Originally published at: http://boingboing.net/2017/06/19/blackballing-cub-reporters.html
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Non-Compete Agreements are Void in California.
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Whaaaat? … and I thought unions were the spawn of the communist devil!
I suspect that in Europe the employer who wants to protect themselves in this way does so by offering/enforcing 3 or 6 month notice periods.
You want to leave (go work for a competitor), fine but 3 months’ notice.
We want to sack you and stop you working for a competitor for 3 months, we give you three months notice and pay you three months ‘gardening leave’.
Otherwise: “Restraint of Trade”. (But IANAL so it’s all no more than just thinking out loud.)
Non-competes for even stupid things are maliciously brilliant. One of the last bits of power American workers have is their feet; they can pit employers against each other to get a better salary or a better job. Thanks to non-competes (in states where they’re enforceable), workers have lost even this small bit of advantage. Now when you go to the boss to ask for a raise, and he says no, there’s no using another offer as leverage: “Not only are you not getting a raise, but if you try to get another job in this industry, we’ll fire you, and then we’ll sue you. Now get back to work.”
@Papasan correctly points out that non-competes are generally unenforceable in California (Bus. & Prof. Code, § 16600 – there are some narrow exceptions, however, such as prohibiting an ex-employee from directly soliciting a current client of his former firm), but as with many things in our country right now, we have a divergence between states that want to protect people and states that want to protect companies – and the states that offer the most protections to corporations are the ones where protections for workers are needed most. It’s great that some states offer these protections, but the job isn’t over until all states have these protections. (And even if the non-competes are unenforceable, a shady company can still make you pay an attorney to vindicate that claim; the threat of a lawsuit is a strong deterrent.)
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This.
As alluded to in the article, there are some federal protections for workers and other states have some laws on this, but for the most part they aren’t as clear or broad as in California. This of course means that your ability to protect your rights is determined by how much legal assistance you can afford.
It seems like that’s the key here. If it was just a question of the previous employer’s actions, then I don’t think anyone would worry about a clause like this, because your previous employer would have to stump up the cash to take you to court, and win, before it affected you in any way. What gives it teeth is if your current employer is willing to fire you because your old employer sent them an email.
I actually violated a clause somewhat like this in the past. I hadn’t even known about it until my former “manager” (I’d met him twice) told me I was very naughty but they’d let me off this time. I was so surprised that I basically gave him my honest reaction (“oh, sorry, lol”). Though, granted, this was in the UK, where employers don’t wield the threat of banning you from medical treatment if you fail to treat them as feudal lords.
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Why attack a worker who has moved on? How could the employer possibly benefit? In fact, they shot themselves in the foot, didn’t they?
It is not so much attacking only the worker who left, but attacking the new employer (competitor) hoping to benefit from the expertise the new employee brings.
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We wish…
Non-competition agreements are perfectly fine under English law at least. There are some restrictions, for example they have to be no more restricting than necessary to protect the business’s legitimate interests.
How restricting is that? Depends on the business, what role you had - oh, and by the way do you have the £30-£40,000 it’ll cost you to argue with your former employer?
With the risk of having to pay that plus their ridiculously exorbitant legal fees if you lose?
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Non-competition agreements may be fine under English law in general. Restricting which future employer you may or may not work for once you have left an employer is not, as far as I can see. Though it may be enforceable for a short period (as I suggested) which would typically involve compensation (i.e. being paid for gardening leave).Of course if someone signed something that was in fact dubious, it is still enforceable via financial and legal intimidation, as you suggest. That does not make it legal.
I’m not sure what you mean here.
An employer is certainly entitled to enter into an agreement restricting an employee from working for a competitor after they leave employment.
Provided the restriction is considered to be reasonable in scope, i.e. no wider in terms of industry, geographic location, or length of time the restriction will apply, English courts will have no problem upholding and enforcing such an agreement.
Other than the basic fact of agreeing to hire the employee there does not need to be any consideration or compensation. In other words, it is not the case that a UK employer has to pay you six months’ wages if they want you off the market for six months.
Garden leave is a different kettle of fish altogether. You can’t work for another employer while on garden leave but that is because you are still employed by the old employer, nothing to do with whether you are subject to restrictive covenants or not.
The time you are on garden leave does count against the time the restriction runs after your employment comes to an end so an employer can’t put you on garden leave for six months and then hold you to a six month restrictive covenant.
I think we may be talking at cross-purposes or violently agreeing - not sure which.
Yes I guess it is possible for a specific restrictive covenant but ‘restraint of trade’ may also mitigate its effect or enforceability. Needs a lawyer to comment, however…
In my experience no UK employer will have a clause in an employment contract that says you cannot work for a competitor. Nor a clause that says that you cannot leave their employment to go straight to the employment of a competitor. Because not (m)any UK employees would ever sign such a thing. The ‘method’ that UK companies use in practice to achieve a similar end as in the original post (a time-limited non-compete clause) is to have contracts with 3 or 6 months’ notice. When you resign they ask “where are you going” and depending on your answer (and their assessment of its truthiness) they either say “well that’s no threat, good luck with your round-the-world trip/retirement but you have to work three months’ notice” or they say “Hmm, you are going to a competitor, leave the premises right this minute and stay at home gardening for three months, which we WILL enforce if you try to work for anyone else in that time period, because you are still workng for us!”. In practice that is what I have always observed to happen.
Over a journalist? Isn’t there always a gross oversupply of those? When did journalists become rockstars?
And the President tells me they are the enemy of the people, to boot.
Don’t ask me, ask the idiotic self-obsessed paranoid narcissistic dumb US corporations that try these stunts. But some journalists are the equivalent of rock stars and a contract to tie them down or providing leverage to ‘negotiate’ a settlement for letting them go write for a competitor may be seen as good business sense.
FYI I believe Boris Johnson got of the order of GBP£250,000 per year for blathering some pithy comments for the Daily Torygraph from time to time. Gove probably similar for the Murdoch Times? (Accuracy not attested, illustration only) Worth protecting if you think it may affect readership if all your star by-lines start appearing in the competition.
I think we are talking at cross-purposes.
My fairly extensive professional experience is that UK employers routinely include such clauses and often try to enforce them. People sign them too.
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We move in different circles, clearly. I’ve been in the IT sector for a long time, but in non-technical areas. Always seen it handled via notice periods and gardening leave. The “where are you going” question is always the key/tricky one. I’ve known people say “I’ve not decided yet” and that has been enough for instant gardening leave instead of working the N months’ notice. In other identical cases the person has been trusted and asked to stay around in the office to effect handover etc while working out notice.
Yeah, it does depend on the sector and the employer.
I would be very surprised if the employment contracts didn’t contain some post-termination restrictions as well (some employers will also do it via a separate agreement) but in practical terms since the garden leave period counts towards the time any restrictions would run for an employee with a long notice period probably doesn’t really notice the difference.
I just didn’t want to leave any non-UK people with the impression that our law was somehow better than the US in this area. Sadly, it isn’t.
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Noncompetes are what awful work environments use to make sure you remain too afraid to badmouth them for years after they’ve extracted what they need from you.
I’m glad they unionized to prevent this, it is exactly the sort of predictable excess that owners will go to in an attempt to secure and grow their business at the expense of the rights of their workers.
