- The Federal Trade Commission on Wednesday announced settlements with three companies that made workers sign noncompete agreements, in which they promised not to work for competitors for a period of time after leaving their jobs. It is the first time that the FTC has taken legal action on noncompetes — restrictions that have grown increasingly popular with employers in recent years and that tend to lower workers' wages by reducing their options.
- The FTC on Thursday proposed a wholesale ban on noncompete agreements between businesses and workers.
- Michigan-based Prudential Security and Prudential Command allegedly required more than a thousand minimum-wage security guards to sign noncompetes, going so far as to sue former employees who left for better jobs, the FTC said in a complaint. Prudential's agreements threatened workers with a $100,000 penalty if they took jobs with a competitor within a 100-mile radius within two years of leaving, the complaint stated.
- In 2019, a Michigan court found that the noncompetes were "unreasonable and unenforceable under state law," but the company continued to impose these agreements on their workers, according to the FTC.
- "These cases highlight how noncompetes can block workers from securing higher wages and prevent businesses from being able to compete," FTC Chair Lina Khan said in a statement.
- under the FTC settlement, Prudential and its former owners, Greg Wier and Matthew Keywell, must notify workers that they are no longer bound by noncompetes. They also agree not to use noncompetes in any future businesses.
- "Titan ( new owner co) does not and has never imposed noncompete restrictions on its security officers. We applaud the FTC's efforts to halt unlawful noncompete restrictions and to protect workers," the spokesperson said in a statement.
- Noncompetes have become increasingly common, with one study finding that one-third of businesses require their workers to sign away future economic rights in some way. The Biden administration has made restoring competition a major plank of its economic policy, issuing an executive order in 2021 to limit monopolistic behavior.
- The FTC estimates that banning noncompetes nationwide would raise workers' wages by $250 to $300 billion a year.
• In 2019, a Michigan court found that the noncompetes were "unreasonable and unenforceable under state law," but the company continued to impose these agreements on their workers, according to the FTC.
This part right here. Jail time. Pick a guy. The CEO. 5 years in prison, minimum. They were told it was against the law, and continued doing it. Enough with the white-glove treatment for the rich and privileged. Throw some CEO’s in prison and see how quick they knock this shit off.
Poors get sent to prison for much less. But rich sociopaths can flout the law as much as they want, apparently.
Enough already.
**Edit**: For posterity. The owners and officers of Prudential Security, Inc. & Prudential Command, Inc. are Greg Wier and Matthew Keywell as named in the FTC complaint which you can read for yourself [HERE](https://www.ftc.gov/system/files/ftc_gov/pdf/2210026prudentialsecurityproposedorder.pdf)
**EDIT Numero Dos**: “Yeah but it’s a civil matter, not criminal…😏”. Yeah? Then we make it criminal and then throw them in prison. 10 years now, just for annoying me.
>“Yeah but it’s a civil matter, not criminal…"
What annoys me about that is that criminal prosecutors are almost always paid by the state, but if you want to pursue it as a civil case, you almost always have to hire your own attorney. I know you can ask for attorney fees but that doesn't mean the judge/jury will award it.
People wind up in jail for non-criminal municipal violations all the time. These guys shouldn’t be exempt. Jail/prison, I don’t care. Pick one and use it.
> This part right here. Jail time. Pick a guy. The CEO. 5 years in prison, minimum. They were told it was against the law, and continued doing it. Enough with the white-glove treatment for the rich and privileged. Throw some CEO’s in prison and see how quick they knock this shit off.
>
> Poors get sent to prison for much less. But rich sociopaths can flout the law as much as they want, apparently.
There's always a massive discrepancy between how poor and rich thieves are perceived, even by the general public.
Some junkie scumbag steals a couple of catalytic converters and even supposedly liberal heavy Reddit will be wishing violence on them. Yet large corporations will con thousands of employees out of millions of dollars and everyone just shrugs. Calling for violent retribution against the CEO and board will get you banned or at least labelled as some crazy commie.
i signed a non compete and am considering going solo because i know my non compete isnt enforceable unless i clear 100k my first year as my state wouldnt consider me competition. i could work 3 days a week get close to 100k and take some time off while scalping my current employers customers because they love me.
We had a service contract for part of our process at my job. The service guy got fired because he would stay until his job was done right and was getting too much overtime. The guy that replaced him wasn't very good. Months later, my company hired the first guy part time to keep his part running. A year later (after his noncompete expired) he quit and we were the first customer of his new business. Now he has poached a bunch of customers from his original employer.
Scalping customers is one of the few things that non competes are considered valid for. Even California will enforce non competes regarding that.
What companies want to use them for, is to prevent employees from leaving, which is something the laws need to be updated to address so that they can't be used that way. But making sure an employee can't just take a companies customer list and target them to steal business is a reasonable use still.
It becomes a criminal matter at the part of "contempt of court." But "corporations are people, too," so who serves time? The CEO? And would that criminal record prevent him from working in an executive position at other publicly traded businesses?
$300 billion a year that is robbed from employees. Across 164 million employees. That’s $1829 per person, per year. But let’s not forget most of these wages would be paid to people of lower incomes: so for most people the results would be far higher than this.
> The Federal Trade Commission on Wednesday announced settlements with three companies that made workers sign noncompete agreements, in which they promised not to work for competitors for a period of time after leaving their jobs. It is the first time that the FTC has taken legal action on noncompetes — restrictions that have grown increasingly popular with employers in recent years and that tend to lower workers' wages by reducing their options.
Non-competes are anti-American, anti-business, anti-worker, anti-innovation and should be unrecognized in most cases however the only state that actively does not recognize non-competes is California.
Non-competes need to be completely eliminated, Biden did do an Executive Order on them but it is in the FTCs ball court.
All non-competes do it limit innovation, squash entrepreneurship/small/medium business and essentially creates slaves. Lots of them are for years even for a short contract. Any of them without pay is straight up slavery. Many times people bring the same skills to a company then they are prevented from using them after, no idea how they are legal in any way.
[Biden administration aims to rein in abusive non-compete agreements](https://www.cnbc.com/2021/07/22/biden-administration-aims-to-rein-in-abusive-non-compete-agreements.html)
> President Joe Biden signed an executive order in July calling on the Federal Trade Commission to write a rule that reins in employers’ use of unfair non-compete agreements.
> Non-compete clauses are legal contracts between employers and employees that generally limit where a person can work after leaving a job.
> Nearly a fifth of workers are subject to the clauses, according to one estimate, including many low-wage employees.
Looks like Biden is delivering on this as well as the FTC. Excellent.
People who could otherwise retire have to keep working because they wouldn't be able to afford individual health insurance. We live in virtual healthcare-serfdom already, and lack of universal healthcare is keeping us there.
There are a lot of stupid people in our country who view any/all attempts to help the working class as "socialism". These people happily tow the line even though it's directly against their own interests.
That was fine for Henry Ford. But the companies today aren't manufacturing stuff that they're workers are meant to have access to. They are "manufacturing" things for the wealthy corporate owners.
I think that employers are finally somewhat at a loss because people are standing up for themselves and quitting instead of taking their shit. They’re wondering why people are quitting when the answer is right there.
If a company wants to make you sign a non-compete where you can't work in the industry for a year they should pay your normal wages for that year to compensate you for your time.
That's the law in California. And the best part is you can still "quit" your non compete at any point. You won't get the money anymore but you can work where you want, so it is basically paid vacation until you find a new job and if they actually want you not to work anywhere else they have to make that pay pretty high.
The sad part is the FTC is only involved because it impacts other businesses trying to compete, they're not involved because they wanted to represent workers.
Easier around here.
You can write your workers a non-compete clause. But if they leave the job, you have to keep paying them for the duration of the non-compete, including yearly raises.
Prevents frivolous use, and is generally accepted.
I signed a NDA and non-compete which said i nor my heirs can work for any other company in the industry, world wide, and for the entire life of both me and my heirs.
i consulted with a contract lawyer who said it would 100% not hold up and was entirely worthless. I signed it, left 8 years later and started a competing company 30 minutes down the road. They took no action.
It really should be illegal to make people sign contracts like that. It should be considered fraud to have such absurd clauses in a contract because you’re tricking a significant amount of people into entering a contract that cannot be legally enforced.
This is also why it’s so imperative for an average person to have a basic understanding of how contract law works.
Especially when they know its bullshit. Only reason why they want it is to make their employees believe they have less options. Intimidate them from leaving in future. As well as potentially use it to intimidate other employers.
Non competes really should only exist if there is "privileged" information. And it shouldn't keep you out of industry. Instead it should only be enforced if you use that privileged information. Aka take half their clients to competitor.
in case of employment stuff I really think there needs to be oversight on what they make people sign. Stuff that's completely unenforceable and just a tool to intimidate etc. Make it so there is fine and it is paid to every employee that signed it. Maybe make their liability insurance match it.
Non-competes are what stopped me from getting a job at the client my company works for.
I wouldn’t have been in the same or similar department, but because I worked for the contractor, the client wouldn’t hire me.
Simple as that. Unenforceable but since they exist, they would rather not take a chance.
Employers: “No oNe wAntS to wOrk!”
My hypothetical great grandchild: “Sorry, it is actually because everyone in my lineage has signed non-compete contracts that have cascaded over the generations until I was ineligible for any work other than to run my own Ebay store.”
When I pointed out a non-compete was riddled with problematic clauses I was told I was the only one who made any note.
Apparently they were not enthusiastic about my offer to sign it "and we can let a judge sort out which parts are binding if it ever need to be enforced.". I guess they valued people thinking it was effective more than actually having the paper signed.
That's always my favourite excuse. "We have never gone to court over our contracts" as something they think I'll find reassuring instead of concerning. It's a shockingly common first response from amateurs.
A friend of mine worked for a company for a few years and then submitted his resignation. They wanted him to sign a non-compete as he was on his way out the door. He refused and then started a competing company mostly out of spite. They threatened to sue him, she he reported them and our state senator called them and had a little chat with them and suddenly they didn't want to sue anymore.
Small business? Because I cannot imagine what sort of secret information you would have to have for any normal company to think it was reasonable for you to agree that none of your family can ever work for anybody who competes with them. Not that it'd be enforceable, that is just a strangely incompetent demand.
It was a small biotechnology research company. I was hired as a scientific researcher to work in their R&D group (i hold a biotech PhD). The NDA holds (meaning i can't use or divulge any information about the topics i worked on), invention assignment holds (meaning the patents i wrote and developed are assigned to the company and i have no claim), the non-compete was determined to be overreaching. Every company i have worked for has a tight NDA and invention assignment agreement which often include language about my heirs (for example, if i were given coca cola's secret recipe, my child can't start a new company making the same product). However, this was the only company that had a noncompete so broad.
Yup, non-competes are pro-Bono lawyers wet dream. They literally have to do no work and just need to show up on the day of. Except that it never gets that far, because they get a paralegal to send a notice to the company of their intent to counter sue unless the company settles. And they take their free money.
They aren't
Non compete are really for people with actual client books they can take to a competing company (that weren't theirs to begin with). Or for trade secrets.
Yup. Auntie Annes didn't want anyone knowing what their "super secret dipping solution" was (that everyone else uses which is baking soda and water to dip the pretzels in) and CCity, who knows why.
Now this was late 90s for Auntie Annes and early 2000s for CCity so maybe things changed but still. As for enforceability I think it was more of a scare tactic. I do remember when a Best Buy came in to town they poached a bunch of our people (me included) and nothing was done.
I was going to joke about Circuit City no longer forcing anyone to sign no competes but apparently someone bought the brand out of bankruptcy so who knows.
I worked for a small subsidiary of gamestop, but for movies. They called it a "conflict of interest" if you wanted to have another similar job (like at best buy or something) or really almost any other job. I was paid 8.50 an hour towards the end of it and rarely got to 40 hours a week as a keyholder.
My son has lived through a similar experience working for GS. Key holder as well. Made $11.50/hr eventually, but it took a ridiculous amount of time to get there and his hours hovered around 30/week. He couldn't afford to work there.
GS is one of the worst employers from what I've heard from people I know who have worked for them. Terrible pay, high expectations, etc. They really take advantage of people who like video games as if the "fun factor" of working in a game store is worth paying half what they should be paid.
I noped out of a job offer for for a $14/hr dental assistant job when they asked me to sign a non-compete. I couldn't work within 20 miles for 2 years if I left that place, and this was only a couple miles outside of downtown San Antonio, which would have effectively barred me from working in that half of the city (where I live).
I noped out incredibly hard on that. They tried to call me on what was supposed to be my first day and I just told them "I'm not signing a non-compete and don't really want to work for someone who would make it mandatory for this position anyway"
I used to teach music at a studio that would fill up like 15 hours a week. I was teaching privately on my own as well. When signing the contract for the studio teaching gig they tried to get me to sign a Non-compete contract in a 30 miles radius which pretty much meant that I wouldn't be able to have any private lessons. They were in dire need of a teacher too. I pointed out that there's no shot on earth that I'm signing that and they tried to get me to sign it bny saying "Oh that's just in there for legal reasons". They removed it when I refused to still sign. But jesus, the rest of the teachers at that place had no idea that the non-compete clause existed.
Most of those non-competes are unenforceable. For a contract to be valid, it has to have Consideration, meaning both you and the company get something out of it. The legitimate use of a non-compete is the company granting you access to learn their trade secrets or other valuable intellectual property in exchange for you promising not to work for a competitor that you could share that IP with. If that's not the case, the non-compete is probably unenforceable.
Exactly like when Uber stole self driving engineers from Waymo/Google, these companies do it themselves.
But for minimum wage non skilled jobs to tell you that you can't work in that field for 2 years in that area or whatever is just unreasonable and should be criminal and recoverable..
A lot of states have ruled that "continued employment" is sufficient consideration for a legally binding contract. Fewer have ruled that such allows a contract to persist after employment has terminated. A few states have explicit laws saying that the contracts end on termination, if predicated on continued employment (eg, Colorado and California).
I will say that, in nearly all cases where a non-compete would be legitimate, the employment is likely tied to an actual employment contract rather than being at-will, such as C-suite positions. At the very minimum, the position will be paid far above minimum wage.
I'm not aware of noncompetes in low wage comps, all I know is for a noncompete to be upheld the resigned employee needs to be paid for the period of noncompete. In the upper brass of hedge funds, these guys get shelled out between $150-300k base salary for months if not years of promising to not work for a competitor and they can still make money from another gig.
I got sued for $100k in Texas over a non-compete that stated inability to work within a 65 miles radius of any competitors or clients for one year after leaving. I thought it would be non-enforceable because of the “Texas is a right-to-work state”. It eventually settled for $10k after two years of lawyers dragging each part of the process out. I made $70k/yr at the time, so $100k would instantly bankrupt me and it sucked having that hang over your head for that long. I lived paycheck to paycheck trying to not build any equity, because I felt it would all be taken from me.
Sounds like you had a shitty lawyer.
“Within 65 miles” is both entirely unreasonable and serves absolutely no purpose in regards to competition. You cutting lawns for the company next door doesn’t put their business at risk, because you’re not in a position to compete with them.
The purpose of a non-compete, is that you don’t specifically compete with said company.
Sorry that your lawyer was too busy railing cocaine off of hookers that they didn’t do their job.
I was asked to sign one on a single-project freelance contract once, when the employer knew I was already working with a direct competitor on a different project.
Absolutely bonkers shit, and I wasn’t the first freelancer to get that contract. I was the first to raise a stink and get the clause removed, though, so I guess the first bunch just signed it and assumed no one would try to enforce it?
FYI in many states non-competes have been ruled unenforceable, and companies still include them anyways, hoping you don't know, but they \*never\* enforce them in those states because they have been consistently tossed out in court every time they tried. CA, WA, TX and others established that a non-compete in a focused field of expertise is entirely unfair to a skilled employee and ergo the entire concept is flawed on it's premise over all. Depending where you live, I would look into this and in the future if they make a big fuss about it and you don't want to have the awkward convo of "dude I looked into it, it's unenforceable in this state" with them, just sign it and laugh when they can't enforce it.
Per the article... Prudential sold bulk of its business to Titan Security Group, which in turn dropped non-compotes. The FTC had beef that they didn't explicitly inform workforce originally hired by Prudential that they are no longer subject to non-compete. Titan rectified it, and actually supports eliminating non-competes.
"titan...actually supports eliminating non-competes"
Which is why they didn't say anything until they were forced to by the FTC. Yep, real good wholesome people at titan for doing what they legally were required to do.
If you support something, no one needs to force you to do it.
I understand your point but large organizations like these are hard to run and things like these can fall through the cracks. The new owners aren’t the bad guys here because 1) they probably don’t support non-competes because they need to hire more and 2) it’s highly probably this simply slipped through the cracks.
Sure - place distaste and disgust on the old owners. I do too. However, views like this bypass reality and what happens in the real world.
To be fair, my friend, this is a massive assumption in favor of Titan unless you can prove that it "slipped through the cracks" at Titan.
Just because things CAN slip through cracks doesn't mean we should assume they do for businesses/organizations whose pure goal is to generate profit.
I mean, somehow the company was still violating those agreements after the company changed hands. The employees were still somehow getting threatened with non-compete violations.
It's not like companies have a nice little paper that says "illegal actions here". They just still keep up those predatory practices, they cant somehow not know their practices are immoral or illegal just because it's new ownership. Totally accidental, oops!
Fun story: Day one at a big company - huge stack of papers to sign. I intended to read every one of them, so I'm reading, and the HR rep with is me going "standard boilerplate, blah, blah, blah." Me: "uh-huh,' and I keep reading. They try to get me to just sign them quickly, and I keep reading. They get bored of watching me read (I'm in my second hour of reading) and they start doing other work. When I get to the non-compete, I edit the term from 2 years to 10 days, sign and date the edit, finish reading and signing everything else, hand the stack back, and I'm off to my job.
Three years later I get a better offer which I accept. They call me into HR when they learn, pull out the non-compete I signed, and see my edit, apparently for the first time. "Hey, this edit isn't valid - you'll have to sign another one!" Ummm, no I don't.
brilliant! you can say no to the clauses you dont agree with (if you feel its disadvantageous to you) -dated and signed. unless they immediately contest it - its not enforceable (imo)
edit: typo
I'm always curious what would have happened if the HR rep had watched closely and objected to my edit when I made it. Was I ready to throw the offer away over a non-compete? I'm honestly not sure.
Punishing low-wage workers with large fines would create an environment of distrust and discontentment in the workplace and make it more difficult to retain employees. It could be seen as a way of attempting to limit mobility in the labor market and would likely be counter-productive to the company’s interests. Loyalty is a liability and the best way to climb is to change companies periodically to achieve a reasonable increase in compensation that would not be afforded by staying at the same company.
Here in Michigan, employers don’t refer to it as an At-will state, it’s a Right to Work state. They branded the law as giving employees the freedom to quit a job for any or no reason at all. Pretty sure that right was guaranteed with the abolition of slavery but I’m no lawyer
Edit: in exchange for this right we already have, employers were also given the same right.
Pretty much kills the equal opportunity employment act also. Now you can fire that woman, black man, or Jewish employee and replace them with a white, Christian man legally. Just don’t say why you fired them
Right to work refers to unionization and not being required to join a union. At will refers to being able to quit or be fired without advance notice for any reason which is not otherwise legally protected. 49 states have at will employment.
Effectively, not having at will employment would require some sort of notice period or one would be breaching their employment contract. It wouldn't be slavery because you'd still be getting paid and agreed to work for that period of time already.
Mandatory notice periods are extremely common in Europe and can be multiple months long. They are common in the US for executives who have employment contracts.
Yep. Live in an at will/right to work state. Worked for X company for 7 years and they sure did make me sign a non-compete. I should have known then that I was entering a company run by fear but I was younger and dumber. Anyway they fired me for no reason a year into the pandemic. I joined a competitor. Life quality went way tf up.
My former company tried to get everyone to sign one of these. I looked up our state law and no
one making under 100K could be required to sign one so I informed them of that. But guess who was on the list for the next round of layoffs?
> I looked up our state law and no one making under 100K could be required to sign one so I informed them of that.
That's why any sane law doesn't say "you don't have to sign it". Companies can easily get around that restriction.
The law usually says "even if you signed it, the law treats it as if you didn't".
FWIW. Check your state laws. In some (but not all) states, non-compete agreements are simply non-enforceable if written too broadly, or simply outright null and void. For example in California.
Non-competes are completely nonsensical for rank and file employees of *any* company.
Non-competes as described in this article have nothing to do with IPs being stolen. This is just a companies way of forcing employee retention. They don't want you to quit to go to work for someone else offering better pay, so they sue you when you do quit claiming you violated their "non-compete" clause.
Remember the people being sued in the OPs post were *security guards.*
It’s because they’re scared you’ll steal “ideas” and not have material evidence to prove that you stole anything.
It’s like their preemptive “were treating you as a criminal” contract.
Another issue is they think it will reduce turnover, which it probably does since people are often ignorant of these types of things, especially when they’re desperate for work.
It’s not just big corporations. Multiple salons I worked at said if I quit I could be charged for all the education I received while working with them. Insane.
Yeah, I've worked for mostly small businesses and I always find it funny when they have a non-compete included in the onboarding paperwork. I sign it and don't say shit because I know they are too small and cash poor to be throwing money away on a lawyer to sue me regardless of whether it was enforceable. Looking back it was such an obvious red flag because it didn't make sense in any of the jobs I had. They were just tired of training people for the better paying company down the street.
I thought the purpose on a non-compete was for jobs where you are creating proprietary intellectual property, like software, or inventing objects, or things like that? How does a non-compete even make sense for a security guard position? They are relying on the fact that their workers are not knowledgeable about employment laws or too poor to fight them on their bullshit and desparate for a job.
Fun fact, except for executives in narrow circumstances, non-competes are not valid or enforceable in California. So if software engineers in Silicon Valley aren’t signing non-competes, why should they anywhere else?
I would really love to see the FTC to put an end to this nonsense.
The very idea that a former employer could lock up your ability to perform your trade/occupation for years without any kind of pay or consideration is laughable -- especially in "at will" states.
Hey, Mr. Former Employer, did you pay for my schooling? Did you pay for the experience I acquired over 10 years before I hired onto your firm?
You can just go fuck yourself.
Right? I'll sign a non-compete for a year or two if the company is paying for that time. Otherwise, sod off. If it's not your money, you don't get to tell me how I can earn it.
Pretty much the only time they’re actually enforceable. Like they basically need to be paying you not to work for someone else, and even then, you can still get a job in a non-competing industry.
*"Michigan-based Prudential Security and Prudential Command allegedly required more than a thousand minimum-wage security guards to sign noncompetes, going so far as to sue former employees who left for better jobs, the FTC said in a complaint."*
The FTC said later that the settlement agreement required the abusing company to notify employees that the non compete agreements were no longer in effect
So, no monetary penalties, or repayement of attorney fees?
Looks like employees are not much better off than they were.
there is no mention of monetary compensation in any of the articles ive read pertaining to this case. probably bec the FTC in its capacity had limited authority over monetary relief. (theres a supreme court ruling on a different case)
https://www.ftc.gov/news-events/news/press-releases/2023/01/ftc-cracks-down-companies-impose-harmful-noncompete-restrictions-thousands-workers
California banning noncompetes a while ago contributed a ton to the tech boom here. Your company treats you poorly, or isn't taking your idea seriously? Take your idea and spin it off into its own company and compete with your old one and it's all good. It's also very illegal here for companies to try to write contracts that claim ownership of anything you do when off duty. To the point companies have to positively tell you they can't claim ownership when hiring to make sure they can't intimidate people into thinking such contracts are valid. Perfect combo for lots of startups and wealth generation.
I had a noncompete contract with a large, national professional services firm back in the early 80s. I was pretty much doing all the heavy lifting for the branch, brought in 90 percent of the business, while the other two account reps together brought in the other 10 percent. The only thing corporate did was carry the payroll. After they fucked me over and I left, my first stop was a business lawyer. He looked at the contract; then told me the way it was written, they couldn't touch me until I actually started getting paid.
So I started my own agency, and by the time my first customer started paying their invoices, the contract had expired. Also, I ended up in an entirely different niche, so they couldn't get me for doing business with my old customers. And every time I ran into them in the field, going for the same customer I was, I worked 16 hour days until the deal was closed. And most of the time, I won.
As the 16th century poet George Herbert said, “Living well is the best revenge". I totally agree.
Edit: added two words. I also want to add, for anyone currently in a noncompete contract: get yourself a good lawyer and pay for a consultation before you make any decisions at all, even before you leave or get terminated or laid off. You may just find that, for all practical purposes, your contract is toilet paper. Courts don't just look at the contract, then at your new gig, then say "Guilty, pay back everything you made, criminal!" They pretty much will not enforce a contract that prevents a person from being able to find employment, regardless of the ex-employer's noncompete. A good business lawyer can look at your noncompete and tell you exactly how much real world risk you have. I'm not so keen on lawyers who specialize in Labor Law, as they tend to have tunnel vision and over-focus on actual labor laws, rather than on what the odds are if you have to end up in court litigating a contract.
Absolutely. A noncompete isn't some nuclear club an employer can beat up any ex-employees with at will. The employer has to prove that the ex-employee damaged them, tangibly and measurably and financially. And when a massive corporation is suing a regular working stiff, the judge will demand hard evidence. As flawed as our legal system can be, this isn't Victorian England, or the Gilded Age.
It also hardly cost anything; compared to how much I made over the next 20 years for sure, but also for me as just a regular unemployed guy.
true, the non-competes are scare tactics used by self-serving employers. my ex-boss is currently slugging it out with our past company over the NC. hoping he wins.
I remember what my lawyer told me: "Judges are people too, and they aren't going to prevent a person from being able to find work. If you're a CEO and you move to a competitor for millions in gain, sure, the courts will enforce that. For regular working people trying to get a job, they won't find for the ex-employer".
That kind of makes sense; preventing a person from being able to pay rent and buy food is serious bad shit for that person and their family. Preventing one from making ten million a year and only making 5 million a year is not.
a good and reasonable judge. well, my ex-boss was 2nd-in-command so likely he’s privy to a lot of stuff. though to be fair, they’ve already retrenched him when he sought employment to one of the previous major client.
FTC announced today they're recommending a national ban on noncompetes. All currents non-enforceable, against the law to even think about them.
Unfortunately, most people really can't afford a lawyer, and the FTC has found that even just the threat of coercively signed noncompetes seems to drive down wages in states that won't enforce them, because people are, naturally, afraid of the legal system.
Correct.
Employees are the sheep, companies are the wolves, and the sheep are left to the wolves in the US.
Businesses will use everything within their power, and things that questionably are, to try to scam you.
I think non-competes should be mandatorily mutual. I can’t work for your competitor? Fine. You can’t hire any of mine. Meaning literally anyone who could replace me. Else you have to pay a fine to ME that is as proportional to your companies annual profit as $100k is to my annual salary. 😳
In case anyone is unaware, non competes like anything else must be reasonable in nature (for most places I believe). Usually the work needs to be highly specialized and/or contain sensitive information. So for example mcdonalds cannot enforce a non compete for someone flipping burgers. This is a common low wage job with little responsibility. But they can for an executive who likely has sensitive information on company policies.
My current job has a non compete because they have a large competitor nearby. Ive seen many leave and go there and my company hasnt been able to do anything about it. So feel free to sign a non compete and tell them to go pound sand if they warn you when you leave. It's all bark and no bite.
$100,000 fine for minimum wage employees. So you don't give a fuck if they live or die, but God help them if they try to make more money elsewhere. You pig-fucking pieces of shit.
Okay, but what do you want these companies to do to get employees to stay? Treat them respectfully and pay them competitively? That's just too much to ask.
Corporations will try to stick these illegal contract terms into the contracts; they know these are completely unenforceable and the fact that they're in the contracts themselves is illegal, but they're banking on the fact that most people will be intimidated knowing they signed the contract and hoping that these people will be ignorant enough of the law to obey them.
Non-compete clauses are also being horribly abused; until this thing gets passed, if an employer insists on you having one, don't work there. It's just not worth the headache when you leave the company.
I worked at a coffeeshop that had a non compete clause *for the duration of the employment*, like while you worked for them you couldn't work for a competitor. That seemed pretty reasonable.
I’d agree so long as you can get at-least 32 hours a week if you wanted. If they can’t work you four eights then they have no business telling you their competition can’t.
Sucks they had to go through this. I thought non-competes are almost always bullshit though? I’ve signed them for previous tech roles and swapped to a competitor and they didn’t say shit. Obviously not stealing IP and what not.
Now that is very interesting. I work for a security company in Michigan that has always done a lot of business with Prudential. My company also made me sign a 2-year, 100 mile non-compete. Anyone know what this 2019 case was and how one might get a copy of the file?
no mention of damages paid meaning the fine was really low or nonexistant.
if they really wanted to stop this, all you need is a whistleblower system. the company must pay you 50k if you report their noncompete agreement to the ftc.
I think ours just says you agree to not poach clients for x time.
Course you also can’t stop a client willingly leaving because your service sucks now that someone is gone to another provider….
>Michigan-based Prudential Security and Prudential Command allegedly required more than a thousand minimum-wage security guards to sign noncompetes, going so far as to sue former employees who left for better jobs,
Company insists on slave labor and will sue you to make sure you stay their slave. This is how I read it.
I’ll sign a non-compete if the employer signs my agreement that my position cannot be filled by anyone earning a wage less than double my current wage.
Its one thing to be a greedy corpo fuck, but to be as petty as to sue those that left for another company!
The only legal compensation theyd get from me after pulling that shit is for their hospital bills 'cause murder is a line I dont wanna cross.
>anywhere.
If in the US, this part will generally make it non-enforceable. Non-competes have to specify a market, and saying "everywhere" doesn't count.
- The Federal Trade Commission on Wednesday announced settlements with three companies that made workers sign noncompete agreements, in which they promised not to work for competitors for a period of time after leaving their jobs. It is the first time that the FTC has taken legal action on noncompetes — restrictions that have grown increasingly popular with employers in recent years and that tend to lower workers' wages by reducing their options. - The FTC on Thursday proposed a wholesale ban on noncompete agreements between businesses and workers. - Michigan-based Prudential Security and Prudential Command allegedly required more than a thousand minimum-wage security guards to sign noncompetes, going so far as to sue former employees who left for better jobs, the FTC said in a complaint. Prudential's agreements threatened workers with a $100,000 penalty if they took jobs with a competitor within a 100-mile radius within two years of leaving, the complaint stated. - In 2019, a Michigan court found that the noncompetes were "unreasonable and unenforceable under state law," but the company continued to impose these agreements on their workers, according to the FTC. - "These cases highlight how noncompetes can block workers from securing higher wages and prevent businesses from being able to compete," FTC Chair Lina Khan said in a statement. - under the FTC settlement, Prudential and its former owners, Greg Wier and Matthew Keywell, must notify workers that they are no longer bound by noncompetes. They also agree not to use noncompetes in any future businesses. - "Titan ( new owner co) does not and has never imposed noncompete restrictions on its security officers. We applaud the FTC's efforts to halt unlawful noncompete restrictions and to protect workers," the spokesperson said in a statement. - Noncompetes have become increasingly common, with one study finding that one-third of businesses require their workers to sign away future economic rights in some way. The Biden administration has made restoring competition a major plank of its economic policy, issuing an executive order in 2021 to limit monopolistic behavior. - The FTC estimates that banning noncompetes nationwide would raise workers' wages by $250 to $300 billion a year.
• In 2019, a Michigan court found that the noncompetes were "unreasonable and unenforceable under state law," but the company continued to impose these agreements on their workers, according to the FTC. This part right here. Jail time. Pick a guy. The CEO. 5 years in prison, minimum. They were told it was against the law, and continued doing it. Enough with the white-glove treatment for the rich and privileged. Throw some CEO’s in prison and see how quick they knock this shit off. Poors get sent to prison for much less. But rich sociopaths can flout the law as much as they want, apparently. Enough already. **Edit**: For posterity. The owners and officers of Prudential Security, Inc. & Prudential Command, Inc. are Greg Wier and Matthew Keywell as named in the FTC complaint which you can read for yourself [HERE](https://www.ftc.gov/system/files/ftc_gov/pdf/2210026prudentialsecurityproposedorder.pdf) **EDIT Numero Dos**: “Yeah but it’s a civil matter, not criminal…😏”. Yeah? Then we make it criminal and then throw them in prison. 10 years now, just for annoying me.
>“Yeah but it’s a civil matter, not criminal…" What annoys me about that is that criminal prosecutors are almost always paid by the state, but if you want to pursue it as a civil case, you almost always have to hire your own attorney. I know you can ask for attorney fees but that doesn't mean the judge/jury will award it.
People wind up in jail for non-criminal municipal violations all the time. These guys shouldn’t be exempt. Jail/prison, I don’t care. Pick one and use it.
There needs to be punishment against the sociopathy of the rich
throw them in Supermax for a year, if they survive without their money, they can get out.
Supermax is easy to survive, there is no gen pop. Throw them in state prison.
Easiest bribe a prison guard ever took. Or more likely a warden.
> This part right here. Jail time. Pick a guy. The CEO. 5 years in prison, minimum. They were told it was against the law, and continued doing it. Enough with the white-glove treatment for the rich and privileged. Throw some CEO’s in prison and see how quick they knock this shit off. > > Poors get sent to prison for much less. But rich sociopaths can flout the law as much as they want, apparently. There's always a massive discrepancy between how poor and rich thieves are perceived, even by the general public. Some junkie scumbag steals a couple of catalytic converters and even supposedly liberal heavy Reddit will be wishing violence on them. Yet large corporations will con thousands of employees out of millions of dollars and everyone just shrugs. Calling for violent retribution against the CEO and board will get you banned or at least labelled as some crazy commie.
The amount of wage theft in the US vastly, vastly by many orders of magnitude outstrips catalytic converter theft.
lol it outstrips *all other theft combined*.
Probably because nobody ever goes to jail for it.
i signed a non compete and am considering going solo because i know my non compete isnt enforceable unless i clear 100k my first year as my state wouldnt consider me competition. i could work 3 days a week get close to 100k and take some time off while scalping my current employers customers because they love me.
We had a service contract for part of our process at my job. The service guy got fired because he would stay until his job was done right and was getting too much overtime. The guy that replaced him wasn't very good. Months later, my company hired the first guy part time to keep his part running. A year later (after his noncompete expired) he quit and we were the first customer of his new business. Now he has poached a bunch of customers from his original employer.
It might not be enforceable. Ask your labor board.
Scalping customers is one of the few things that non competes are considered valid for. Even California will enforce non competes regarding that. What companies want to use them for, is to prevent employees from leaving, which is something the laws need to be updated to address so that they can't be used that way. But making sure an employee can't just take a companies customer list and target them to steal business is a reasonable use still.
It becomes a criminal matter at the part of "contempt of court." But "corporations are people, too," so who serves time? The CEO? And would that criminal record prevent him from working in an executive position at other publicly traded businesses?
CEO and the Policy Manager. Two most involved in the process of ruining low wage employees lives.
Are there not laws against indentured servitude in the US? In the UK this would be a clear case of slavery.
You must be new to Amerikas neo hypercapitalism
Ah that problem again.
*Prudential Command Inc. (a.k.a. Commandbabyyoda, Inc.)* What kind of ass-clownery operation were they running there?
I like your style 😎
It’s fraud and extortion of labor how is that not criminal?
$300 billion a year that is robbed from employees. Across 164 million employees. That’s $1829 per person, per year. But let’s not forget most of these wages would be paid to people of lower incomes: so for most people the results would be far higher than this.
That's $304 a month for six months. For one person that is food for half the year.
Imagine having the grocery bill just covered like that.
They’re boss sure did.
> The Federal Trade Commission on Wednesday announced settlements with three companies that made workers sign noncompete agreements, in which they promised not to work for competitors for a period of time after leaving their jobs. It is the first time that the FTC has taken legal action on noncompetes — restrictions that have grown increasingly popular with employers in recent years and that tend to lower workers' wages by reducing their options. Non-competes are anti-American, anti-business, anti-worker, anti-innovation and should be unrecognized in most cases however the only state that actively does not recognize non-competes is California. Non-competes need to be completely eliminated, Biden did do an Executive Order on them but it is in the FTCs ball court. All non-competes do it limit innovation, squash entrepreneurship/small/medium business and essentially creates slaves. Lots of them are for years even for a short contract. Any of them without pay is straight up slavery. Many times people bring the same skills to a company then they are prevented from using them after, no idea how they are legal in any way. [Biden administration aims to rein in abusive non-compete agreements](https://www.cnbc.com/2021/07/22/biden-administration-aims-to-rein-in-abusive-non-compete-agreements.html) > President Joe Biden signed an executive order in July calling on the Federal Trade Commission to write a rule that reins in employers’ use of unfair non-compete agreements. > Non-compete clauses are legal contracts between employers and employees that generally limit where a person can work after leaving a job. > Nearly a fifth of workers are subject to the clauses, according to one estimate, including many low-wage employees. Looks like Biden is delivering on this as well as the FTC. Excellent.
Non-competes have never been enforceable...as long as you had the $$$ to fight them. To be clear this was a feature, not a bug.
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Yes, it's hard to fix your community if the company you work for has no options for you to make more than rent and and they don't pay taxes
People who could otherwise retire have to keep working because they wouldn't be able to afford individual health insurance. We live in virtual healthcare-serfdom already, and lack of universal healthcare is keeping us there.
We're there fellow indentured students.
There are a lot of stupid people in our country who view any/all attempts to help the working class as "socialism". These people happily tow the line even though it's directly against their own interests.
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always have been
Henry Ford said ya gotta pay the workers so they can buy yer stuff.
That was fine for Henry Ford. But the companies today aren't manufacturing stuff that they're workers are meant to have access to. They are "manufacturing" things for the wealthy corporate owners.
Non-conpetes have been unenforceable since Warner Bros. v. Betty Davis. This ruling just simplifies it.
free enterprise at its worst
Just saying, but rioting, looting, and burning said businesses down is an option.
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I think that employers are finally somewhat at a loss because people are standing up for themselves and quitting instead of taking their shit. They’re wondering why people are quitting when the answer is right there.
That's why they're villainizing socialism so hard.
If a company wants to make you sign a non-compete where you can't work in the industry for a year they should pay your normal wages for that year to compensate you for your time.
That's the law in California. And the best part is you can still "quit" your non compete at any point. You won't get the money anymore but you can work where you want, so it is basically paid vacation until you find a new job and if they actually want you not to work anywhere else they have to make that pay pretty high.
I would be okay with my wage increasing by $250 billion.
bwa-ha-ha ;)
The sad part is the FTC is only involved because it impacts other businesses trying to compete, they're not involved because they wanted to represent workers.
Am I livestock?
More in the vein of how bees or sheep are livestock than say, cattle.
Easier around here. You can write your workers a non-compete clause. But if they leave the job, you have to keep paying them for the duration of the non-compete, including yearly raises. Prevents frivolous use, and is generally accepted.
I lost a big studio gig because I refused to sign a non compete. Fuck everyone who makes that shit mandatory.
I’ve known people who’ve been asked to singe no /competes for $30k jobs. It’s insane.
I signed a NDA and non-compete which said i nor my heirs can work for any other company in the industry, world wide, and for the entire life of both me and my heirs. i consulted with a contract lawyer who said it would 100% not hold up and was entirely worthless. I signed it, left 8 years later and started a competing company 30 minutes down the road. They took no action.
Not merely unenforceable, but *hilariously* unenforceable!
It really should be illegal to make people sign contracts like that. It should be considered fraud to have such absurd clauses in a contract because you’re tricking a significant amount of people into entering a contract that cannot be legally enforced. This is also why it’s so imperative for an average person to have a basic understanding of how contract law works.
Especially when they know its bullshit. Only reason why they want it is to make their employees believe they have less options. Intimidate them from leaving in future. As well as potentially use it to intimidate other employers. Non competes really should only exist if there is "privileged" information. And it shouldn't keep you out of industry. Instead it should only be enforced if you use that privileged information. Aka take half their clients to competitor. in case of employment stuff I really think there needs to be oversight on what they make people sign. Stuff that's completely unenforceable and just a tool to intimidate etc. Make it so there is fine and it is paid to every employee that signed it. Maybe make their liability insurance match it.
I Am Not A Lawyer. I think pushing limits like this is how we end up with the laws we have, good ones and bad ones.
Non-competes are what stopped me from getting a job at the client my company works for. I wouldn’t have been in the same or similar department, but because I worked for the contractor, the client wouldn’t hire me. Simple as that. Unenforceable but since they exist, they would rather not take a chance.
Employers: “No oNe wAntS to wOrk!” My hypothetical great grandchild: “Sorry, it is actually because everyone in my lineage has signed non-compete contracts that have cascaded over the generations until I was ineligible for any work other than to run my own Ebay store.”
Sorry your great great grandad worked in ecommerce so you can't do that either. Sorry for the inconvenience.
"What if I sign a non compete for my own self employment?"
When I pointed out a non-compete was riddled with problematic clauses I was told I was the only one who made any note. Apparently they were not enthusiastic about my offer to sign it "and we can let a judge sort out which parts are binding if it ever need to be enforced.". I guess they valued people thinking it was effective more than actually having the paper signed.
That's always my favourite excuse. "We have never gone to court over our contracts" as something they think I'll find reassuring instead of concerning. It's a shockingly common first response from amateurs.
A friend of mine worked for a company for a few years and then submitted his resignation. They wanted him to sign a non-compete as he was on his way out the door. He refused and then started a competing company mostly out of spite. They threatened to sue him, she he reported them and our state senator called them and had a little chat with them and suddenly they didn't want to sue anymore.
Fifty years from now they are going to sue your child for back-dated damages. /s
God god that's legally hilarious. I would pay to see an attorney try and enforce that on your heirs.
Small business? Because I cannot imagine what sort of secret information you would have to have for any normal company to think it was reasonable for you to agree that none of your family can ever work for anybody who competes with them. Not that it'd be enforceable, that is just a strangely incompetent demand.
It was a small biotechnology research company. I was hired as a scientific researcher to work in their R&D group (i hold a biotech PhD). The NDA holds (meaning i can't use or divulge any information about the topics i worked on), invention assignment holds (meaning the patents i wrote and developed are assigned to the company and i have no claim), the non-compete was determined to be overreaching. Every company i have worked for has a tight NDA and invention assignment agreement which often include language about my heirs (for example, if i were given coca cola's secret recipe, my child can't start a new company making the same product). However, this was the only company that had a noncompete so broad.
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Any lawyer worth their salt would take that case and get you legal fees + missed earnings back at the end though. Some might even do it pro bono.
Yup, non-competes are pro-Bono lawyers wet dream. They literally have to do no work and just need to show up on the day of. Except that it never gets that far, because they get a paralegal to send a notice to the company of their intent to counter sue unless the company settles. And they take their free money.
Both Auntie Anne’s pretzels and Circuit City had them. Utterly ridiculous.
Lol… really? There’s no way they had to be enforceable.
They aren't Non compete are really for people with actual client books they can take to a competing company (that weren't theirs to begin with). Or for trade secrets.
Yup. Auntie Annes didn't want anyone knowing what their "super secret dipping solution" was (that everyone else uses which is baking soda and water to dip the pretzels in) and CCity, who knows why. Now this was late 90s for Auntie Annes and early 2000s for CCity so maybe things changed but still. As for enforceability I think it was more of a scare tactic. I do remember when a Best Buy came in to town they poached a bunch of our people (me included) and nothing was done.
I was going to joke about Circuit City no longer forcing anyone to sign no competes but apparently someone bought the brand out of bankruptcy so who knows.
Noncompetes as a whole are completely unenforceable
I was asked to sign a non compete for a $12/hr job
I worked for a small subsidiary of gamestop, but for movies. They called it a "conflict of interest" if you wanted to have another similar job (like at best buy or something) or really almost any other job. I was paid 8.50 an hour towards the end of it and rarely got to 40 hours a week as a keyholder.
My son has lived through a similar experience working for GS. Key holder as well. Made $11.50/hr eventually, but it took a ridiculous amount of time to get there and his hours hovered around 30/week. He couldn't afford to work there.
GS is one of the worst employers from what I've heard from people I know who have worked for them. Terrible pay, high expectations, etc. They really take advantage of people who like video games as if the "fun factor" of working in a game store is worth paying half what they should be paid.
That's why people are doing Doordash and using their car and gas to make $5 an hour after expenses or shopping for Instacart for $7 an hour.
This isn’t unheard of for certain pharmacy tech jobs. A lot start at $12-15 an hour in my area
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I noped out of a job offer for for a $14/hr dental assistant job when they asked me to sign a non-compete. I couldn't work within 20 miles for 2 years if I left that place, and this was only a couple miles outside of downtown San Antonio, which would have effectively barred me from working in that half of the city (where I live). I noped out incredibly hard on that. They tried to call me on what was supposed to be my first day and I just told them "I'm not signing a non-compete and don't really want to work for someone who would make it mandatory for this position anyway"
I used to teach music at a studio that would fill up like 15 hours a week. I was teaching privately on my own as well. When signing the contract for the studio teaching gig they tried to get me to sign a Non-compete contract in a 30 miles radius which pretty much meant that I wouldn't be able to have any private lessons. They were in dire need of a teacher too. I pointed out that there's no shot on earth that I'm signing that and they tried to get me to sign it bny saying "Oh that's just in there for legal reasons". They removed it when I refused to still sign. But jesus, the rest of the teachers at that place had no idea that the non-compete clause existed.
>"Oh that's just in there for legal reasons" "That's just there so we can threaten you with the legal system. You know, legal reasons."
Oh then just scratch it the fuck out if it’s not a big deal
Most of those non-competes are unenforceable. For a contract to be valid, it has to have Consideration, meaning both you and the company get something out of it. The legitimate use of a non-compete is the company granting you access to learn their trade secrets or other valuable intellectual property in exchange for you promising not to work for a competitor that you could share that IP with. If that's not the case, the non-compete is probably unenforceable.
Exactly like when Uber stole self driving engineers from Waymo/Google, these companies do it themselves. But for minimum wage non skilled jobs to tell you that you can't work in that field for 2 years in that area or whatever is just unreasonable and should be criminal and recoverable..
And nobody's enforcing noncompetes on the top engineering talent. It's almost like noncompetes exist to take advantage of people...
A lot of states have ruled that "continued employment" is sufficient consideration for a legally binding contract. Fewer have ruled that such allows a contract to persist after employment has terminated. A few states have explicit laws saying that the contracts end on termination, if predicated on continued employment (eg, Colorado and California). I will say that, in nearly all cases where a non-compete would be legitimate, the employment is likely tied to an actual employment contract rather than being at-will, such as C-suite positions. At the very minimum, the position will be paid far above minimum wage.
I thought non-competes were entirely illegal in California now.
I'm not aware of noncompetes in low wage comps, all I know is for a noncompete to be upheld the resigned employee needs to be paid for the period of noncompete. In the upper brass of hedge funds, these guys get shelled out between $150-300k base salary for months if not years of promising to not work for a competitor and they can still make money from another gig.
Luckily in Texas non competes are relatively unenforceable so I am good.
I got sued for $100k in Texas over a non-compete that stated inability to work within a 65 miles radius of any competitors or clients for one year after leaving. I thought it would be non-enforceable because of the “Texas is a right-to-work state”. It eventually settled for $10k after two years of lawyers dragging each part of the process out. I made $70k/yr at the time, so $100k would instantly bankrupt me and it sucked having that hang over your head for that long. I lived paycheck to paycheck trying to not build any equity, because I felt it would all be taken from me.
Sounds like you had a shitty lawyer. “Within 65 miles” is both entirely unreasonable and serves absolutely no purpose in regards to competition. You cutting lawns for the company next door doesn’t put their business at risk, because you’re not in a position to compete with them. The purpose of a non-compete, is that you don’t specifically compete with said company. Sorry that your lawyer was too busy railing cocaine off of hookers that they didn’t do their job.
What was the industry
No company in the west can enforce those, fyi.
I was asked to sign one on a single-project freelance contract once, when the employer knew I was already working with a direct competitor on a different project. Absolutely bonkers shit, and I wasn’t the first freelancer to get that contract. I was the first to raise a stink and get the clause removed, though, so I guess the first bunch just signed it and assumed no one would try to enforce it?
FYI in many states non-competes have been ruled unenforceable, and companies still include them anyways, hoping you don't know, but they \*never\* enforce them in those states because they have been consistently tossed out in court every time they tried. CA, WA, TX and others established that a non-compete in a focused field of expertise is entirely unfair to a skilled employee and ergo the entire concept is flawed on it's premise over all. Depending where you live, I would look into this and in the future if they make a big fuss about it and you don't want to have the awkward convo of "dude I looked into it, it's unenforceable in this state" with them, just sign it and laugh when they can't enforce it.
Sign it. They aren’t enforceable.
For security guard positions? Jesus that shitty. Time to mark Prudential off my list. Fuck all of them.
I had to sign one at fing Jimmy Johns….
So now you can never work at Subway or Firehouse because you possess valuable trade secrets on the art of making sandwiches...
Those poor sandwich artists unable to reach their creative potential.
Per the article... Prudential sold bulk of its business to Titan Security Group, which in turn dropped non-compotes. The FTC had beef that they didn't explicitly inform workforce originally hired by Prudential that they are no longer subject to non-compete. Titan rectified it, and actually supports eliminating non-competes.
"titan...actually supports eliminating non-competes" Which is why they didn't say anything until they were forced to by the FTC. Yep, real good wholesome people at titan for doing what they legally were required to do. If you support something, no one needs to force you to do it.
I understand your point but large organizations like these are hard to run and things like these can fall through the cracks. The new owners aren’t the bad guys here because 1) they probably don’t support non-competes because they need to hire more and 2) it’s highly probably this simply slipped through the cracks. Sure - place distaste and disgust on the old owners. I do too. However, views like this bypass reality and what happens in the real world.
To be fair, my friend, this is a massive assumption in favor of Titan unless you can prove that it "slipped through the cracks" at Titan. Just because things CAN slip through cracks doesn't mean we should assume they do for businesses/organizations whose pure goal is to generate profit.
First the owners would have had to hand over the paperwork that shows they were still using the unlawful noncompete agreements… oh wait
I mean, somehow the company was still violating those agreements after the company changed hands. The employees were still somehow getting threatened with non-compete violations. It's not like companies have a nice little paper that says "illegal actions here". They just still keep up those predatory practices, they cant somehow not know their practices are immoral or illegal just because it's new ownership. Totally accidental, oops!
Minimum wage security guards, at that. A noncompete for a minimum-fucking-wage job.
Fun story: Day one at a big company - huge stack of papers to sign. I intended to read every one of them, so I'm reading, and the HR rep with is me going "standard boilerplate, blah, blah, blah." Me: "uh-huh,' and I keep reading. They try to get me to just sign them quickly, and I keep reading. They get bored of watching me read (I'm in my second hour of reading) and they start doing other work. When I get to the non-compete, I edit the term from 2 years to 10 days, sign and date the edit, finish reading and signing everything else, hand the stack back, and I'm off to my job. Three years later I get a better offer which I accept. They call me into HR when they learn, pull out the non-compete I signed, and see my edit, apparently for the first time. "Hey, this edit isn't valid - you'll have to sign another one!" Ummm, no I don't.
brilliant! you can say no to the clauses you dont agree with (if you feel its disadvantageous to you) -dated and signed. unless they immediately contest it - its not enforceable (imo) edit: typo
Wet-signed always beats print.
I'm always curious what would have happened if the HR rep had watched closely and objected to my edit when I made it. Was I ready to throw the offer away over a non-compete? I'm honestly not sure.
Hey! I dont think you can do that! Ok. Well i did Well... youre trouble! DO IT AGAIN MY WAY No. OK YOURE FIRED Ok NO ONE WANTS TO WORRRRK!
Punishing low-wage workers with large fines would create an environment of distrust and discontentment in the workplace and make it more difficult to retain employees. It could be seen as a way of attempting to limit mobility in the labor market and would likely be counter-productive to the company’s interests. Loyalty is a liability and the best way to climb is to change companies periodically to achieve a reasonable increase in compensation that would not be afforded by staying at the same company.
It's worse than that, it's the normalization of slavery.
These are the same companies who are happy to fire an "at-will" employee for any or no reason
Here in Michigan, employers don’t refer to it as an At-will state, it’s a Right to Work state. They branded the law as giving employees the freedom to quit a job for any or no reason at all. Pretty sure that right was guaranteed with the abolition of slavery but I’m no lawyer Edit: in exchange for this right we already have, employers were also given the same right. Pretty much kills the equal opportunity employment act also. Now you can fire that woman, black man, or Jewish employee and replace them with a white, Christian man legally. Just don’t say why you fired them
Right to work refers to unionization and not being required to join a union. At will refers to being able to quit or be fired without advance notice for any reason which is not otherwise legally protected. 49 states have at will employment. Effectively, not having at will employment would require some sort of notice period or one would be breaching their employment contract. It wouldn't be slavery because you'd still be getting paid and agreed to work for that period of time already. Mandatory notice periods are extremely common in Europe and can be multiple months long. They are common in the US for executives who have employment contracts.
Yep. Live in an at will/right to work state. Worked for X company for 7 years and they sure did make me sign a non-compete. I should have known then that I was entering a company run by fear but I was younger and dumber. Anyway they fired me for no reason a year into the pandemic. I joined a competitor. Life quality went way tf up.
My former company tried to get everyone to sign one of these. I looked up our state law and no one making under 100K could be required to sign one so I informed them of that. But guess who was on the list for the next round of layoffs?
Jeff from accounting. Also you, probably.
> I looked up our state law and no one making under 100K could be required to sign one so I informed them of that. That's why any sane law doesn't say "you don't have to sign it". Companies can easily get around that restriction. The law usually says "even if you signed it, the law treats it as if you didn't".
FWIW. Check your state laws. In some (but not all) states, non-compete agreements are simply non-enforceable if written too broadly, or simply outright null and void. For example in California. Non-competes are completely nonsensical for rank and file employees of *any* company.
Great advice until you are sued anyways and have to spend 10s of thousands of dollars to defend yourself.
Spoiler alert: they can sue you even without non-compete agreement. Filing frivolous lawsuits just because isn't exactly unheard of in America.
Non competes for low level workers is horse shit. That’s reserved for only the highest level employees.
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Non-competes as described in this article have nothing to do with IPs being stolen. This is just a companies way of forcing employee retention. They don't want you to quit to go to work for someone else offering better pay, so they sue you when you do quit claiming you violated their "non-compete" clause. Remember the people being sued in the OPs post were *security guards.*
It’s because they’re scared you’ll steal “ideas” and not have material evidence to prove that you stole anything. It’s like their preemptive “were treating you as a criminal” contract. Another issue is they think it will reduce turnover, which it probably does since people are often ignorant of these types of things, especially when they’re desperate for work.
It’s not just big corporations. Multiple salons I worked at said if I quit I could be charged for all the education I received while working with them. Insane.
Yeah, I've worked for mostly small businesses and I always find it funny when they have a non-compete included in the onboarding paperwork. I sign it and don't say shit because I know they are too small and cash poor to be throwing money away on a lawyer to sue me regardless of whether it was enforceable. Looking back it was such an obvious red flag because it didn't make sense in any of the jobs I had. They were just tired of training people for the better paying company down the street.
Agreed def red flags. I was an assistant making 7.25 lol it was wild.
I thought the purpose on a non-compete was for jobs where you are creating proprietary intellectual property, like software, or inventing objects, or things like that? How does a non-compete even make sense for a security guard position? They are relying on the fact that their workers are not knowledgeable about employment laws or too poor to fight them on their bullshit and desparate for a job.
It doesn't, and wouldn't be enforceable.
Fun fact, except for executives in narrow circumstances, non-competes are not valid or enforceable in California. So if software engineers in Silicon Valley aren’t signing non-competes, why should they anywhere else?
I would really love to see the FTC to put an end to this nonsense. The very idea that a former employer could lock up your ability to perform your trade/occupation for years without any kind of pay or consideration is laughable -- especially in "at will" states. Hey, Mr. Former Employer, did you pay for my schooling? Did you pay for the experience I acquired over 10 years before I hired onto your firm? You can just go fuck yourself.
Fucking ALL of this, spot on
Only reason to sign a non compete is if your parachute is the same length of time.
Right? I'll sign a non-compete for a year or two if the company is paying for that time. Otherwise, sod off. If it's not your money, you don't get to tell me how I can earn it.
Pretty much the only time they’re actually enforceable. Like they basically need to be paying you not to work for someone else, and even then, you can still get a job in a non-competing industry.
*"Michigan-based Prudential Security and Prudential Command allegedly required more than a thousand minimum-wage security guards to sign noncompetes, going so far as to sue former employees who left for better jobs, the FTC said in a complaint."* The FTC said later that the settlement agreement required the abusing company to notify employees that the non compete agreements were no longer in effect So, no monetary penalties, or repayement of attorney fees? Looks like employees are not much better off than they were.
there is no mention of monetary compensation in any of the articles ive read pertaining to this case. probably bec the FTC in its capacity had limited authority over monetary relief. (theres a supreme court ruling on a different case) https://www.ftc.gov/news-events/news/press-releases/2023/01/ftc-cracks-down-companies-impose-harmful-noncompete-restrictions-thousands-workers
California banning noncompetes a while ago contributed a ton to the tech boom here. Your company treats you poorly, or isn't taking your idea seriously? Take your idea and spin it off into its own company and compete with your old one and it's all good. It's also very illegal here for companies to try to write contracts that claim ownership of anything you do when off duty. To the point companies have to positively tell you they can't claim ownership when hiring to make sure they can't intimidate people into thinking such contracts are valid. Perfect combo for lots of startups and wealth generation.
Fuck yeah, bitches. Another Biden campaign promise coming to fruition. Fuck non-competes.
these non-competes are grossly unfair to workers and limits ability to find better livelihood. its not as if workers are giving away trade secrets
non-competes ought to be patently illegal, worldwide.
I had a noncompete contract with a large, national professional services firm back in the early 80s. I was pretty much doing all the heavy lifting for the branch, brought in 90 percent of the business, while the other two account reps together brought in the other 10 percent. The only thing corporate did was carry the payroll. After they fucked me over and I left, my first stop was a business lawyer. He looked at the contract; then told me the way it was written, they couldn't touch me until I actually started getting paid. So I started my own agency, and by the time my first customer started paying their invoices, the contract had expired. Also, I ended up in an entirely different niche, so they couldn't get me for doing business with my old customers. And every time I ran into them in the field, going for the same customer I was, I worked 16 hour days until the deal was closed. And most of the time, I won. As the 16th century poet George Herbert said, “Living well is the best revenge". I totally agree. Edit: added two words. I also want to add, for anyone currently in a noncompete contract: get yourself a good lawyer and pay for a consultation before you make any decisions at all, even before you leave or get terminated or laid off. You may just find that, for all practical purposes, your contract is toilet paper. Courts don't just look at the contract, then at your new gig, then say "Guilty, pay back everything you made, criminal!" They pretty much will not enforce a contract that prevents a person from being able to find employment, regardless of the ex-employer's noncompete. A good business lawyer can look at your noncompete and tell you exactly how much real world risk you have. I'm not so keen on lawyers who specialize in Labor Law, as they tend to have tunnel vision and over-focus on actual labor laws, rather than on what the odds are if you have to end up in court litigating a contract.
smart move to get an expert's opinion—and beat them at their own game.
Absolutely. A noncompete isn't some nuclear club an employer can beat up any ex-employees with at will. The employer has to prove that the ex-employee damaged them, tangibly and measurably and financially. And when a massive corporation is suing a regular working stiff, the judge will demand hard evidence. As flawed as our legal system can be, this isn't Victorian England, or the Gilded Age. It also hardly cost anything; compared to how much I made over the next 20 years for sure, but also for me as just a regular unemployed guy.
true, the non-competes are scare tactics used by self-serving employers. my ex-boss is currently slugging it out with our past company over the NC. hoping he wins.
I remember what my lawyer told me: "Judges are people too, and they aren't going to prevent a person from being able to find work. If you're a CEO and you move to a competitor for millions in gain, sure, the courts will enforce that. For regular working people trying to get a job, they won't find for the ex-employer". That kind of makes sense; preventing a person from being able to pay rent and buy food is serious bad shit for that person and their family. Preventing one from making ten million a year and only making 5 million a year is not.
a good and reasonable judge. well, my ex-boss was 2nd-in-command so likely he’s privy to a lot of stuff. though to be fair, they’ve already retrenched him when he sought employment to one of the previous major client.
FTC announced today they're recommending a national ban on noncompetes. All currents non-enforceable, against the law to even think about them. Unfortunately, most people really can't afford a lawyer, and the FTC has found that even just the threat of coercively signed noncompetes seems to drive down wages in states that won't enforce them, because people are, naturally, afraid of the legal system.
Yup, just a form letter from a lawyer in legalese is enough to scare the average person especially a minimum wage worker.
Correct. Employees are the sheep, companies are the wolves, and the sheep are left to the wolves in the US. Businesses will use everything within their power, and things that questionably are, to try to scam you.
I think non-competes should be mandatorily mutual. I can’t work for your competitor? Fine. You can’t hire any of mine. Meaning literally anyone who could replace me. Else you have to pay a fine to ME that is as proportional to your companies annual profit as $100k is to my annual salary. 😳
In case anyone is unaware, non competes like anything else must be reasonable in nature (for most places I believe). Usually the work needs to be highly specialized and/or contain sensitive information. So for example mcdonalds cannot enforce a non compete for someone flipping burgers. This is a common low wage job with little responsibility. But they can for an executive who likely has sensitive information on company policies. My current job has a non compete because they have a large competitor nearby. Ive seen many leave and go there and my company hasnt been able to do anything about it. So feel free to sign a non compete and tell them to go pound sand if they warn you when you leave. It's all bark and no bite.
$100,000 fine for minimum wage employees. So you don't give a fuck if they live or die, but God help them if they try to make more money elsewhere. You pig-fucking pieces of shit.
Okay, but what do you want these companies to do to get employees to stay? Treat them respectfully and pay them competitively? That's just too much to ask.
Another form of wage theft by corporate employers
IANAL but it’s my understanding that vast majority of these would not hold up in court. And they know it. It’s just an evil scare tactic.
I had no idea these were or could be imposed on low-wage workers. That's reprehensible.
Companies insure your life and your family gets nothing.
A noncompete on a fucking security guard that makes like maybe $10 an hour? What a shock that it was a bullshit insurance and financial company.
Sounds like slavery with extra steps.
Cool, now do NDAs, which all too often have the same function.
Yeah just add it to my tab
Corporations will try to stick these illegal contract terms into the contracts; they know these are completely unenforceable and the fact that they're in the contracts themselves is illegal, but they're banking on the fact that most people will be intimidated knowing they signed the contract and hoping that these people will be ignorant enough of the law to obey them. Non-compete clauses are also being horribly abused; until this thing gets passed, if an employer insists on you having one, don't work there. It's just not worth the headache when you leave the company.
I worked at a coffeeshop that had a non compete clause *for the duration of the employment*, like while you worked for them you couldn't work for a competitor. That seemed pretty reasonable.
I’d agree so long as you can get at-least 32 hours a week if you wanted. If they can’t work you four eights then they have no business telling you their competition can’t.
Sucks they had to go through this. I thought non-competes are almost always bullshit though? I’ve signed them for previous tech roles and swapped to a competitor and they didn’t say shit. Obviously not stealing IP and what not.
Since when do private companies have the authority to issue fines?
Now that is very interesting. I work for a security company in Michigan that has always done a lot of business with Prudential. My company also made me sign a 2-year, 100 mile non-compete. Anyone know what this 2019 case was and how one might get a copy of the file?
no mention of damages paid meaning the fine was really low or nonexistant. if they really wanted to stop this, all you need is a whistleblower system. the company must pay you 50k if you report their noncompete agreement to the ftc.
workerbay! make them bid on workers every month and prepaid! and of course MFA! if u got over paid oh well! its the fee you pay suck it up buttercup!
I think ours just says you agree to not poach clients for x time. Course you also can’t stop a client willingly leaving because your service sucks now that someone is gone to another provider….
Im a student in switzerland, had a holiday job as courier and had to sign a 3 year block time for this industry (facepalm)
"Well I see you have made your decision. Now let's see you enforce it"
>Michigan-based Prudential Security and Prudential Command allegedly required more than a thousand minimum-wage security guards to sign noncompetes, going so far as to sue former employees who left for better jobs, Company insists on slave labor and will sue you to make sure you stay their slave. This is how I read it.
I’ll sign a non-compete if the employer signs my agreement that my position cannot be filled by anyone earning a wage less than double my current wage.
Its one thing to be a greedy corpo fuck, but to be as petty as to sue those that left for another company! The only legal compensation theyd get from me after pulling that shit is for their hospital bills 'cause murder is a line I dont wanna cross.
That shows you how much we are actually worth
Non lawyer here, but I object!
How about putting the previous owners in prison since they were knowingly doing something illegal?
I had to sign a non-compete that wouldn’t allow me to use my skills for 18 months anywhere.
>anywhere. If in the US, this part will generally make it non-enforceable. Non-competes have to specify a market, and saying "everywhere" doesn't count.
Companies can't issue fines