In reply to Aggie Jurist

Aggie Jurist said:

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Quote:

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Question: Is that NDA supported by separate consideration?

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Depends on the jurisdiction. In some continued employment is adequate, in others - simply being given access to the data to be protected is adequate, in many - if part of an offer of employment, consideration is sufficient.

In our case, participation in a bonus plan or stock plan was the consideration.

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Thanks. I have been out of the biz for awhile and the rules changed a bit, apparently. Back in the heady days with huge signing bonuses, if they were not broken out separately there were tax implications that made it more complicated. Personal services versus salary and perks.

In reply to Central Committee

Central Committee said:

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Neither the FTC nor any other governmental agency has any business making laws like this, nor should the federal government insert itself in private employer-employee relationships.

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Exactly, states already have their own statutory law and case law on the subject.

From what I read in an article on the subject about forty years ago, courts tend to be resistant to the idea of leaving employees unable to practice their profession and will generally place limits on the applicability of the contracts in both how long the former employee may be stopped from competing and in how extensive the area that they may be enjoined from competing.

If I remember correctly, the article also said that the real problem is not the employee but the new employer who will often pass on a job candidate rather than face addition legal expenses that might be required if hiring them.

Another thing that it said is something that I have never seen elsewhere -- that a non-compete agreement has to be part of the hiring process, not something imposed later unless there is reasonable consideration provided in exchange for signing the agreement and that continuing to hold the job does not count as reasonable consideration.

The reason I remember that part strongly is that at the time, a so-called lawyer who was the senior vice president of the companyr where I worked in R&D and in Software Development was threatening to require me to sign a non-compete agreement. I say "so-called lawyer" because even though he graduated from law school, he was never able to pass the bar and has never worked as a lawyer. In the end, though, the president of the company assured me that he trusted me enough that I would never be required to sign a non-compete agreement there.

In reply to tysker

tysker said:

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Quote:

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FTC estimates 18 percent of the U.S. workforce is covered by noncompete agreements around 30 million people.

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18% doesn't seem like much, and it's likely limited to a higher-skilled workforce.

The government's desire to get 40 million uninsured workers insurance benefits brought us Obamacare.

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It was actually about 10 million. The other 30 million was a combination of illegals, people who qualified for Medicaid (and other gov programs) but didn't apply, people who could afford it but chose not to purchase health insurance. Only about 10 million actually needed some help.

We turned an entire industry upside down and drove up costs for everyone for 3% of the population.

In reply to agracer

agracer said:

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Ags4DaWin said:

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aggiehawg said:

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BadMoonRisin said:

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You think it's dumb that companies shouldn't be able to lay you off and also tell you who you can and cant trade your labor with for 6-12 months after you are gone?

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Not how that works. For most layoffs there is a compensation package offered and for higher compensated employees those come with a limited in time and place noncompete.

We saw that when Elon was booting twitter employees with the use of compensation packages.

I sold my business in the mid 2000s, part of the deal with separate compensation designated therefor was geographically restricted and time restricted noncompete. They were buying my company as a going concern but if I were free to set up shop and take my long term customers with me, that going concern value would be diminished, considerably if I took enough of them with me.

But had I wanted to move to Houston or Dallas and set up shop, that was allowed as therewould be no direct competition. There is a value in noncompetes for both sides.

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That's different for someone selling their business versus a laborer wanting to market their skills.

I agree with noncompetes on the one, vehemently oppose them for the other.

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Non competes I don't believe are enforceable if you're laid off. And they're mostly non enforceable for anyone below the senior executive levels. A non compete for your regular Joe are almost unenforceable per a few lawyers I've talked with.

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That pretty much agrees with what I have read in the past.

One thing that I read was that if you really want to look into the laws on the non-compete agreements, just going by the statutes are far from sufficient -- you really have to be knowledgeable about the case law in your state to know what provisions are valid and which are invalid.

My impression is that most non-compete agreements below a pretty high level or more to intimidate the employee and not to be enforced in court -- that whatever limited valuable information they might have is not going to stay all that valuable for long.

In reply to Ag00Ag

Ag00Ag said:

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No i think you're reading it wright. I just think that's makes it even worse.

Another example of the rule applies to one group of people but not others.

Say you're an engineer and you build a business around developing some new process. After 20 years you sell the business and sign a non-compete. Now you can never work on that process or for any company that has anything to do with that process again. The company you sold to, hires a bight young engineer who works on the process for 5 years and learns all about it. He quits and starts his own business on based on teaching that process to other companies. A process that he would never have otherwise learned had the company that hired him had not exposed it to him. He now sells the knowledge he's learned because you can't enforce a non-compete against an employee but you can't work because you can enforce a non-compete against anyone who sold a business.

In my case, my employee is free to take advantage of using my investment and goodwill to build a following and then open up next door and try to take clients from my business, but if I sell my practice to them, I can't do the same. They can enforce a non-compete against me, but I can't enforce a non-compete against them.

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Wouldn't that come more under trade secrets?

In reply to Ag00Ag

Ag00Ag said:

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No i think you're reading it wright. I just think that's makes it even worse.

Another example of the rule applies to one group of people but not others.

Say you're an engineer and you build a business around developing some new process. After 20 years you sell the business and sign a non-compete. Now you can never work on that process or for any company that has anything to do with that process again. The company you sold to, hires a bight young engineer who works on the process for 5 years and learns all about it. He quits and starts his own business on based on teaching that process to other companies. A process that he would never have otherwise learned had the company that hired him had not exposed it to him. He now sells the knowledge he's learned because you can't enforce a non-compete against an employee but you can't work because you can enforce a non-compete against anyone who sold a business.

In my case, my employee is free to take advantage of using my investment and goodwill to build a following and then open up next door and try to take clients from my business, but if I sell my practice to them, I can't do the same. They can enforce a non-compete against me, but I can't enforce a non-compete against them.

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I think here the business sale price will obviously be influenced by the nature of the non-compete.

A whole lot of what if hypotheticals to justify anti-competitive practices.

Obviously a business sale by a business owner is a lot different than a former employee opening a business of their own.

If you sell the practice to them, they're literally buying the business from you. If you open up shop and take the business and customers back to your new business, then that seems like you scammed them in the sale. So yeah it does make sense that it would be more enforceable in the sale of a business, the business was literally bought so not taking it back is a part of the implied agreement.

If they open up a competing business and "steal" your business, maybe you should improve things. Why are customers leaving?

Generally, consumers shouldn't be forbidden from doing business with who they see fit.

In reply to bmks270

bmks270 said:

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Ag00Ag said:

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No i think you're reading it wright. I just think that's makes it even worse.

Another example of the rule applies to one group of people but not others.

Say you're an engineer and you build a business around developing some new process. After 20 years you sell the business and sign a non-compete. Now you can never work on that process or for any company that has anything to do with that process again. The company you sold to, hires a bight young engineer who works on the process for 5 years and learns all about it. He quits and starts his own business on based on teaching that process to other companies. A process that he would never have otherwise learned had the company that hired him had not exposed it to him. He now sells the knowledge he's learned because you can't enforce a non-compete against an employee but you can't work because you can enforce a non-compete against anyone who sold a business.

In my case, my employee is free to take advantage of using my investment and goodwill to build a following and then open up next door and try to take clients from my business, but if I sell my practice to them, I can't do the same. They can enforce a non-compete against me, but I can't enforce a non-compete against them.

---

I think here the business sale price will obviously be influenced by the nature of the non-compete.

A whole lot of what if hypotheticals to justify anti-competitive practices.

Obviously a business sale by a business owner is a lot different than a former employee opening a business of their own.

If you sell the practice to them, they're literally buying the business from you. If you open up shop and take the business and customers back to your new business, then that seems like you scammed them in the sale. So yeah it doesn't make sense that it would be more enforceable in the sale of a business.

If they open up a competing business and "steal" your business, maybe you should improve things. Why are customers leaving?

Generally, consumers shouldn't be forbidden from doing business with who they see fit.

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Agree. But that is not the point of the proposed FTC rule.

This is an interesting subject in medicine, especially with physicians who don't have a patient base, so called capacity physicians - anesthesiology, radiology, emergency medicine, etc.

These people aren't taking patients with them to a new practice. There are no trade secrets to take to another practice.

The biggest impact is not necessarily going to be the hospitals, but in the private equity owned practices that provide services to those hospitals, where the physician works in Big Hospital A, but receives a paycheck from National Provider B.

Some of these private equity physician firms are so big that if you want to leave them, it's difficult to find another job that isn't in proximity of their other locations. Or, a hospital is forced to continue contracting with National Provider B, because none of the physicians currently working in the hospital could move to either the new practice group they want to bring in, or the hospital itself.

There was an instance of this just recently in Colorado, where a national group had the anesthesiology services at all hospitals in a region, such that it created a monopoly.
https://www.denverpost.com/2024/02/26/colorado-usap-settlement-us-anesthesiology-partners-antitrust-monopoly/

It went to the state level, and Colorado used anti-trust tactics to break it up. These same tactics were used in Texas by the same group, and has led to a FTC lawsuit (which will be interesting to see the outcome of).

For physicians who DO have a recurring patient base, it's going to require some new ideas to prevent patients leaving with them. Maybe a tiered five year plan where the physician has to pay X amount for each year remaining if they leave. Or something else that isn't a non-compete, but provides some amount of protection to a physician owned clinic who helped that person get started.

In reply to bmks270

bmks270 said:

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Ag00Ag said:

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No i think you're reading it wright. I just think that's makes it even worse.

Another example of the rule applies to one group of people but not others.

Say you're an engineer and you build a business around developing some new process. After 20 years you sell the business and sign a non-compete. Now you can never work on that process or for any company that has anything to do with that process again. The company you sold to, hires a bight young engineer who works on the process for 5 years and learns all about it. He quits and starts his own business on based on teaching that process to other companies. A process that he would never have otherwise learned had the company that hired him had not exposed it to him. He now sells the knowledge he's learned because you can't enforce a non-compete against an employee but you can't work because you can enforce a non-compete against anyone who sold a business.

In my case, my employee is free to take advantage of using my investment and goodwill to build a following and then open up next door and try to take clients from my business, but if I sell my practice to them, I can't do the same. They can enforce a non-compete against me, but I can't enforce a non-compete against them.

---

I think here the business sale price will obviously be influenced by the nature of the non-compete.

A whole lot of what if hypotheticals to justify anti-competitive practices.

Obviously a business sale by a business owner is a lot different than a former employee opening a business of their own.

If you sell the practice to them, they're literally buying the business from you. If you open up shop and take the business and customers back to your new business, then that seems like you scammed them in the sale. So yeah it doesn't make sense that it would be more enforceable in the sale of a business.

If they open up a competing business and "steal" your business, maybe you should improve things. Why are customers leaving?

Generally, consumers shouldn't be forbidden from doing business with who they see fit.

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If they buy my practice and then I'm able to get my clients back, maybe they should improve things. after all, as you said, customers shouldn't be forbidden from doing business with who they see fit.

If they came to work for me and realized it would be easier to open up next door or in the same area rather than to move 5 miles down the road, that seems like their scamming me.

In reply to Ag00Ag

Ag00Ag said:

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bmks270 said:

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Ag00Ag said:

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No i think you're reading it wright. I just think that's makes it even worse.

Another example of the rule applies to one group of people but not others.

Say you're an engineer and you build a business around developing some new process. After 20 years you sell the business and sign a non-compete. Now you can never work on that process or for any company that has anything to do with that process again. The company you sold to, hires a bight young engineer who works on the process for 5 years and learns all about it. He quits and starts his own business on based on teaching that process to other companies. A process that he would never have otherwise learned had the company that hired him had not exposed it to him. He now sells the knowledge he's learned because you can't enforce a non-compete against an employee but you can't work because you can enforce a non-compete against anyone who sold a business.

In my case, my employee is free to take advantage of using my investment and goodwill to build a following and then open up next door and try to take clients from my business, but if I sell my practice to them, I can't do the same. They can enforce a non-compete against me, but I can't enforce a non-compete against them.

---

I think here the business sale price will obviously be influenced by the nature of the non-compete.

A whole lot of what if hypotheticals to justify anti-competitive practices.

Obviously a business sale by a business owner is a lot different than a former employee opening a business of their own.

If you sell the practice to them, they're literally buying the business from you. If you open up shop and take the business and customers back to your new business, then that seems like you scammed them in the sale. So yeah it doesn't make sense that it would be more enforceable in the sale of a business.

If they open up a competing business and "steal" your business, maybe you should improve things. Why are customers leaving?

Generally, consumers shouldn't be forbidden from doing business with who they see fit.

---

If they buy my practice and I'm able to get my clients back, maybe they should improve things.

If they came to work for me and realized it would be easier to open up next door or in the same area than to move 5 miles down the road, that seems like their scamming me.

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So you can handcuff ur employees to prevent them from negotiating for their labor in a free market but people buying ur business in good faith get zero protection from u screwing them?

Wow....I sure want to be your client.

Very ethical of you

In reply to docaggie

docaggie said:

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This is an interesting subject in medicine, especially with physicians who don't have a patient base, so called capacity physicians - anesthesiology, radiology, emergency medicine, etc.

These people aren't taking patients with them to a new practice. There are no trade secrets to take to another practice.

The biggest impact is not necessarily going to be the hospitals, but in the private equity owned practices that provide services to those hospitals, where the physician works in Big Hospital A, but receives a paycheck from National Provider B.

Some of these private equity physician firms are so big that if you want to leave them, it's difficult to find another job that isn't in proximity of their other locations. Or, a hospital is forced to continue contracting with National Provider B, because none of the physicians currently working in the hospital could move to either the new practice group they want to bring in, or the hospital itself.

There was an instance of this just recently in Colorado, where a national group had the anesthesiology services at all hospitals in a region, such that it created a monopoly.
https://www.denverpost.com/2024/02/26/colorado-usap-settlement-us-anesthesiology-partners-antitrust-monopoly/

It went to the state level, and Colorado used anti-trust tactics to break it up. These same tactics were used in Texas by the same group, and has led to a FTC lawsuit (which will be interesting to see the outcome of).

For physicians who DO have a recurring patient base, it's going to require some new ideas to prevent patients leaving with them. Maybe a tiered five year plan where the physician has to pay X amount for each year remaining if they leave. Or something else that isn't a non-compete, but provides some amount of protection to a physician owned clinic who helped that person get started.

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Perfect example of "free market" business being anti-competitive.

One practice I've seen is non-competes preventing an employee at a supplier from joining the customer, but all this does is let the supplier continue to pay lower wages and benefits (which being cheap sometimes might be their only edge). I think non-competes should be banned or severely limited because I think they result in wage suppression by restricting the free competition for labor.

In reply to Ag00Ag

Ag00Ag said:

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No i think you're reading it wright. I just think that's makes it even worse.

Another example of the rule applies to one group of people but not others.

Say you're an engineer and you build a business around developing some new process. After 20 years you sell the business and sign a non-compete. Now you can never work on that process or for any company that has anything to do with that process again. The company you sold to, hires a bight young engineer who works on the process for 5 years and learns all about it. He quits and starts his own business on based on teaching that process to other companies. A process that he would never have otherwise learned had the company that hired him had not exposed it to him. He now sells the knowledge he's learned because you can't enforce a non-compete against an employee but you can't work because you can enforce a non-compete against anyone who sold a business.

In my case, my employee is free to take advantage of using my investment and goodwill to build a following and then open up next door and try to take clients from my business, but if I sell my practice to them, I can't do the same. They can enforce a non-compete against me, but I can't enforce a non-compete against them.

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In the example of the engineer, it should gall under trade secret protection and be subject to an NDA.

If that engineer uses that process as the basis to develop a better process after they leave then it shouldn't be prevented and that is what drives innovation.

In the example of patients-

Your practice is not the reason that provider built good will with that patient.

Your practice benefitted from a good provider developing goodwill and was compensated by that patient agreeing to be provided services at your practice.

Your business has already been compensated and is in no way entitled to further business from that client if your business can't legitimately earn it.

If a good employee is the only reason clients are walking in your door then you have a **** business model and should work hard to retain that employee who is responsible for generating ur revenue.

If you can't do that then you deserve to go out of business.

In reply to AgGrad99

AgGrad99 said:

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I see both sides of this.

As an employer, I dont want an employee taking my trade secrets to a competitor, without a reasonable time to protect myself. And training costs are ridiculously high, before an employer typically sees a return on their investment. So you train, expose your trade secrets, and then get your best employees immediately poached without any recourse?

I understand the argument from an employee, who simply wants to use a skill they've acquired (especially if they've been laid off).

But there has to be some sort of protection for the employer, for the myriad of situations where it's not that simple

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My view is that if you laid them off, you should not be able to get a non-compete. You essentially MADE them leave after gaining that knowledge and training.

But, if they QUIT, I could see enforcing one...why should the employee get to take all that knowledge and training and leave without paying it back?

In reply to aggiehawg

aggiehawg said:

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BadMoonRisin said:

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You think it's dumb that companies shouldn't be able to lay you off and also tell you who you can and cant trade your labor with for 6-12 months after you are gone?

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Not how that works. For most layoffs there is a compensation package offered and for higher compensated employees those come with a limited in time and place noncompete.

We saw that when Elon was booting twitter employees with the use of compensation packages.

I sold my business in the mid 2000s, part of the deal with separate compensation designated therefor was geographically restricted and time restricted noncompete. They were buying my company as a going concern but if I were free to set up shop and take my long term customers with me, that going concern value would be diminished, considerably if I took enough of them with me.

But had I wanted to move to Houston or Dallas and set up shop, that was allowed as therewould be no direct competition. There is a value in noncompetes for both sides.

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That's a fair example. I think that as the owner who sold a business that might fall under the exception for senior executives. I will also say that if people were granted additional compensation in exchange for a non-compete then it should continue to be enforced.

I get your point, and it's valid. I view this more as a way to stop companies from trapping employees. The risk of litigation is enough to stop some people from violating a non-compete, even one that's completely unenforceable.

I also think the idea that a law can nullify contracts is complete BS. Even the formation of the US and the signing and ratification of the Constitution didn't nullify existing contracts.

In reply to Ags4DaWin

Ags4DaWin said:

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Ag00Ag said:

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bmks270 said:

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Ag00Ag said:

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No i think you're reading it wright. I just think that's makes it even worse.

Another example of the rule applies to one group of people but not others.

Say you're an engineer and you build a business around developing some new process. After 20 years you sell the business and sign a non-compete. Now you can never work on that process or for any company that has anything to do with that process again. The company you sold to, hires a bight young engineer who works on the process for 5 years and learns all about it. He quits and starts his own business on based on teaching that process to other companies. A process that he would never have otherwise learned had the company that hired him had not exposed it to him. He now sells the knowledge he's learned because you can't enforce a non-compete against an employee but you can't work because you can enforce a non-compete against anyone who sold a business.

In my case, my employee is free to take advantage of using my investment and goodwill to build a following and then open up next door and try to take clients from my business, but if I sell my practice to them, I can't do the same. They can enforce a non-compete against me, but I can't enforce a non-compete against them.

---

I think here the business sale price will obviously be influenced by the nature of the non-compete.

A whole lot of what if hypotheticals to justify anti-competitive practices.

Obviously a business sale by a business owner is a lot different than a former employee opening a business of their own.

If you sell the practice to them, they're literally buying the business from you. If you open up shop and take the business and customers back to your new business, then that seems like you scammed them in the sale. So yeah it doesn't make sense that it would be more enforceable in the sale of a business.

If they open up a competing business and "steal" your business, maybe you should improve things. Why are customers leaving?

Generally, consumers shouldn't be forbidden from doing business with who they see fit.

---

If they buy my practice and I'm able to get my clients back, maybe they should improve things.

If they came to work for me and realized it would be easier to open up next door or in the same area than to move 5 miles down the road, that seems like their scamming me.

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So you can handcuff ur employees to prevent them from negotiating for their labor in a free market but people buying ur business in good faith get zero protection from u screwing them?

Wow....I sure want to be your client.

Very ethical of you

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So someone that buys my business can handcuff me from marketing my labor in a free market but I get zero protection from being screwed by an employee I hire in good faith?

Wow...You would want to be my client if you wanted the best service and best medical care for your pet...it's why I own a very successful, rapidly growing 5 DVM practice!

Very unethical of you commie

In reply to kyledr04

kyledr04 said:

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If someone is important enough to your business, you should pay them and treat them well enough not leave. If not, you deserve to get beat by your competitors instead of holding someone hostage.

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What a simpleton's mindset. You're exactly who I was talking about.

In reply to Ag00Ag

Ag00Ag said:

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Ags4DaWin said:

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Ag00Ag said:

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bmks270 said:

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Ag00Ag said:

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No i think you're reading it wright. I just think that's makes it even worse.

Another example of the rule applies to one group of people but not others.

Say you're an engineer and you build a business around developing some new process. After 20 years you sell the business and sign a non-compete. Now you can never work on that process or for any company that has anything to do with that process again. The company you sold to, hires a bight young engineer who works on the process for 5 years and learns all about it. He quits and starts his own business on based on teaching that process to other companies. A process that he would never have otherwise learned had the company that hired him had not exposed it to him. He now sells the knowledge he's learned because you can't enforce a non-compete against an employee but you can't work because you can enforce a non-compete against anyone who sold a business.

In my case, my employee is free to take advantage of using my investment and goodwill to build a following and then open up next door and try to take clients from my business, but if I sell my practice to them, I can't do the same. They can enforce a non-compete against me, but I can't enforce a non-compete against them.

---

I think here the business sale price will obviously be influenced by the nature of the non-compete.

A whole lot of what if hypotheticals to justify anti-competitive practices.

Obviously a business sale by a business owner is a lot different than a former employee opening a business of their own.

If you sell the practice to them, they're literally buying the business from you. If you open up shop and take the business and customers back to your new business, then that seems like you scammed them in the sale. So yeah it doesn't make sense that it would be more enforceable in the sale of a business.

If they open up a competing business and "steal" your business, maybe you should improve things. Why are customers leaving?

Generally, consumers shouldn't be forbidden from doing business with who they see fit.

---

If they buy my practice and I'm able to get my clients back, maybe they should improve things.

If they came to work for me and realized it would be easier to open up next door or in the same area than to move 5 miles down the road, that seems like their scamming me.

---

So you can handcuff ur employees to prevent them from negotiating for their labor in a free market but people buying ur business in good faith get zero protection from u screwing them?

Wow....I sure want to be your client.

Very ethical of you

---

So someone that buys my business can handcuff me from marketing my labor in a free market but I get zero protection from being screwed by an employee I hire in good faith?

Wow...You would want to be my client if you wanted the best service and best medical care for your pet...it's why I own a very successful, rapidly growing 5 DVM practice!

Very unethical of you commie

---

You sold the business, if you want to keep it, don't sell it?

When you sell a car, you don't get to drive away with it.

WOW!

I honestly did not think this topic would result in such a dichotomy between people who work and those who own businesses and practices.

The bottomline here is the FTC is not empowered to enact this rule. Simply unconstitutional.

Noncompetes have been around for decades. Case law have narrowed those down to geography and time limits and the business community has adapted to those rules and choose which employees they want to invest their time and money to develop for their future business prospects. Remove that investment incentive?

Why do it? Just raid someone else's employees. Cheaper and shorter time frame, right? And no one has any loyalty to the companies who spent that money to develop their skils and knowledge.

In reply to bmks270

In reply to Ag00Ag

Ag00Ag said:

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Ags4DaWin said:

---

Ag00Ag said:

---

bmks270 said:

---

Ag00Ag said:

---

No i think you're reading it wright. I just think that's makes it even worse.

Another example of the rule applies to one group of people but not others.

Say you're an engineer and you build a business around developing some new process. After 20 years you sell the business and sign a non-compete. Now you can never work on that process or for any company that has anything to do with that process again. The company you sold to, hires a bight young engineer who works on the process for 5 years and learns all about it. He quits and starts his own business on based on teaching that process to other companies. A process that he would never have otherwise learned had the company that hired him had not exposed it to him. He now sells the knowledge he's learned because you can't enforce a non-compete against an employee but you can't work because you can enforce a non-compete against anyone who sold a business.

In my case, my employee is free to take advantage of using my investment and goodwill to build a following and then open up next door and try to take clients from my business, but if I sell my practice to them, I can't do the same. They can enforce a non-compete against me, but I can't enforce a non-compete against them.

---

I think here the business sale price will obviously be influenced by the nature of the non-compete.

A whole lot of what if hypotheticals to justify anti-competitive practices.

Obviously a business sale by a business owner is a lot different than a former employee opening a business of their own.

If you sell the practice to them, they're literally buying the business from you. If you open up shop and take the business and customers back to your new business, then that seems like you scammed them in the sale. So yeah it doesn't make sense that it would be more enforceable in the sale of a business.

If they open up a competing business and "steal" your business, maybe you should improve things. Why are customers leaving?

Generally, consumers shouldn't be forbidden from doing business with who they see fit.

---

If they buy my practice and I'm able to get my clients back, maybe they should improve things.

If they came to work for me and realized it would be easier to open up next door or in the same area than to move 5 miles down the road, that seems like their scamming me.

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So you can handcuff ur employees to prevent them from negotiating for their labor in a free market but people buying ur business in good faith get zero protection from u screwing them?

Wow....I sure want to be your client.

Very ethical of you

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So someone that buys my business can handcuff me from marketing my labor in a free market but I get zero protection from being screwed by an employee I hire in good faith?

Wow...You would want to be my client if you wanted the best service and best medical care for your pet...it's why I own a very successful, rapidly growing 5 DVM practice!

Very unethical of you commie

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See bmks' reply for everything that is wrong with ur analogy.

I would never want to be your client.

No i would never do business with you. I don't put people or animals i care about under the care unethical and shady individuals. You show every sign of being a narcissist who only cares about himself....

saying that ur okay screwing over other people who would do business with u in good faith while preventing employees from being able to market themselves and improve their job situation.

In reply to aggiehawg

aggiehawg said:

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WOW!

I honestly did not think this topic would result in such a dichotomy between people who work and those who own businesses and practices.

The bottomline here is the FTC is not empowered to enact this rule. Simply unconstitutional.

Noncompetes have been around for decades. Case law have narrowed those down to geography and time limits and the business community has adapted to those rules and choose which employees they want to invest their time and money to develop for their future business prospects. Remove that investment incentive?

Why do it? Just raid someone else's employees. Cheaper and shorter time frame, right? And no one has any loyalty to the companies who spent that money to develop their skils and knowledge.

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And at the same time companies have lost all semblance of loyalty to their employees.

It is now a two way street.

If companies don't like it then they should work at reversing the trend of over hiring and layoff cycles to pad their quarterly statements and provide loyalty and vestments incentives to talent they want to retain instead of implementing onerous and restrictive "industry standards" that conspire to prevent employees from marketing their skills.

And at a time where inflation has far outpaced wages anything that gives workers the chance to better their job prospects and force companies to improve the wage situation is a good thing.

Separate post because this is most relevant to the discussion and something dame hawg brought up.

Hawg argued that these restrictions are needed to protect a company's investment in an employee and encourage investing in training and developing an employee's job skills.

The argument for entry level jobs and against higher minimum wages that many supposed free market enthusiasts on this board tout is that these entry level jobs help people get their foot in the door, obtain job skills that they can then use to market themselves better and improve their situation.

So which is it?

If one of the purposes of an entry level job is to help people acquire important job skills to help them market themselves better and improve their job situation then the very idea of noncompetes defeats that because after acquiring those marketable skills those employees are prevented contractually from marketing those skills by the noncompete.

Oops

There are better and more ethical ways to obtain talent.

We see it done at the c-suite level all the time.

Pensions, vesting schedules for retirement matches, stock options, etc are all good ways for someone's to retain talent and protect their investment in a good employee.

Companies that do these things would not have to worry about losing talent.

If you don't care to provide long term incentives to keep employees on then that is on the company.

Loyalty goes both ways.

In reply to Jack Boyette

Jack Boyette said:

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kyledr04 said:

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If someone is important enough to your business, you should pay them and treat them well enough not leave. If not, you deserve to get beat by your competitors instead of holding someone hostage.

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What a simpleton's mindset. You're exactly who I was talking about.

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My CEO must be a simpleton. Our comp plan is at the top of our industry, I have significant long term incentives, and our company culture is the best I've ever worked for. I have a director level position and don't have a non-compete because you'd need to back up a Brinks truck to get me to to look elsewhere. I don't support the government involvement in this one, but if non-competes didn't exist, businesses would adapt

In reply to aggiehawg

aggiehawg said:

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WOW!

I honestly did not think this topic would result in such a dichotomy between people who work and those who own businesses and practices.

The bottomline here is the FTC is not empowered to enact this rule. Simply unconstitutional.

Noncompetes have been around for decades. Case law have narrowed those down to geography and time limits and the business community has adapted to those rules and choose which employees they want to invest their time and money to develop for their future business prospects. Remove that investment incentive?

Why do it? Just raid someone else's employees. Cheaper and shorter time frame, right? And no one has any loyalty to the companies who spent that money to develop their skils and knowledge.

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I think that you, BMX, and I went down this path on the thread and then what happened otherwise was akin to the street fight that breaks out in Anchorman.

The whole point was to point out what a completely ridiculous overreach this is by the feds/FTC. Just commie level big govt BS. And it shows you just how drunk on power the left has become.

As for NDA's and non competes, unless you are truly executive level and/or hands on with very proprietary data, it's really kind of a joke and everyone that doesn't have their head up their ass knows it.

I've been under multiple NDA's in my career and to the best of my recollection, two non competes. The first was with my first employer out of A&M and frankly, I don't fault them one bit for making me execute it. They put us through a 12-15 month management program where you were absolutely immersed in internal process, procedure, and most importantly, pricing both to our vendors and customers. It was global logistics and picking off a young grad with a year of that info under their belt would be really valuable to the maybe 5-6 real competitors at that time.

Sometimes they absolutely make sense. Sometimes they are silly. Regardless, it's not the govts role to dictate.

In reply to aggiehawg

aggiehawg said:

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WOW!

I honestly did not think this topic would result in such a dichotomy between people who work and those who own businesses and practices.

The bottomline here is the FTC is not empowered to enact this rule. Simply unconstitutional.

Noncompetes have been around for decades. Case law have narrowed those down to geography and time limits and the business community has adapted to those rules and choose which employees they want to invest their time and money to develop for their future business prospects. Remove that investment incentive?

Why do it? Just raid someone else's employees. Cheaper and shorter time frame, right? And no one has any loyalty to the companies who spent that money to develop their skils and knowledge.

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First of all, I think that the issue should be up to the states. I am curious about the argument that it is unconstitutional for the federal government to do it. The only grounds I can think of would be because it is not a power granted to the federal government by the Constitution.

Second, I have worked for a number of employers, but any training by them was minimal. Anything particular to those employers that I learned was picked up on the job without any special training.

Only one of those employers has ever required a non-compete agreement and I never made any effort to violate it.

The one secret that might have required the non-compete agreement was mainly because of trade secrets that I picked up from day to day. The biggest trade secret they had was something that nobody rational would want to use. On the other hand, I can see that they would not have wonted the competition to know their approach.

In reply to Ags4DaWin "Your practice is not the reason that provider built good will with that patient."

well...yes, my staff and facilities played a major role in that associates ability to create goodwill with that client. Or do you think they would have created the same goodwill standing by themselves on the street corner charging for medical advice?

"Your practice benefitted from a good provider developing goodwill and was compensated by that patient agreeing to be provided services at your practice."

And the associates were compensated fairly as well for the role they played under agreed upon terms of employment that included a non-compete of 5 miles for 1 year after leaving.

"Your business has already been compensated and is in no way entitled to further business from that client if your business can't legitimately earn it."

In my industry, a client retention rate of 88% is considered near perfect (the average dog lives 12.5 years, 1/12 = 8%, ~4% of people move) My client retention rate over the last 4 years is 93%. And that's retention of existing clients. New client growth over the last 4 years is around 23%. I think I'm doing something right. And a big part of that is constantly mentoring my associates and staff how to provide the absolute best care and best client service. But I can already tell you have never run a business and likely never lead a team.

"If a good employee is the only reason clients are walking in your door then you have a **** business model and should work hard to retain that employee who is responsible for generating ur revenue."

But "a" good employee isn't the only reason clients are walking in my door. A team of good employees that work in a culture that I have developed and fostered over nearly 16 years are the reason clients are walking in my door. I have a great business model. In fact I have, by invitation and request, given lectures and participated in panel discussions on my business model, particularly oriented on taking care of you associates and staff first. Make no mistake...I have NEVER had an associate leave and violate their non-compete.

"If you can't do that then you deserve to go out of business."

I can and do do that. I'm at no risk of going out of business...even if one of my associates did violate their non-compete and open up close by. They might get a few clients but not going to put me out of business. I own my real estate and building outright and my business to debt ratio is now such that I could lose 70% of revenue and still be fine. I'd have to lay some people off but I'd be fine. I enjoyed solo practice...a lot less headaches. I could do it again. I'd have a lot of extra space now but I'd find something to do with it. But then, I wouldn't get the enjoyment of mentoring all the young doctors that are hoping to come work here. I host 5 to 7 students per year for externships because of the reputation and culture I have developed. But thanks for your advice and concern about the well being of my business.

That doesn't change the fact that banning non-competes across the board will hurt business owners, increase their risk and thus ultimately hurt employees as business owner will have less incentive to grow, take risk, and expand.


But that's the part that you're upset about isn't it? I've been fortunate enough that through 24+ years of hard work, 50-60 hour work weeks for much of it, significant financial risk, and enormous sacrifice, I've been able to enjoy some success. You want to skip that part. The hard work. The risk. You want it to be given to you.

In reply to Ags4DaWin

Ags4DaWin said:

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Ag00Ag said:

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Ags4DaWin said:

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Ag00Ag said:

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bmks270 said:

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Ag00Ag said:

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No i think you're reading it wright. I just think that's makes it even worse.

Another example of the rule applies to one group of people but not others.

Say you're an engineer and you build a business around developing some new process. After 20 years you sell the business and sign a non-compete. Now you can never work on that process or for any company that has anything to do with that process again. The company you sold to, hires a bight young engineer who works on the process for 5 years and learns all about it. He quits and starts his own business on based on teaching that process to other companies. A process that he would never have otherwise learned had the company that hired him had not exposed it to him. He now sells the knowledge he's learned because you can't enforce a non-compete against an employee but you can't work because you can enforce a non-compete against anyone who sold a business.

In my case, my employee is free to take advantage of using my investment and goodwill to build a following and then open up next door and try to take clients from my business, but if I sell my practice to them, I can't do the same. They can enforce a non-compete against me, but I can't enforce a non-compete against them.

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I think here the business sale price will obviously be influenced by the nature of the non-compete.

A whole lot of what if hypotheticals to justify anti-competitive practices.

Obviously a business sale by a business owner is a lot different than a former employee opening a business of their own.

If you sell the practice to them, they're literally buying the business from you. If you open up shop and take the business and customers back to your new business, then that seems like you scammed them in the sale. So yeah it doesn't make sense that it would be more enforceable in the sale of a business.

If they open up a competing business and "steal" your business, maybe you should improve things. Why are customers leaving?

Generally, consumers shouldn't be forbidden from doing business with who they see fit.

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If they buy my practice and I'm able to get my clients back, maybe they should improve things.

If they came to work for me and realized it would be easier to open up next door or in the same area than to move 5 miles down the road, that seems like their scamming me.

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So you can handcuff ur employees to prevent them from negotiating for their labor in a free market but people buying ur business in good faith get zero protection from u screwing them?

Wow....I sure want to be your client.

Very ethical of you

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So someone that buys my business can handcuff me from marketing my labor in a free market but I get zero protection from being screwed by an employee I hire in good faith?

Wow...You would want to be my client if you wanted the best service and best medical care for your pet...it's why I own a very successful, rapidly growing 5 DVM practice!

Very unethical of you commie

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See bmks' reply for everything that is wrong with ur analogy.

I would never want to be your client.

No i would never do business with you. I don't put people or animals i care about under the care unethical and shady individuals. You show every sign of being a narcissist who only cares about himself....

saying that ur okay screwing over other people who would do business with u in good faith while preventing employees from being able to market themselves and improve their job situation.

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I have never screwed over anyone. I have already stated I pay my associates very well.

You seem to think that if someone doesn't give you everything you want without wanting something in return that they're screwing you over.

You want to come into my business and likely make more money, have more personal time, and more autonomy than you would have in 90% of the other options out their, then you have to agree that if you leave, you won't open a competing business with in 5 miles in the first year after you leave. That's what you say is me screwing people over, That's unethical?

You're too ignorant and naive to continue with.

In reply to Ag00Ag Dude you're killing it, stop wasting time on them. Good on you.

I've literally been LOL'ing on this thread over some of the comments. It's clear that many posting believe that "fair compensation" literally means whatever the employee decides is "fair compensation".

I've been out of the big corp world now for about three years outside some consulting on the side. But in my "small business" world I have had a couple of employees/contractors literally demand that they should be compensated at some percentage of my revenue just because they happened to be standing there when that revenue was realized.

The entitlement is amazing. In two of my three small businesses, absolutely no one but me has skin in the game. It's my money, my investment, my liability, my risk. You get X to work for me. If X is not enough, make your case as to why. We can either work it out or we can't. It's that simple. Anything less is letting the party with no risk run the show.

Is what it is. Glad to hear you have a successful vet clinic. And as you noted, we have been loyal to our vet clinic for 12+ years and it's not the actual vets, it's the staff. And clearly the vets are compensating the staff well based on their longevity and attentiveness.

Totally for this.

Companies use Severance packages as ways to throw people out (their right to do so) and at the same time try to handcuff them. Nah… you don't want someone, you release them, your power over them is done.

One of my great friends got severanced after 20+ years. Got a nice package but had hands tied behind back. Being a middle-aged white male it is his expertise that he relies on for a job. So who is interested in him - his former company's competitors. Who he was prohibited from working for.

I am biased for my buddy, but he is convinced he got severanced bc he didn't look like his new bosses - who come from one demographic and seem to have gone to charm school. So if they are going to F people over (or truly make business decisions) they should take the risk of the consequences of their actions.

Shouldn't most of these agreements have a set time period? Or geographic location? For sellers/senior executives, they may be longer but the comp should justify it.

I have signed non-solicitation documents multiple times. If I leave my job, I'm not allowed to call clients or current employees for one year. In my industry (finance), I've seen the employee part of it litigated more than the client. Company's are trying to protect from someone poaching not just clients but other key employees. The time period of one year is re-upped with my annual bonus payment.

If I were to leave, the company would have a year to try and establish deeper relationships with my clients and my employees. I'm compensated fairly for that.

Lot of hand wringing by those in the medical field. I'd be interested to get a chime in or two from some other industries and positions subject to these non-competes.

As an aside, I work in sales, and am currently under a 2 year non-compete with a former employer.

I also recently sold my business and am under a 5 year non-compete with solicitation of former customers.

In my current situation, this rule could benefit me significantly if I were to compromise my ethics on the agreements that have previously made. With that said, I think the FTC has no right to govern this, nor do I intend to violate my agreements.

I do agree that non-compete agreements should always include some sort of compensation provisions for their durations, and that businesses I've dealt with have leveraged that very unfairly to the worker.

Usually both sides of this argument present unlikely anecdotal extremes that rarely of ever occur. They have a purpose, with narrow and specific constraints, and should be allowed to continue as voluntary contractual agreements, but with very limited and clearly defined scopes.

In reply to AgGrad99

AgGrad99 said:

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I see both sides of this.

As an employer, I dont want an employee taking my trade secrets to a competitor, without a reasonable time to protect myself. And training costs are ridiculously high, before an employer typically sees a return on their investment. So you train, expose your trade secrets, and then get your best employees immediately poached without any recourse?

I understand the argument from an employee, who simply wants to use a skill they've acquired (especially if they've been laid off).

But there has to be some sort of protection for the employer, for the myriad of situations where it's not that simple

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Employers don't train people anymore. I have not seen any formal training program in my career at all. Everything is basically "figure it out" or "we don't want to hire inexperienced people".

Training programs haven't existed for a long time so that argument doesn't work anymore.

In reply to BMX Bandit

BMX Bandit said:

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put aside pros/cons of a non-competition agreement.

Does anyone here think it's right for Feds to ban them? That's what this gets down to.

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Yes, this is an example of government actually improving the overall situation. Noncompetes are anti capitalist and now companies won't be able to hold the sword of Damocles over someone's head.

In reply to Nanomachines son That's a very liberal sentiment to think government making something overall better is a basis for federal action.

The argument it is anti-capitalist to let people contractually agree to things is absurd.

One cannot possibly consider themselves to be a conservative or believe in the constitution, if they think the federal government has the power to ban non-competition agreements.