New York governor vetoes bill that would ban noncompete agreements

MicroWave@lemmy.world to News@lemmy.world – 712 points – New York governor vetoes bill that would ban noncompete agreements
apnews.com

New York’s governor vetoed a bill days before Christmas that would have banned noncompete agreements, which restrict workers’ ability to leave their job for a role with a rival business.

Gov. Kathy Hochul, who said she tried to work with the Legislature on a “reasonable compromise” this year, called the bill “a one-size-fits-all-approach” for New York companies legitimately trying to retain top talent.

“I continue to recognize the urgent need to restrict non-compete agreements for middle-class and low-wage workers, and am open to future legislation that achieves the right balance,” she wrote in a veto letter released Saturday.

The veto is a blow to labor groups, who have long argued that the agreements hurt workers and stifle economic growth. The Federal Trade Commission had also sent a letter to Hochul in November, urging her to sign the bill and saying that the agreements can harm innovation and prevent new businesses from forming in the state.

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Why do these companies never get it? You want to retain talent… you gotta pay to retain that talent.

More accurately, you want your experienced and proprietary-knowledge-laden people to not take that stuff elsewhere…. Gotta pay them what they’re worth.

Can’t keep lowballing the pay raises, and expect people to not shop around,

Sure they can, so long as they can ensure they have a high-placed government stooge or two to ensure they can legally blacklist an employee from the industry if they leave.

He who lives by the free market shall die by the free market

Bingo. Letting people get strong armed into these sorts of "agreements" is a perversion of free markets.

That's the thing though. They don't want to best talent. That is the point. You have to pay for talent. Talent tends to rock the boat and has the power to spark change because the company becomes reliant on them.

Most companies are completely fine paying much less for mediocre workers who will keep their head down and deliver a mediocre product where the execs get a way better profit margin and can perpetuate toxic systems.

Why do these companies never get it? You want to retain talent… you gotta pay to retain that talent.

Oh, no, that fact is exactly what they pull shit like this. They HATE that fact and will pull any underhand tactic to fight back against it. Noncompetes, union busting, collusion, monopoly building, whatever it take to pay their employees the least amount possible.

companies legitimately trying to retain top talent

Basically blacklisting them from their field for a year after leaving your company is not how you retain talent. Pay them better. Give them better health coverage or other benefits. Only being able to retain talent by basically threatening them if they leave is not a good look.

knew a guy who crossed out those bits in the agreement. they HR peeps never noticed until he found a new place to work. (he now works for our company.) It amazes me; how many people fail to realize every contract is unique.

A modification like that is only valid if both parties add their initials next to it to confirm they've seen it...

Nope. You just sign a contract without reading it, that’s on you.

Or did you think them being pushy while you actually read it wasn’t because they never ever try to sneak something in?

To clarify, you can’t add something way out of the pale, like “upon termination of this contract all assets of [whatever corpo] belong to FuglyDuck”… but you can definitely cross out terms you don’t ageee with (for example, the arbitration clause.)

And how exactly do you prove it wasn't crossed after being signed?

If it had to go in front of a judge, there are no initials present to show that both parties were made aware of the change and one party claims that the contract was modified without them being informed then the contract as it was originally written will be considered valid.

I find it hard to believe that I have to explain that you can't modify a written contract without informing the other party and without having a proof that you did in case of a breach...

By the way there's a difference between including clauses on the typed document and manually introducing extra clauses. In the second case the judge would say the same as if information was crossed without informing the other party. The typed version is the original and the one that's valid, without the hand written clauses that got added without the other party putting their initials to confirm they were informed. If extra clauses not previously agreed to by both parties (ex.: working hours agreed to during interview and written in the contract, extra clause saying they're subject to change at the employer's will in the written contract) were in the typed version then they were there from the beginning and it was the responsibility of both parties to be aware of them.

https://www.lawyers.com/legal-info/business-law/business-law-basics/contract-modification.html

In a case where a clause with potential major consequences is modified (like removing a NDA or non compete agreement) it would be advised to reprint the document to remove any form of ambiguity.

And how exactly do you prove it wasn't crossed after being signed?

“Your honor, they crossed it out after it was done! It’s fraud, you’re honor!”

“Uhm. This is your copy?”

“Yes?”

“How did they cross out your copy?”

Yeah, I dunno, it seems that’s the reason both parties keep a copy, huh?

If it had to go in front of a judge, there are no initials present to show that both parties were made aware of the change and one party claims that the contract was modified without them being informed then the contract as it was originally written will be considered valid.

They (or their representatives) have every right to read and review before they sign, just the same as you. If you agree to arbitration “I didn’t agree to that” doesn’t fly. They agree to a contract with it removed is the same.

Anecdotally, I know I guy (he’s a coder,) I’ve worked with around in a few companies now; he “always” crosses out both the non-competes and the arbitrate clauses.

Judge sided with him.

NDA’s are typically their own document/contract rather than part of the employment contract. At least I’ve never seen one that wasn’t it’s own document (and I’m under around 140 NDAs right now…. Most of which aren’t withy employer. Contract security is like thst.)

Sure thing buddy, Imma trust you bro on legal questions instead of using an actual credible source.

That's not how contract law works, mon ami

I dunno. it seems like they do

Technically, altering the document creates a counter offer- the original offer was rejected. If you make a counter offer for employment, and they behave like that offer is accepted, (ie by proceeding with onboarding, sending paychecks and assigning work,) it was accepted. Maybe not everywhere.

I’ve a friend that does this all the time- specifically both arbitration and non compete clauses. Just because they use standardized forms doesn’t mean the contract isn’t unique.

but then, there’s this Russian fellow , so there’s that, too,

Cute how she's being likely being paid under the table by some lobbyists that benefits from said non-compete agreements. And even if not under the table, it's likely under the form of campain contributions, etc. Politics and capitalism mixed together brings the worst in both.

Nobody in their right mind would elect to veto something giving more rights to the working class without having some personal interests on the line.

You have a source for that?

Hence the reason why I chose the likely being paid qualifier.

“I’m just asking questions!”

If you don’t understand the power that words hold then maybe don’t use them with such conviction.

those words described our situation tho. is there some reason people shouldn’t do that? i mean beyond “it’s not true 100% of the time.”

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Here is a source for you.

https://en.wikipedia.org/wiki/Lobbying_in_the_United_States#:~:text=Lobbyists%20are%20intermediaries%20between%20client,and%20state%20and%20local%20governments.

We are a oligarchy

I understand what lobbying is, but thank you for the info. This doesn't relate specifically to this person, though. OP says they are likely taking money and i asked for a reason to suspect this person in particular unless the argument is just "they all do it" in which case it wouldn't be "likely".

Look up likely in the dictionary.

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And this is one of the reasons top tech talent stays in Silicon Valley / San Francisco, and why that area innovates so quickly.

If your company sucks, I’ll work for your competitor.

It's also why wages are so high. You wanna keep your talent? You gotta pay more than the company next door, or have better perks to make up for the wage disparity.

I got poached from AWS because my current team has a full AWS stack, and they wanted someone who knew it inside and out. They offered me a full remote position (whole company is full remote) with a higher salary, but slightly less TC. My new job is also way less stressful and with way more freedom.

They don't have non compete clauses over there?

Nope, CA doesn't recognize non-competes.

Wow, surprising that tech is mostly there then!

It's the employees starting up their own stuff. Non competes have been used as a cudgel to stop competition for decades.

Surprising? It means salaries are high and true talent can get rewarded. Doesn't mean they won't be stupid corp BS factories too, but at least you get paid for your efforts.

No, surprising that the business would establish themselves there if they can't have NDAs non compete clauses.

Non competes, are not NDAs. But even beyond that people should recognize that businesses in the end will go where they must to hire the folks they need to get the job done. They might throw a temper tantrum or two along the way about having to pay people or why can’t they have non compete slaves, or what do you mean you won’t come to the office, but in their own interests of making money they will eventually go where they must.

Well, think about it.

There's a history of innovation in the area, and all its people in the area are supportive of that both in teens of material, financial & knowledge.

Further, the lack of non-compete means lawyers have to provide reasonable evidence of damage by an escaped employee working for a competing firm, versus the much easier "hey! They escaped in a way we don't approve of!"

I think the origins of Hollywood would explain why the companies are there

Want to make $400,000/year without a bachelor’s degree? You can do it in Silicon Valley.

How are contracts like this enforceable in the US? Like here you could have a clause like that but the moment you try to sue someone for working at a competitor the judge would just laugh at you and throw your ass out of court. You can't have just anything in a contract, just like if a contract breaks employment laws then it's not valid.

Most contracts have a severability clause saying if any clause is unenforceable then that clause shall be severed, but the rest stands. This lets companies take some big swings with what they put in there.

It takes time and money and stress for a worker to challenge any terms regardless of their merit. So an invalid contract still keeps you down, just not as strongly as the invalid contract itself claims to be.

They are rarely enforced and when they are it is usually due to some sort of significant financial loss the company suffered. Normally a company is not going to waste time and money taking a cook or cashier to court over quitting a job at McDonald's then going to work Burger King. But a senior software engineer working at Google going to work for Apple could have some real financial implications, so they'd be more likely to pursue legal action against that person. Still kinda bullshit in my mind but I get it.

Yeah but California has already banned non-competes, has for years, and Google and Apple seem to be doing just fine with the financial implications.

Also non-competes are different from NDAs.

There's still protections. Apple just got rocked for stealing the entire dev team from somewhere and just wholesale copying the code. Which is on Apple, not the worker. They could absolutely have taken them for an adjacent project (it was sensors in smart watches) using the same sensors. Or paid a licensing agreement for what was there with a right to improve it.

But a senior software engineer working at Google going to work for Apple could have some real financial implications

No, unless you mean something quite different than that title. A large company will have hundreds or even thousands of senior software engineers, and it’s really not something that should be restricted with non-competes

To be valid, a non-compete should:

  • be subject to contract law, not just imposed
  • include recompense
  • not prevent you from getting a job
  • be narrowly tailored (ie, not prevent someone from working)
  • limited duration
  • can only apply to a few where the impact can be described or quantified: founders, executives, celebrities, top sales people with same customers

They don't have to actually enforce it, they just have to scare you with it. Or better yet, convince you they could enforce it

There are states like California and Colorado that don’t recognize non-competes. Remember it’s a union.

legitimately trying to retain top talent

"Trying to figure out how to pay their talent less"

Thank god for states with half a brain. Non-competes are illegal in my state and not enforceable.

In my country non-compete laws are extremely rational: if you want to enforce such a contract, pay the person what he could make at a competitor during the entire duration you want to prevent him from going to the competition.

It's not up to the State to pay unemployment for people because you don't want talent to go somewhere else. Pay up or STFU.

Idiot employers will still put silly non-compete clauses into their contracts to scare people but I just chuckle as they are unenforceable unless they want to pay me to stay "on the beach".

Related. My previous employer had a b2b non-compete. The clients couldn't hire me. Yes it did end up costing me a job and a lawyer told me it would be very dicey challenging it the way it was written. On the plus side the client went bankrupt a few months back so that would have sucked.

If you want to retain top talent, pay them, give them better working conditions, offer them fulfilment. Don't make it illegal for them to work elsewhere.

We need free markets and deregulation... until it inconvenieniences non-productive shareholders in the slightest or those dirty workers start getting a little uppity.

In California, non-compete agreements are banned unless the company compensates the person subject for the agreement. If the company can impose one for free, why not subject everyone to them?

The funny thing is then the rich companies spends millions on lawyers to say that poached employee's stuff was common knowledge and thereby not an NDA issue or trade secret.

You turn around and say I'm leaving but will say the same stuff that person said to the next employer and they'll sue with the same lawyers.

"It's ok if I do it but not if they do it"

Aren't non competes generally very difficult to enforce? The people I've known that have gotten in trouble with non compete agreements are those in management positions that engaged in very active poaching of their old teams within a specified time frame.

Also, given the nature of remote work and hiring, I kind of have a mixed feeling. What does this kind of state regulation in a VHO/WFH environment do to NY workers in a job market with flexible location? These regulations really should be at the federal level.

If I could just leave my current company and go to a different company that did the same thing it would be good for me if I wanted to move or make more money. The other company would probably not really make that much money.

Non-competes for top tier jobs make sense, as the company invested a lot of money into the person and it wouldn't be fair to have them poached for no cost by a rival. All tech companies make software engineers sign non-competes.

as the company invested a lot of money into the person and it wouldn’t be fair to have them poached for no cost by a rival.

They are employees, not indentured servants.

The financial risk should be on the corporation, and not on the employee. Corporations are the ones that are going to make the most money, between the two.

I'd argue that big tech doesn't invest in its workers because they look for top-tier candidates already. Also, it is way too easy for companies to abuse non-competes. People shouldn't be forced out of their industry because they left a bad employer.

All software engineers do NOT sign non-competes. I've been in the field for 25 years...closest I ever signed was a NDA

So what else was in the bill that got it vetoed? They always hide some egregious nonsense in bills like this so if it gets vetoed they can point the finger and create outrage.

She states it in the article. She believes companies have a "right" to retain high end labor. This bill just straight up bans non compete agreements which would make it harder to retain well trained, experienced, professionals.

That said. Why in the fuck love did we ever decide it was okay to threaten someone's livelihood for leaving a job? I don't care how highly trained you are. Non competes are anti-competitive in nature. They should have never been allowed.