tight non-compete contracts at the time of hiring. Now since the employee is in a period of probation from the time of being hired at that job and he/she may be let-off at anytime without notice which means they can no longer even apply for such work as listed in the agreement for whatever time period is in the agreement. This would make many workers unable to continue in their line of work from that point on.
@@TheBooban just because it wouldn’t hold up in court doesn’t me you can’t be sue and have to pay money out your own pocket for attorney fees. Also it’s a very shitty thing to force non-competes on low wage and entry level workers.
@@mclaine33 wouldn't even need an attorney. Just show up at the time listed on the paperwork and it'll be dismissed.
@@TheBooban I will never join a union.
@@alexbedel6320 Depends on the Union. I'm in a Union just because the meetings count towards the hours needed for my license. It sucks that I'll need to pay to go after I switch departments, but it's a good license, and won't cost me time off like the classes would. Up until now it was free.
That said, in the past I used a union I wasn't part of to fix a problem at my old job. They were denying all time off for most employees even with 3 months headsup.
@@TheBooban I run my own company so. Lol.
I was actually asked to sign one of these once, I considered giving up my job instead, I told my boss that I had 10 years experience in the paratransit field, 20 years experience in passenger transport, and I was bringing all of that experience to that company, it kind of doesn't seem fair that they now own all of the experience that I had gathered before and brought to them and that I couldn't use it for anyone else
In college, a friend of mine was told to sign a non-compete agreement if he wanted to keep his job. All he did was park cars as a valet company. The only reason you make a kid sign that is if you know you're going to abuse him, underpay him, take his tips, and limit his ability to work elsewhere when he gets tired of putting up with it.
I taught online IT classes for Company A for several years and we never had a non-compete. Some of management spun us off to form Company B and gave us instructors no notice. We were dragged along to the new company whether we wanted to go or not. Part of the paperwork for Company B included a non-compete saying we could not teach the same/similar classes with any competitors for two years after leaving the company. The instructors fought it tooth and nail because the classes we taught were online and we had students from all over the US along with some international students as well. I pointed out that because Company B is 'global' that any school that offered online classes would be considered a competitor to them, even VoTechs, community colleges, etc. The information we were teaching wasn't proprietary, either. I was the last hold-out but ended up told to sign it by Thursday or Friday would be my last day. The higher ups weren't happy when I signed it but wrote "Under Duress" under my signature. When they let me go about two years later due to "declining enrollment numbers" (not true) I hounded them daily until I was given a written release from the non-compete. I still teach the same type of classes as an independent contractor.
Your business has made non competes as effective as copyright law. It's hard for an IT school to enforce a non compete for a job with millions of qualified applicants. It's also hard to enforce copyright on training materials that have never been purchased by anyone but everyone has somehow acquired.
@@hewhohasnoidentity4377 good thing both of those were bullshit to begin with.
Teaching at different schools is so common that the college my mother taught at even called them "Roads Scholars" as in they were driving up and down the corridor getting to classes in different college districts.
I can see Non-compete clauses for certain areas such as Industry or DOD to prevent the issues that you highlighted, but for anyplace else, they need to go. To me, it's no different than the people that left the hospital for better jobs and it blew up to the point that it did. You want people to stay? Start with competitive pay and benefits.
Industry? That's pretty broad
@@M167A1 you completely missed his point. It's basically antitrust policy but for workers instead of business
@M167A1 if companies can't keep people without making them sign non competes then I'm not sure why they should be allowed to exist.
I'm so tired of people talking out of both sides of their mouth like these companies are so super intelligent and efficient but if they don't have the deck stacked 100% in their favor they fall apart.
@@Aaron-kj8dv
As a libertarian, I 100% agree. Any company that can't remain viable without shady, under-handed, and down-right anti-competitive tactics, has absolutely no right to exist.
The sole reason we even have a government in this country, since upon its founding, is to ensure the gears of the free market stay well greased; any body of power, whether state or corporate, which corrodes those gears is to be promptly scrubbed away. Contracts signed under duress or which are otherwise obfuscatory are nothing short of screws purposefully jammed into the teeth of our system, and are to be treated as intentional and malicious sabotage.
Should the foremen of our great system refuse to redress these critical issues, it shall one day be their blood which lubes those gears.
@@M167A1 How to show your a corrupt corporate shill without saying your a corporate shill...
I'm so glad for this. I'll be sure to put in my comments to the FTC. I quit a job I had for 12 years at an employer who took me for granted for a much better one and I had to lawyer up, which cost me money I did not have.
My lawyer told me I had "swords and shields" that would protect me in any lawsuit, but it's not about that. Non-competes against employees is so anti-American that you'd think there were laws here that would even allow authorities to grab any cash you had and make you sue to get what's rightfully yours.
Oh wait.
We sued over a 12-month non-compete agreement, due to the type of termination. Nine months and $90K later, we "won".
Yep that's the problem people miss with "not legally enforceable", just because it isn't in a particular state doesn't mean you can't be tied up in court for far longer and more cost than its worth.
@@cericat Exactly. As long as they have more money than you, not legally binding is meaningless.
Hopefully you sued for all costs to be covered
Nationwide Insurance recruited me to work for them. They had a non compete that basically said I would never work in the field again. I told them it was unenforceable and they agreed but said I had to sign it. That and various other lies convinced me to pass. Some time later their agents sued them for a lot of money and won.
Non-competes should also carry an incentive such as some sort of finical compensation. Additionally do you recall the case of the nurses that had the injunction brought against them for getting jobs at another hospital?
Since THE STEVE covered this in two videos, I am quite sure that he is aware of the employees of a hospital cardiac department going to the other hospital in the Fox Valley in Wisconsin. The Fox Valley has several very good hospitals in the several cities that within it.
If those nurses had signed a non-compete they would have been 🔩
Non-competes are supposed to carry a financial compensation for lost wages and, for a long time, did. It's only when companies shifted to forcing mid and low level employees to sign them under duress that it stopped happening
I've always thought they created the opportunity for abusive restraint on labor, and I'm typically a labor skeptic. Honestly, if someone wants you to not work for a competitor, you've better give them ample reason not to leave your employ.
Imagine a situation where company A spends a bunch of money training employees and then competitor B is able to offer those employees a higher wage because they don't have the expense of that training.
Imagine Comp A spending time and rss to train you and you become a great employee all to be sh@it on by a egotistical mgr and Comp B comes along and offers a better opportunity to better yourself and become more successful but wait you can’t because you signed away the right to work for Comp B for said years
Career minded folks only leave bad environments (outside of a can’t pass opportunity )
Management is the #1 reason for turnover
The employee puts just as much if not more into their career as the company spends on time and rss to train them
I’m speaking on career minded people not job hoopers
@@sonictech1000 That's a problem the company needs to work out, not the government. The solution certainly isn't a blanket regulation that allows any company to tell any worker in any position where they can and cannot work for the X years following employment.
@@ChickenPizza I agree that a blanket regulation isn't a good answer. That said in the U.S. regulations don't "allow" agreements, they only forbid them. In the absence of any regulation of non-compete agreements the employers and employee would be free to come to any mutually beneficial agreement they want. If a potential employee thinks the benefits (training, professional development, higher pay etc) are worth the restrictions then they would sign, otherwise they would negotiate or find an employer who didn't have such requirements.
I recall signing ten year noncompete agreements. They barred me from working in the same industry. Most of these were required upon joining the company. A few were requested during an exit interview. I refused all that were demanded at an exit interview.
This is a huge issue in the health care industry! Even when you pay for your own schooling they want to get you in one of these agreements...making it harder and harder for you to find better pay later on.
Yea it’s awful! I’m in healthcare as well. We need to fight to ban non competes! WE THE PEOPLE!
Amen, huge here in New Jersey. A fantastic spine orthopedic here just decided to move himself and his entire family to the West Coast because of restrictive clauses and non compete convenants that basically force you to move far away.
As a meteorologist working for a private weather company, we were in a death spiral. Common sense moves to bolster our customer base, and turn the ship around, presented by me, were ignored. Out of anger, I was fired. To be fair, I was pretty vocal...and I was right. Anyway, the severance package had a non-competition clause, and for that, they gave me an additional 17 thousand dollars, over and above two months of severance, and my 15 days vacation. The amount was just over 35 thousand dollars. HELL YES. Where's my pen! (I had a better job less than a month later)
Edit to add..June 30th, the following year, my friends showed up to work, and the doors were locked. NONE of them got a severance, or even their last paycheck. It was a blessing to be sure. I hired on two of them at my new company. I was a manager there. My old boss applied to come work for me, and I told him, in front of several of my former co-workers, that he could kiss my ass. He was a horrible human being, who once got arrested for dragging his daughter down a flight of stairs, by her hair, to force her to go to church. HI RAY!!!!
@@dennissvitak148 Doesn't sound like a very Christian man... I would have told him to go to church, or go meet God. Either way, he wasn't coming into the building.
@@LegendStormcrow - I didn't know he was coming. HR sent him to me for the interview. Clearly he was qualified for the position..he was 55, and educated.
@@dennissvitak148 I was saying HE didn't sound Christian. Yeah, he deserved to have his job denied.
This is great because about 20 years ago I had to sign a non-compete to work for a friend's cable internet company and the ironic part is that HE learned more from me than I ever learned from him but he was still adamant that I couldn't work for a competitor. I did watch him run his company into the ground when I left though. He got addicted to pills apparently and couldn't maintain any professionalism.
It's crazy what Purdue Pharma was able to get away with
Good news. It’s incredible how non-competes are being abused.
noncompete are illegal, they are anti-competitive, and unlawful contracts. In teh US according to contract law, a contract must benefit both signatories.
My husband had been towing and doing lockouts before he switched companies. His boss at the new business told him to sign a non compete; my husband looked at him laughed and said "I taught you how to do your job, maybe I should ask you to pay me for training you.
I have done a few Non-compete Agreements in the past, both of the times I have signed them they made sense. I work in IT. The first one limited me from doing sales with any current customers for 1 year (It was limited to sales I could still do IT work after someone else sold them something). The 2nd was limited me from working in their niche market (Market was clearly listed) for 6 months. In both cases they were reasonable. However, I have heard horror stories about some awful ones. Like one fast food place banning them from ever working with another fast food place for life.
Those non-competes make perfect sense and there wouldn't be issues if that's how they were used.
I dont see how something wrong in every other context gets a pass in IT.
@@jhoughjr1 well it’s not wrong in every other context.
What if I’m working for a high end realty company or car sales at a high end dealership and sign a non compete for any current customers for 1 year would that work also? Wouldn’t that context also be reasonable and not in IT?
@@jhoughjr1 I listed that I work in IT so no one though I worked in sales. The first contract limited sales and was hard on people in sales, but didn't affect people who worked in other dept. Like IT, Account Managers, etc. unless they attempted to go into sales.
@@robertmiddleswarth4770 it does make a certain degree of sense in sales too as a lot of that is based off rapport with customers, and sales managers have definitely in the past taken client records to attempt to draw them towards their new employer/business, often they're gotten for theft or other elements of the process but as much as I hate NCAs and NDAs from personal experience I do get it where goodwill is involved and important.
I'm a somewhat specialised professional engineer. If I fell under a noncompete, I pretty much couldn't work for anyone but this one company.
I knew a teenager who worked during the summer at a day-camp for young children. His job was basically to make sure none of the kids did anything dangerous and to pass out food and drink at lunch and snack time. (A older employee, a college student, led the kids in activities). This teenager had to sign a non-compete agreement to do that job.
That's fucking bullshit, and I hope you advised him to name and shame the asshole camp organiser to the local press?
Unbelievable!
An old friend had an electrical business serving a vertical market and was approached by a large national electrical contractor to sell. He did the seven figure sale and backed away and watched as the new owner ran it into the ground. After the non-compete expired, he purchased it back at a five figure sale, built it back up, then sold it again for seven figures. The last time, he was a consultant for a few years to the new company, then when the non-compete expired, he started a consulting company for the vertical industry until he passed.
I was offered a non-compete once (as a contractor, not an employee). There were a number of issues in the contract they were offering, and they seemed unwilling to negotiate on any of them. I used the non-compete as my excuse for ending the relationship as it would have forced me to drop my other clients.
This happens all the time in the medical field. They usually don’t want you working with in a 50 - 100 miles
Make less than 6 figures? There shouldn't be a non-compete.
Only other situation for me would be where there is a massive documented investment in training like Steve said, or when the person had access to true trade secrets i.e. a researcher that has access to a companies complete proprietary set of processes for creating their specific product line. The second example though, I think the company should be forced to prove it undeniably.
It mostly should be for business owners who sell.
Problem with your idea is for the company to prove it.. they would have to publicly talk about their proprietary info.. so that defeats the entire purpose of a non compete in that scenario
@@QargZer No. They only have to talk in a court room that is not open to the public at the time.
@@orppranator5230 unless the court seals the documents and seals the transcript it would be public.. courts are PUBLIC
Virginia has a law that they cannot be enforced in most case. I work security and another company bought out the site and offered more money. Previous company tried to tell me that I could not work for them due to non compete paperwork I was suppose to have signed. Virginia law thought that you have to make more than a certain amount of money for such contracts to be enforced, even if I had signed it.
I had to sign one once. When I left the company, it was a few months before a big trade show. They wanted me to continue to on through the show. I said I would, but the non-compete would have to be completely dropped. I added a few other things one (6 months benefits and 3 months severance). They took the deal and I started working for a competitor right after the trade show. My old friends from the company would ask how I did it...
This happened to me in early eighty's. At the time I was hired, there wasn't any non-compete in place. A year later, I was forced, ie under being fired for not signing, I signed it. A few years later, they laid me off during market slump. Since I was a software developer, and a electronic developer background, I didn't have that much trouble finding employment after the layoff, two week vacation and was employed with a different employer, different industry. My skills in electronics interfaces and programming enable me to move on.
Seems to me that Non-compete Agreements shouldn’t apply when an employer fires you, only when you quit.
Rule number 1 : Never sign a noncompete, if you are an employee.
Rule 1- never take a drug test.
You can have 2nd rule
If you don't want the job - then you don't have to sign a non-compete. In some industries, if you don't agree - you don't get the job.
@@socasack As its been agreed by rejection of the contract, both parties will go their separate ways. May the Markets decide in all things, The Invisible Hand Protects.
Depending on the industry that you are in you'll be very hard pressed to find a company that doesn't force a non compete
My friend as a hair stylist/beautician was forced to sign a noncompete, but she completely disregarded it and works a few blocks away at a different salon.
I know someone who did the exact same thing as the end of the story. Someone bought his truck accessories shop and ran it into the ground. After his NCA was up, he reopened two blocks away and all of his regular dealerships that needed bedliners and other past customers all came back to him. The other guy is out of business.
Original owner got 615k to sell, invested a lot of it, made more money from the investments, then had gobs of cash leftover to reopen with a bigger and better shop. 😂
I'm Canadian and have signed many of them, my lawyer would always look them over first and most of the time they were reasonable. One time I was asked to sign one after I was working there for a while, I asked to be paid saying if it didn't have any value they wouldn't be asking of it. Another time it was with a company that was new in Canada, it was totally unreasonable and my lawyer said to sign it quickly as it was not enforceable. In Canada you pretty much have to be a director for it to be enforceable. Unlike the US we have laws to protect people from being forced out of the business they make their livelihood in.
" it was totally unreasonable and my lawyer said to sign it quickly as it was not enforceable"
That sounds like terrible advice. You could end up spending 10 months and 100,000$ in legals fees before a court finally declares it unenforceable. I sure wouldn't sign it.
@@noseboop4354 Not in Canada. We don't have the baseless suit system, you need to have cases vetted before a judge will even look at them.
@@BrianBoniMakes Have you seen the cases being given the green light recently? Canadian judges these days are getting americanized, let almost anything go forth. And will your new employer really stick with you through all this risk, however small you seem to believe it is?
A friend was being "bought out" with a five year non-compete clause. His lawyer looked over that proposed contract and had his secretary retype it with five months instead. My friend asked if that was legal and his lawyer told him "it is if he signs it.
He signed it... and my friend waited nine months before he took his patents to another company, just to be nice.
If you change any terms or conditions of a contract before signing, the changes need to be disclosed and initialed to be legally binding
There was a high profile syndicate of Silicon Valley companies, including Apple and Google, who promised not to hire from each other and also to fix certain salaries at a given level. It explains quite a bit about why Silicon Valley high level salaries remained relatively stagnate in the early 2000s while companies had record profits and valuations. There was some sort of class settlement that paid certain employees a small amount, but it ended up being only a thousand dollars or so depending on some formula about how badly you were effected.
Doesn't that fall under cartel prevention laws?
@@SonsOfLorgar I'm not sure exactly how the case was settled. There's anti-trust, there's various employment and blacklisting laws, there's the FTC. I recall the discovery was shocking, because they had all these high level executives, like Steve Jobs, promising they wouldn't hire or pay certain people above a level, very clearly a scheme to screw over their own employees.
Yes, that was found illegal. On the other hand, it makes no sense to invest billions of dollars in new technology just to have others get it at almost no cost. So the company that invested not only lost the engineers (that's ok) but the rival corporation gets the investment, which normally will take years, requires 100 people and billions. We need a rational take on this, or only an idiot will invest in developing technology on the Socialist USA because as you know they are passing laws preventing brilliant people from getting higher salaries.
@@SonsOfLorgar It was found to be illegal/
They also use H1B visas to keep wages low because they bring over foreigners and essentially pay them in dog food
I worked for a membership based retail store for a long time. When I started I was making $11 an hour, part-time. I kept my job at a convenience store to make ends meet. After 2 years doing this I had a new manager who decided they didn't like me. I don't remember exactly what happened now, but there was a shift that the manager wanted me to pick up and I said I can't because I'm working at the convenience store. They then made a thinly veiled threat to report me to upper management for working at a competing business. I called their bluff and asked how they thought they could convince upper management a convenience store was one of our competitors. They said something like, we sell similar items, but that was a stretch at best.
I've only ever signed one non compete for a year. It was a major competitor for the likes of Cars4sale and Lead Venture. I was an IT guy there and eventually was let go after the pandemic stay at home restrictions lifted. During that time I moved out of state to a summer weather state and they wanted me to come back. Well, best of luck to them. xD
If you have already been hired, and the employer later asks you to sign a non-compete agreement, surely the contract wouldn’t be valid because you would not be receiving any consideration?
In my industry and state, non-competes for senior executives and commissioned sales reps are usually enforceable. Non-disclosure agreements are also enforceable. However, if you tried enforcing a non-compete against an hourly employee, you'd be laughed out of court. I've heard of salon owners trying to enforce non-competes against minimum wage stylists, or people renting a chair in the salon - that doesn't normally work out well for the salon owner.
I've signed a non compete clause when I worked for an HVAC service company. The stipulation was that if you leave you can't take clients we(company owners) have acquired with you, but if you as an individual gain a new client/clients for the company then you are free to take them with you if you leave, which I believe is fair
It's actually not at all fair. If you are providing markedly better service, and could be successful on your own, why should consumers be stuck with the firm who isn't hungry anymore? Conversely, what makes you think customers would leave a firm that provides good service to go with a newbie? Noncompetes undermine all of the good aspects of real capitalism!
It's my belief that if there exists one general (political/societal) policy that is almost guaranteed to benefit the majority over time, it's maintaining competition/choice and eliminating cases of people being reliant on singular employers, sellers, providers, etc.
I'm curious if this would apply to the government as well. In case you didn't know, the US postal service has non-compete clauses with all of its employees while they still work there preventing them from working for another delivery company (ups, FedEx, Amazon, dhl) even if you are a part time employee.
As someone who works at FedEx we have the same rule but it's more about conflict of interest. It's also about protecting company secrets. Or so we're told.
Lysander Spooner had shown that the USPS dislikes competition.
When I sold my business I signed a non compete, which I was fine with. About two years later that business failed, now there was a gaping hole in the area. Several of the employees asked me to restart. I ended up having to pay the failed owners five figures to release me from the non compete before I could restart.
I ended up building it back up and selling again, but this time I included a clause in the agreement that if the business failed the non compete was voided.
My brother had a friend who worked for a company that fired a bunch of employees and made them sign non-compete agreements before they got their last paycheck(his friend being one of them). Apparently nobody in management thought to check with the company's lawyers before making that move. Obviously the company settled before it got anywhere near a courtroom.
I support it 100%. I’ve seen some crazy clauses in healthcare in tx for physicians.
Probably good, those things are abusive sometimes. I got hit with one on my last job. Wasn't mentioned up front but was casually added to the stack of stuff they wanted me to sign after getting hired. Among those was an agreement they could fire me for virtually anything (at-will state they can do that), then the next page is I have to agree I can't work for anyone else in the same field for 6 months. Hang on a second, you can legally fire me next week then come after me if a competitor hires me immediately after? No way. I refused and they didn't fight it. Fair is fair, want to pay me for those 6 months you're forcing me to be unemployed? Great. Otherwise stick it.
If at-will employment is the law of the land, then noncompete agreements should either require ongoing payments that adequately cover the 'competitive' skills and knowledge, or they should be wholly illegal.
Let employers choose to pay people not to work for their competition, but not to dictate what a person does after their term of employment.
Amazon makes all their employees sign a noncompete, but I researched it and found out they lost a high profile case against a senior software dev who violated the agreement. With software knowledge being one of the chief and most defendable reasons to have a noncompete, I figured the whole thing was dead on arrival and decided not to worry about it.
Hi Steve!
In Germany we also have non-compete agreements, But they are time limited AND the company requiring the business who force non-compete agreements to their employees to pay their salaries for the period of the non-compete agreement. This tends to limit the willingness of employers to enforce the agreement, because if they win, all they get for it is a requirement to pay for 2 years of gardening-leave.
I used to work in shipping for a retail food company and the noncompete they forced on me a few weeks after I started was for 10 years in any food related industry, any logistics industry, or any retail industry. I have honored it after they laid me off since other that did not were taken to sealed arbitration for the wages they mad at that company and more. I know the practice of this is wrong, however some times fighting it would end up with my paying back almost a decade of wages in addition to penalties.
Fuck that, Unless they agree to match any salary offer made in those 10 years, for the duration they want to enforce it.
That’s literally slavery.
Thank you for this video. My concern is that I work for a phone company, BT&T. BB&T is notorious for layoffs, so I’m afraid my non compete glued me to this company for a year even if I’m let go. I can’t go work for Herizon for 1 year after my employment end date at BBT. My concern is that this industry is ALL I’ve ever known since I’ve entered my career. So in essence, I’m going to be forced to start over for a year if I’m let go. This has caused me many nights of lost sleep as I have a young family to look after. Furthermore, if I want to improve my financial situation, I can’t leave BBT to go work for a competitor, so there’s no pressure on them to improve my career trajectory because they know I can’t leave.
We had a major issue with Mason and Sheehan, the local morning DJs for PYX 106 for years (Albany, NY). They had a no-compete clause and when they jumped ship PYX enforced it. They had to stay off the air for several months which let the new host, Wolf, of Waking Up With The Wolf, get established. They'd lost some audience share. What really killed them though, was the big ice storm up in the North Country. Wolf, even although he was new to the area, immediately started a fundraiser to try to help. Mason and Sheehan, despite years in the community, didn't. They didn't last too much longer after that, although Mason tried to go on alone for a while.
I am so glad you are speaking on this because I just started in properly and casualty insurance! I felt so weird and uneasy about signing this and this video helps a lot!
One of the bits about non-competes you passed over (that you can see in the Jimmy Johns suit you read) was that they can be incredibly sweeping from a corporate environment. That Jimmy Johns agreement would mean that if you flew across the country you still couldn't work in most restaurants. As its ANY Jimmy Johns.
It wasn't just Jimmy John's. The way their non compete was worded it was any place that serves sandwiches. So basically any restaurant, cafe, some hotels. Etc etc.
@steve i was given a non compete when my company fired me. i ran a used computer store and did repairs in the dc area it was a larger chain people will know from the DMV area. it said for the radius of 500 miles i was not allowed to work at any type of job that had any type of computers at all. so i could not work anywhere within 500 miles of dc doing any job. if the owner had a computer in his office and i was cutting wood with an ax nope could not work there and that was from their lawyer i laughed my ass off at him reported him to the MD bar and said take me to court and you will pay me. well with in a year they lost 99% contracts for other things and all the employees ended up getting paid alot of back wages as they paid us once a month and was not paying overtime and the labor board loved when i handed them the non compete thy tired to make me sign when i filed for unemployment i was approved that day LOL.
Food vending usually has very strict non-compete clauses, who have a territory, and clients within. Switching vendors tends to take the clients with them
As an employee I would have them sign a similar contract stating that they can't hire anyone to replace you for the same time period you can't work anywhere.
This happens a bit in the hair salon industry. There's a high end salon where I live that's known for it. They require you not work within a 20 mile or 30 mile radius. They are crazy and will take you to court. I never worked there for that reason as well as the snobbish attitude. I was shocked at how they treated their customers as if they were an inconvenience. My hair school brought us there as part of an event due to us having the highest grades in school and spent a day with them.
Yup, I don't know how many escapees of that salon we had working under the table. Its was nuts the lengths they went to to find these girls and try to force them to either come back or drop out
Something very similar happened in my town years ago. a woman bought a local restaurant and really turned it around. The previous owners a few years later decided (for whatever reasons) they wanted to get back into the restaurant business and opened a new store, with just a slightly different name. In the end it killed her business due to all the confusion. Both shut down just a couple years later.
I’ve signed one of these when I worked for a commercial lawn care company. Something like two years I “couldn’t” go to another company or start my own. I quit in 3 months and started my own company in the same town and I wish a mother would try something
I feel this. I got an offer in IT at a 'right to work' state and after I accepted, I received a non-negotiable contact with a non-compete. I was like.... Really?
California does not allow non compete contracts and their economy is fine. The head of the FTC was on CNBC this morning and said that non competes would still be allow in some cases such as the sale of a business.
A close family member quit their job and moved 600+ miles away. Day 1 paperwork at the new job included a non-compete that was never discussed prior. Part of their new year's resolutions in 2023 is to find out, due to moves by their company, if their non-compete could be enforced if they left for a company banned by the NC. I have seen nothing in these articles about whether existing non-competes would be grandfathered or voided. Interested in this story developing into something legally with teeth.
Not a noncompete, but I know of an area where all the similar assisted living homes colluded to fix a low wage and scheduling requirement for the lower-paid aides. If one place mistreated or underpaid you, you couldn't get any benefit from saying you'll just go to work down the street. It was a sweet setup for the companies.
That's illegal as hell and also known as a cartel.
The state of massachusetts already has a similar law in effect. There are a limited number of conditions in which the non-compete clauses are still enforceable but not without a cost to the employer.
I definitely see a lot of danger with noncompete agreements. IDK if getting rid of it in all cases is the right way forward, but we do need some laws with teeth preventing the normalization of noncompete.
Writing software, mostly I've had to deal with NDA-like ptrotections of IP. This is usually much less problematic than it sounds: MANY constructions in code can't be owned because they are common art (a simple example is a for loop) or have become public domain, and the proprietary stuff is usually so situated that a) it is useless elsewhere, and b) I couldn't remenber it anyway. Usually by the time you leave, you don't WANT to remember this stuff. 😊 (BTW, the really valuable info is usually the "business" stuff - marketing plans, etc.) Non-competes crop up sometimes these days in severance packages. AFAIK, if these don't clearly establish a reasonable time, and industry and geographic scope, they may be held unenforceable. Whether you'd even be monitored for compliance is questionable, but who wants to get bit? I don't think I would sign one these days except for "good and valuable consideration" specific to (over and above other compensation) the non-compete.
I work for a small chemical extraction facility, have for several years. Not super specialized, but there is some proprietary procedure used, that all the staff have helped develop. However, the procedure we use can easily be covered by an NDA or researched online with a 30-minute web search. We have been asking the boss for about a year for written contracts since several of our terms were ambiguous. He finally got them for us and included a 2-year, nation-wide noncompete agreement in the contract because that is the maximum my state allows and we sell product "throughout the US". I tried to tell him that a court would likely find this too extreme to enforce, but he didn't believe me saying that if it were unenforceable, it wouldn't be allowed. I can't wait to show him this video. For context, the whole company are all on very good terms with one another and have known each other for the better part of a decade.
How non-competes should work:
You get your full pay for the non-compete duration. As long as you're guarding their business secrets, you should get compensated for it.
The business can then figure out if the delivery driver knows such important business secrets that it's worth paying them for months for sitting at home/switching career paths.
I had a noncompete as a dishwasher. Those circular scrubbing techniques are proprietary!
They definitely make sense when selling a business. They also make sense with high level guys depending on exact terms. I also understand some for if you are trained a skill, if the agreement is where the non compete goes away after a period of time. I have known shops that spend years training someone to be a mechanic only for them to leave and go to the competition once they are finally skilled. In that type of paid apprenticeship type situation I would understand a business requiring you agree to work with them for so long in exchange for they training you instead of you paying to go to school to learn.
Imagine paying a fair wage so the worker has no incentive to work for the competition or make the contract specify that if they leave before the training costs are recovered the mechanic has to pay back the difference.
I've seen the training cost reimbursement in person. Coworker completed school but the company refused to move him to the skilled position even though he had been and still was working this job. It ended up making more sense for him to pay the company back for the education expense and changing jobs.
@@SonsOfLorgar It is an agreement. You will work for me so long, at a competitive wage (if done fairly) but not at the top of the market. In exchange instead of paying thousands of dollars for schooling (which won't teach as much as on the job training), you will get paid to learn. That makes sense. It is a trade off up front and if done fairly, as I would recommend the person would still make more over that time than they would if they went to school first. Alternatively, ones could include a cost reimbursement clause. If done right this shouldn't be an issue. Of course as with everything ones will take advantage of it. But if you get rid of all of this, either people will have to go to school first and spend all the money or entry wages into the sector will tank. Either way the current labor shortage issue mechanical fields will be made much worse. Which means people will have to wait longer and pay more to have their cars fix. I am not saying this with any secret motive. I came up in the field and now have a small one man car lot. I just know all the issues in the field and I went to one of the better schools for actually teaching you hands on but still know that I would have been better off doing what I suggested than going to school.
I've experienced this from the IT side. My thinking is that if I have this new job skill, why aren't you paying me for it?Surprisingly most of what I learned over my career I learned on the job, and on my own, and not through company supplied education. I wasn't a burger flipper at McDonald's, I generated revenue for my company. They did not wish to pay me more money, nor did they want me to leave and get paid more money. So they created a situation where I was adequately compensated, not well compensated, and then made it difficult for me to find employment elsewhere. I'm supportive of any legislation that gives IT professionals overtime and portability.
@@ShenandoahShelty I am not talking about teaching yourself on the job. I am talking about taking someone with no skills and teaching them the skills on the job and not making them pay to go to school to learn them. I am not talking about permanently having the person forced to stay.
But employers might not want to go through the time and effort to train someone that doesn't even have the basic skills for the job without a guarantee they will stay there for enough time to be worth the effort.
In some states, if you are given an offer by a competitor that pays more than your current job, the company that is enforcing the non-compete agreement has to pay the difference. It can even bee the full salary if you are between jobs. This has come up for a couple of jobs I have had that were in a specific industry where trade secrets were very common.
While I agree that non-competes do sometimes make sense, I think it would make a much better market overall if all non-competes were outlawed. Yes there would be downsides, but I think those would be outweighed by the benefits of a much more competitive market.
But is the NCA reasonable on its scope? Did I receive special training or trade secrets as a result of my relationship with the business? Did I earn a license and obtain industry training at my own expense or did the business pay for that? Are they saying I can’t EVER compete against them, or is there a reasonable time frame - like 6, 12 or 24 months after leaving the business? Am I restricted from working in this county or does the NCA say I can’t work ANYWHERE in my state - even if the business has no operations elsewhere?
But then some businesses simply require NCA’s - even if unreasonable - to dissuade competition altogether among their people.
Teachers/educators are having to sign non compete contracts(ncc) and are stuck in untenable situations in failing/dangerous districts. Also, I read where hospitals are upping their NCC game to keep nurses in non-unionized systems. Both teachers and nurses can also lose their education grants if they leave before a given time period.
Lee Iacocca might have been the highest-profile case of success that could, hypothetically, have been limited by a noncompete clause.
When I worked in event security s few years ago, it was common practice for guards to work for their company's direct competitors. Everyone signed a non compete clause upon hiring, but, lots of guards basically ignored it. I worked one event where two event security companies were not only staffing the same event, their campsites were right next to each other. One day I saw one guard from the company I was working for at the time literally drag their tent and belongings over to our competitor's camp site. I'm guessing that our competitor was paying their guards better
I think this will be better for employees overall. I commissioned a multipurpose 3d model for roughly $1600, but halfway through it's creation the modeler was hired to do cgi modeling for the she-hulk series and she had to sign a non-compete agreement which meant she couldn't finish the model I commissioned until a year after she was done working with marvel. Ended up being refunded a little less than half and being given a 3d base (The sum of her work on my commission) that I had to hire another person to finish and ended up costing me more than what the original modeler quoted.
A 3D modeler that cannot 3D model for 1 year after leaving the company? That is malicious.
@@mf-- She's apparently getting paid somewhere in the six digit range for her work on the series so I can't blame her taking the money. She couldn't say exactly how much but it was a low multiple of how much she usually makes in a year.
I think that generally a noncompete agreement in employment should carry with it severance pay appropriate to the time one cannot work in the same field. If they don’t want you working in your field of greatest expertise it’s only appropriate to be compensated for not working.
Years ago the company I work for wanted me to sign one that said I would not work in the field for 5 years or something stupid like that. I told them my college degree is where I learned how to do this not from you guys and I will not sign anything of the sort. I would sign a non disclosure agreement so I am legally bound not to steal your clients but I refuse to sign an NDR that would make me unemployable for 5 years. I never heard a thing after that so apparently it wasn't a requirement.
In a discussion elsewhere about this yesterday, a medical doctor in the discussion said that this will hit the hospitals heavily. According to him, hospitals require their specialists in many specialties to sign non compete agreements in an attempt to keep the doctor's patients from following them to other hospitals.
For example, oncologists would be required to sign a non compete agreement while radiologists would generally not be required since patients aren't normally going to follow the radiologist when he changes jobs.
This explains why a medical specialist I know has always moved to a different city when changing jobs.
This explains why I lost my last family doctor. She moved to another city, and now I know WHY. 😭
I am in the computer repair business. If I hire a trained pro, and they want to leave, it is MY JOB to make an offer that keeps them or let them go. If I TRAIN THEM to repair computers, THAT is when I want a non-compete clause. I will not foot the bill for someone's training, just to have them quit when they feel they know enough, and start a competing business against me. I usually do them more about distance. You cannot work for a competitor or start your own shop within surrounding counties of, or in my county for 3 years minimum. As long as you go 2 counties away, have at it! :)
These agreements can go sideways in ways never imagined when signed. A long time equipment rental equipment company sold out to a national chain and signed a non compete. They then went bankrupt (or at least the local franchise did) and he did not get paid. So, he opened another rental company and the lawsuits began. The courts ruled against the original owner who now could not collect his payment and could not compete.
I signed one for my previous job, and I think I did for my current one. Left the previous one to go work for a competitor. I was told it happens all the time (I knew others that did during my time there) and they don't really pursue legal action against you unless maybe you were in some high level executive position.
When I worked at a pizza restaurant in Oklahoma delivering they made me sign a document saying I couldn’t work for another pizza/Italian restaurant for 5years and I wasn’t allowed to tell anyone about how they made the food (company secrets). So I was stuck working at that restaurant as a driver for almost 9 years because the job market in the town I lived was so small and consisted of mostly Italian or pizza restaurants.
That was best offer you got? If nobody signs these contracts, there would not be such contracts.
The not telling how they make food is understandable the rest isn't
@@mikapeltokorpi7671 Yes, but it seems to be an area where human nature is just to sign what people ask you to sign. I've surprised a few employers by not signing such agreements without changes (which they are often too busy to follow-up on, so it never gets signed). Once I had a consulting job but had to switch agencies as I was running up against an 18-month corporate limit. I approached a new company with the job in hand and asked if I could work through them and they still tried to get me to sign a non-compete. I couldn't get them to agree, so I found yet another company to work through.
But avoiding non-competes is hard to do in a lot of cases when most of the other job seekers just blindly sign anything that an employer puts in front of them.
gov realized that $300B taxable income is on the table....
This story hits home for me. When I worked at Motorola, they would frequently come out with new protection policies. These are new policies that are designed to protect the company from being sued by employees. Anyways, they would tell all the employees that you must sign this agreement or you will be fired. These new policies usually come around each time the company lost a major court case and had to pay big $$$$$. Motorola was a major abuser of communities and employees. It is no wonder that they were being sued many times. I was witness to many of these abuses.
My mom lives in Pahrump, Nevada. The city has two wineries now. But they had one and it got sold. In the agreement the seller agreed not to open up another winery for 5 years I believe it was. Now, this was about 15 years ago now. The seller opened up a winery since then.
1-6-23
It's the first thing in well over a decade that I've heard coming from the government that isn't marching us straight into a dystopian corporate hegemony. I welcome the idea with open arms and hope greatly it gains traction and becomes law.
Now, had they not gutted the right to repair legislation in New York, things would be heading in the right direction.
This is exactly what most non-americans think when they look at america.
Your corporations have so much power over the government due to lobbying/election contributions.
Its basically legalised corruption. How anyone thinks 'at will work' is a sensible rule is frankly beyond me.
@@M167A1 anyone who's driven out by this didn't have a good enough buisness idea in the first place and need to learn from their errors and try again.
Cry me a river Karen.
Excellent and important points here! - Regardless of which party people might choose to vote for 🖖🏻 🇺🇸 🇫🇮
It's about time! These contracts are anti-competitive and anti-worker. That is, they are bad from both left and right wing view points. Of course, as Steve pointed out there ae a few exceptions where they make sense, but reasonable carve outs that protect the rights of all parties should not be hard to come up with.
I understand for higher level employees but like Steve said there are fast food chains doing this to minimum wage employees.
Correction they are bad for everyone. Even his example only goes to protect a poor performing company and helps prevent healthy competition and growth and supports defrauding customers by deception. The whole issue of mega corps buying up family businesses and skin walking as small business owners....how can anyone support that as a moral person?
I worked at a major burger chain when I was a kid that had me sign one of these. They treated their people like garbage. I had it, left and got a job for another major burger chain. I was 18, it was not worth their while to do anything to me.
This needs to pass! I hope we get a swift followup on this story
@@M167A1 cOsT OF bUsINeSs
Employers should compete for workers like we have to compete for job openings, boo hoo
in my youth i worked at two difference business that had me sign something similiar. one was a pizza place. i signed that i would not work at another pizza place, nor tell anyone how pizzas are made, for a number of years after the end of my employment. the other was as a guide, saying i would not guide for a year after end the end of employment. FYI
Doubt it will actually happen, but very rarely are non-competes truly relevant. It’s usually only to make it harder for an employee to leave and keep wages down.