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 the fuck do they even need a non-compete clause for a sandwich shop? Are they worried people are going to reveal their secret Jimmy Johns technique for putting salami on bread to Subway?
The myth of the non-skilled worker isn’t working in their favor here.
It’s legal for them to do so, and if employees can’t go to a competitor, it has the effect of depressing wages.
Non-compete clauses make sense for certain higher level employees (and usually involve some sort of garden leave payment too) but corporate America has started to slip all sorts of bullshit into standard employment contracts just because they can.
I don’t even think it makes sense for them anymore. You either retain them with pay and job satisfaction or not. This idea that corporations can own experience is bullshit.
Kinda like the whole Disney artist thing.
Any character you create while working for Disney is Disney property. Even if it was a quick sketch done on a napkin. Even if the character doesn’t even have a name.
wait is that on company time or just in general?
In general. Even art the artist makes at home in their own free time belongs to Disney
It’s not just to depress wages, preventing worker mobility also lets you abuse them in other ways like rotating schedules (which also prevent workers from holding multiple jobs or going to school), bad work environments and wage theft.
It’s not surprising that companies are increasingly abusing the workforce, it’s surprising that workers haven’t started organizing to fight back.
I mean you joke, but that actually happened by me lol
There is a hero shop that is well known for specific heros they make that are really good, so after they fired a guy who worked there for years and years he opened his own shop and took all their recipes plus added pizza. (He also hired someone to make pizza and then fired him after he learned how to do it. He’s just a scumbag lol)
Did you mean gyro🥙?
Nope, it’s one of the variations of names for a long sandwich we use in NY. Hero, grinder, hoagie, sub, etc… lol
Aah! We learn something every day
It isn’t about need, but about want. Every extra notch of control they can get over workers employment opportunities, they want.
Fun fact, there are franchise owners for all the big names that do this. McDonald’s, Pizza Hut, etc. It’s not usually a corporate decision.
Related, there are chains that won’t hire from each other. They maintain a gray list of previous employees and you can only get hired back at your original location.
McDonald’s et al corporate level don’t care if franchisees do this? I mean, I can see them not caring…but I could also see them trying to score social points by pretending to care and claiming they disallow it.
They don’t even pretend.
Ah yes, workers might take those precious trade secrets of (checks notes) how to make a sandwich.
Not slavery, serfdom.
Which is technically better then slavery for the serfs, but conveniently is also significantly cheaper for the landed gentry/capital class as they don’t have to feed or house their serfs.
Why do you think political bribery is so rampant and expected in the US?
Our politicians are almost exclusively paid middle managers for the owners. DC works for Manhattan and Silicon Valley.
I thought it was a federal law, but it might just be in my state, but I thought for a non-compete to be valid, the employee has to be compensated for it?
I don’t know of any circumstance where you would be specifically compensated for a non-compete, but in my state they aren’t valid unless you make a certain base compensation, which is currently about $125k/year.
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.
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 picked the wrong side, Governor.
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
NDAsnon compete clauses.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!”
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.
Sorry, just a mistake on my part because of morning brain.
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.
Why can’t they retain top talent by paying them more?
But how would that benefit the shareholders? You’re not thinking like a true capitalist!
Hahahahahah
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.
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
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.
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”.
Any chance of overturning the veto?
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.
The big question is, would they have gone bankrupt if they had been allowed to hire you?
The two events are independent. The entire sector burned down.
Ahh I see.
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?
From this photo, this woman looks like the baddie from Men In Black 2.
Asshole.
Hope they have votes to overrule her veto.
