How Non-Compete Clauses Cost Americans $300 Billion A Year 

This.

How so? Nobody is forcing people to sign these contracts?

@@Lomaherp They won't give you a job if you don't sign it. "Just find a different job" is not an option for people who have been searching for months and have only gotten that one offer.

@@Lomaherp Its implied that if you dont sign it when your hired, you will be immediately fired. Why do you think the employer gives it to you?

@Dank Wow. You've never been forced into signing a contract to take a job you needed? That must be nice. Congratulations. 🎊

I guess they cut hair in the opposite direction from other salons or don't use Paul Mitchell products.

Jimmy John's used to also and all they make are sandwiches.

I actually found that one quite reasonable. It was just for a 10 mile radius and just for one year. I can see the point of the salon: if someone explicitely likes that hairdresser they might switch salon of the hairdresser starts working for the salon next door. The salon doesn't prevent the employee from ever finding a job again: 10 miles is probably less than the avarage american commute, and after a year the hairdresser can even work closer to home. 10 miles is just enough to prevent most customers from following the hairdresser to the new employer without putting big strain on the hairdresser. When I hear of janitorial services being subjected to a non-compete that sounds way more crazy to me. A company hiring janitorial services from another business most probably won't switch firms if a janitor switches employment.

@@johntracy72 Jimmy John's chairman, Jimmy John Liautaud is a big game hunter. He even hunts elephants and has wounded them without retrieving the animal. There is a boycott of Jimmy John's in which I participate.

interesting

Then dont sign bro

@@OM-bs7of it sometimes impossible to get jobs without one in some fields

​@@OM-bs7of easier said than done. There are times, such as the hairdresser's example, where someone's in a desperate situation and they sign practically under duress. If one has options, then yeah, they shouldn't sign. However, companies shouldn't have so much power that they can include unfair practices in their contracts to screw people over. They wanna do that with high level folks who are at or near the top of the company's chain of command? Fine. Those folks have less competition for jobs compared to lower level folks. That shouldn't be a thing implemented to regular folks who aren't getting paid upper 6 figures or more.

The problem is that you have to give if you want to take. Right now, there is an imbalance in favor of the worker. Companies are extremely exposed to lawsuits, it's super easy for employees to sue their former employer for any BS reason, and hard for companies to win. Anything is wrongful termination now. So, while workers can quit whenever they want, and companies are left exposed, you don't have the same thing for workers. Think about work contracts. If you sign a 5 year employment agreement, that is, you sign that you're going to work at that job for 5 years, the company isn't allowed to break that. The company actually can't fire you until the 5 years are up, but the employee can quit whenever he wants. There is no way for the company to enforce that. That's one-sided as hell. Non-compete agreements make a lot of sense in a lot of cases. It takes time and money to train an employee. You spend that time and money training them, and then only a few years later, when you still haven't recouped that investment, they go and get a job at a competing firm that will pay them more. And OF COURSE they will pay them more, not only they're coming fresh out of a position with their competitor, fully trained, and so the new employer can put them to work immediately, but they're also bringing in a lot of trade secrets from their competitor, it's a valuable resource. I don't necessarily like the concept of a non-compete agreement, but we need some balance. Ideally, the market should be freer, employers should be allowed to hire and fire anyone without reason at any time, and employees should also be free to leave whenever they want. There should then be enforceable contracts where you agree to stay at least a certain amount of time with a company, that both parties sign only if they agree with it, and for certain other things in exchange. If you're going to remove non-compete agreements, then you have to remove the laws that forbid companies for charging you for training, and allow more flexibility for the employer to fire people.

@@dannnyyang It doesn't work, I speak from experience. I own a small firm, that requires quite specialized and skilled professionals. Sometimes, we've gone through the trouble of qualified engineers elsewhere, and paying to relocate them if necessary. That costs money. We offer a lot of incentives to keep the people in the company, including raising salaries almost constantly. I paid for the cost of finding, relocating, and qualifying those workers. I *already* paid extra, a lot for them. Add their salaries to that, and divide the initial investment across the time they stay with the company, and that is my actual cost. They will ALWAYS be cheaper to a competitor, since they won't have to spend the money finding and training them, so they can ALWAYS offer more money. Sometimes, startups will offer preposterous amounts, that I could just NEVER match. If there are no non-compete agreements, then you're encouraging companies not to find younger talent and train them, but rather go and hunt in the company across the street. Just lure workers away from your competitors. You don't have experience and training? Sorry, I won't hire you, because I know you will just leave for another company afterwards and I'll lose, so I'll just go and offer more money to the guy that works at a competitor. Good luck finding a job as a young guy fresh out of college.

Depends, imagine Apple shows up and reach out to your top talents by offering them 2x pay, and they take all the knowledge with them to finish up all the pending projects differently and patent those before you could. lol.

​@@Steven-xf8mz that's just regular market forces at work though. If another company is willing to pay 2x salary to get talent from another company, then that just means the prev company is not paying the fair market value for the workers and if another company will pay more for those talents, then the workers should be free to take their talents elsewhere. Trying to restrain the freedom of workers to choose their employers with non compete clauses is against the free market and against the concepts of liberty and freedom.

@@johnrvf8099 well, how does some company compete with big arms who are full of cash. previous company could be paying above market value and apple/google can still walk in with 2x or 10x if they wanted to.

@@Steven-xf8mz by offering better products at better prices. If they cannot offer that, then they have no business existing. That's the nature of free markets and of capitalism. If Apple or google walks in with an offer of 10x more salary, then that is the market value of that specific worker. It means that Apple or Google values the talent of that worker and what it would bring to their company. Premium talent comes in with premium prices.

@@johnrvf8099 free market? you're essentially saying monopoly is legal. by your standard then why isn't non-compete legal, it's also a part of market tool, thus free market on its own. it sounds like you have no idea what's going on and how free market works.... free market has its own restriction, if free market means anything allowed, then non-compete would hold ground easily as it's free to do so.

Abusive employment terms? How about abusing employees without healthcare or paid leave!

How did you know it was not enforcable?

@@isaksidenius7059 At the end of the day the company has to take you to court to enforce the agreement. If the agreement is unreasonable then the court will favor the employee. In this case the judge basically said if he can't work anywhere outside of the company in the industry he developed his skill and knowledge for then the company would have to pay for the whole five years even after being laid off or fired. Not exactly what happened here but pretty much what might have happen.

Not quite. You're not looking at from the standpoint of the person who developed the clients, the intellectual property, forged the initial relationships, etc. You're welcome to start your own company if you want too and call your own shots, but let's face it - most likely, you don't have the talent or the drive.

@@nosirnthsethangs lmfaoooooo chiiiilllllll. 😂😂😂.

@@nosirnthsethangs Not quite. Your talking to the person who went to school, paid for their degree, became triple board certified, worked for multiple different companies and then encountered a non- compete. Was already self trained and received no training from company with the non compete. When the board committees set the standards for ALL of the businesses in our field there are no secrets. The standards are set outside of any single business.

@@nosirnthsethangs obvious bot/burner account

@@nosirnthsethangs that’s the problem non competes are being used against everyday people. They should be for C-suite and above. It has raised the cost of healthcare by 183 billion in the USA

if you dont like non-compete clauses, you're a communist

They are in most European countries

@@syncaccount8550 Do you know which countries still have them?

Non-compete is a service provided by employees to their employer. Employers have to pay for this non compete service. To stop employers from stifling competition and randomly binding ex-employees into non-compete clause, non-compete service should be at least 2-3 times employees pay by law. That will protect both employees and employer interest without stifling competition as much.

@@idle4407 No. It’s too authoritarian on individual persons. They must be unenforceable. This is ethics.

Right. The US CoC is not even a government entity and has the interests of the corporations with them. Of course they want non competes

It seems to me that non-compete agreements are bad. But I don’t want unelected bureaucrats declaring they have sweeping authority they were never granted. It’s a valid concern.

@@CreepahKillahRSA I understand that. It's definitely a valid concern. But the point I'm bringing up is that if you have a problem with an unelected bureaucrat voiding NCAs, they need to defend it with more than "you don't have the authority". That argument will likely fall flat because if the FTC is empowered (by law) to make such decisions, then it doesn't matter how much you yell "don't do it". Rather, they should defend the merits of NCAs so that the FTC finds it harder to overturn them.

Yeah that guy and the guy with the speech disorder need to be reemed

It's their job. It is the FTC's job to regulate anti-competitive behaiviour. Imagine you walk into Wall Mart, and must sign as a condition of sale an agreement that you will not shop at any other department store, or you bought a Mac, and needed to sign an agreement prohibiting you from buying Microsoft Windows.

Nobody is forcing people to sign non competes. Its the persons fault who signs it

@@Lomaherp Employers blackmail their employees with it, saying they’ll terminate employment unless they sign it. Labor laws exist for a reason, or else we’d have kids working 80 hour weeks.

@@Lomaherp hey smooth brains, did you not watch the video? they literally talked about the hairdresser having to sign a non-compete clause after she was already hired. they would have terminated/fired her if she didn't sign it.

@@samtherat6 But what about they gave them the employment in the first place? You're not complaining about that. Kids are too young to sign contracts.

@@XOPOIIIO what’s your point? kids are too young to sign contracts because a law says so.

Which eu country?

@@denniszenanywhere at least France. Cannot speak for others as I don't know the law in those, but won't be surprise to have something similar.

@@runnexplorer Thanks

@@runnexplorer In Belgium too. Either they pay out (I think here it's half of the term, so if you have a 1-year non compete, they have to pay your 6 months). But depending on circumstances you can also negotiate with your employer to nullify the non-compete clause (which I did the last time I switched employers) and I also think (but I'm not sure) that they don't count if you are fired by your employer, only if you leave yourself.

Business policy in the EU is not aspirational

Patents and trademarks are antithetical to capitalism

In my industry, they can just go on a website and it immediately shows all details of your new employer (if in same industry).

Showing up at the executives house with mr. Arkansas 15 and 35 extra doses of acupuncture is a great way to show these corporate communists who their real bosses are.

LOL like a slave. Yeah. I’m sure slaves AGREE to sign contracts prior to getting their well Paid job. And no one is stopping you from working. Go get another job. Just not the exact same type of job

Love it.

Hah, tempting, but sometimes you sign what you have to in order to have a job / put food on the table. That's why these types of agreements should just be banned, because sometimes you don't have much of a choice.

@@GameHackingGuru that's fine. Thankfully in my position, I have the upper hand. Having a specialized skill gives you a good position in that discussion

@GHG don't be afraid of saying no.

Usually CEO’s get a generous severance package when they leave or are pushed out in order not to work in the industry they are in at the moment, so it’s like they are being paid to respect the non-compete terms & conditions.

I do solar now. We are 1099s. I don't believe they can enforce this against 1099s for some reason but not sure of that's true.

@ahtan2000 there's lots of shady companies in solar, the second one I went to is legit, just not corporate so the owner DGAF about NCAs. I made great deals for homeowners and actually saved them money. A lot of companies gouge out homeowners because the profit margins are so big. I encouraged people to shop around and they did and they still came back. It really helps when the company doesn't have significant overhead to worry about but still sell the same systems the corporate company does. That's the crazy part, I sold the same systems at the 2nd company made by the company I left haha and made more income and saved homeowners more money. What is shady is companies not backing up their claims with documents, or using a management company that can go under any day. Stability is key in leased systems.

You could have worked another kind of job for 6 months. It doesn't mean you just lose money. Time to try something new, really

@@timberwolfe1645 Sure you can 'try' getting a job in a different field, but you have 10 years experience in your chosen field and have 0 years experience in other fields. Its going to be a heck of a lot more difficult and probably take you more than 6 months to even land a good job in another field with 0 experience. So it would be pointless to put in the effort to get a new job in a different field compared to waiting out the non-compete for the 6 months and start the new job you were already offered.

What job was it? Was there a risk you could take either trade secrets, or customers to your next employer?

@@jac540 It was an IT job. No trade secrets involved. My old company lost the contract, to the new company. The new company decided it would not be easy to fill the role I had so they made me an offer. It was an easy decision I live near the client, I didn't have to move or anything and just continued doing the same job at the same place for a different company.

@@jefflewis4 wow thats insane they lost the client you did work for and still forced you under their non compete thats messed up

Agreed. A working stiff who is really replaceable should not be under a non compete clause. They're not in a position to damage the company since they've no access to anything that can give any other company a leg up.

In my country I only see those clauses in C level jobs. I'm very surprised to see that US companies are using this so wide-spread around every level of the company

Thats already protected by IP rights and patents no need for a non compete clause. Eliminating thsi clauses might not have the impact they think for the workers though, it might actually lead to lower wages in the end.

The thing is, many of these same companies that have non-competes likely already have different legal agreements that cover Intellectual Property and its usage outside of the company.

Or just sign a NDA?

Lmao, you mean the country that supports genocide in Palestine and kidnapped and tortured Europeans after 9/11?

You live under the dictatorship of capital. They couldn't care less, they have doble standars for everything.

Oregon, Washington, Illinois, Virginia, Colorado, and Maine all have minimum pay requirements for non-competes. 3 states nearly ban them completely in California, Oklahoma, and North Dakota.

@@Carahan I think completely banning non-competes is the wrong approach. There is a valid reason for them in some cases and in those cases, companies are going to find a way to protect themselves.

If you don't want your employees to go away then y treat them well and pay them better. You don't own workers. The skills they have are their even if you trained them. Non competes are just indentured servitude rebranded

@@atra7812 This is not always about how employees are treated but also about inside information they know like.sales and client information, new products, financials, trade secrets, etc. Protecting this information is a valid concern and non-competes is a reasonable way to protect that. I agree that in some cases (like what happened to my son) that non-competes are abusive (but calling it slavery is a bit overblown). The best approach is to find a way to protect employees AND employers.

@@connecticutaggie most of those things are already protected by IP laws, if they want silence on other things not explicitly protected by law the need to pay for all the missing income due missing opportunities.

And even if so, in that specific case, it is anti capitalist as you're preventing competition

That's just how those stormtroopers with hive mentality are. They will defend their capitalis masters even if it means a detriment to themselves.

In my opinion, SVB was attempting to restructure their bond portfolio, which involved selling their low-yielding bonds despite the potential loss, and compensating for it by buying higher-interest-rate bonds on the open market.

@@richmorten Despite the economy's resilience thus far, the SVB scenario cautions that the effects of Federal Reserve rate hikes persist. During such periods, investors must remain alert to anticipate what comes next. It is not necessary to act on every prediction, so I recommend seeking the guidance of a financial advisor, which has been my go-to advice for some time now.

well said a i told my friends this yesterday at the office

@@KevinEvans-mq4ob Having a counselor is essential for portfolio diversification. My advisor is vivian marisa coelho, who is easily searchable and has extensive knowledge of the financial markets.

Do you scammers really think that still works?

Its true. Even for the contracted consultants too. I have heard stories companies wanted to hire full time but drop the idea because Robert Half fee was too high.

But they're gonna try! And it's gonna cost you to fight it!

Yeah, in my experience they're a non-issue. Which begs the question... is this really journalism?

@@RichardAmesMusic yes

They might be illegal, but they still cost the same money to defend against as legal ones.

As someone who’s experienced a civil Supreme Court lawsuit I could tell you a dozen ways to drag out a lawsuit to make it as expensive as possible and they’ll still get nothing if they win.

They might not be able in enforce and indefinite non compete, depends on the state he lives in. Courts generally do not like indefinite non competes. He should talk to an employment attorney in his state.

@@jamesodell3064 for sure. I don’t think so either. But for as long as he is working for them, he can’t go and get another job regardless. Even though it’s not fully enforceable, they could still go after him for a certain amount of time. It makes it quite the complicated situation. We also live in Texas and I believe that he would be on the losing end in court regardless.

True however not signing it would void your employment… so yeah

@@allenmobley8444 Are your job skills so weak that you can't say no and get a job somewhere else?

Actually you typically sign one on employment/onboarding or you sign it a few months after you start employment. And typically if you don’t sign it, the company will fire you immediately or basically put you in a situation where they could find “reason” to fire you in short order.

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Yeah but this doesn't affect you, since it sounds like you wouldn't leave based on what you said.

Your lawyer is wrong, these non-competes do hold up in court as long as the scope isn't too big. Just watch the video, the court held up the non-compete against that hair salon worker.

I've heard the same (that they don't hold up in court). The problem/issue though, is that going to court cost a lot of money. Regardless of whether the employer is a Fortune 500 company, a university, or a startup, they have substantially more money for layers and litigation than an individual does, and they will defend their position no matter how much it costs.

I've never heard of them going to court and I know dozens of people who have had non-compete clauses. You get a nasty letter but everybody knows they're not enforceable, so everybody ignores them. I suspect there's more to the story in the examples from this video - they might have had non-compete clauses but I bet if you dig into the lawsuits you'll see some other basis for the claims.

You're assuming that every company is doing something innovative when they're not. Even if they are, lower level employees who know nothing are forced to sign these agreements. Would it make sense to tell an Uber driver he can't work for Lyft until his two years is up?

@@flyer3455 that makes sense when you bring up low level jobs like Uber. But for high level jobs, non competes are justifiable.