FTC Proposes Banning Noncompete Clauses for Workers

Re:FTC Proposes Banning Noncompete Clauses for Workers by snowwrestler on Thursday January 05, 2023 @01:30PM (#34264239)

The argument is basically that trade secrets violations are incredibly hard to detect and pursue. You can’t see inside a person’s brain, and (short of industrial espionage) you can’t see inside a competitor either. So a person could come work for you, gain some knowledge of your trade secrets, and then go get a huge offer from a competitor based on that knowledge.

In contrast, it is extremely easy to detect a person’s employer.

I’m not saying this is a valid or correct argument, I’m saying this is one of the arguments.

Another argument (that I know less about) is that there is knowledge that is valuable and proprietary, but does not actually qualify as “trade secrets” under those laws.

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Re:FTC Proposes Banning Noncompete Clauses for Workers by curiousllama on Thursday January 05, 2023 @01:58PM (#34264683)

This is a solid summary. Another, related argument I've heard is that it incentivizes R&D + upskilling. Much of the value is "we now have people who can do X", not X itself. Without noncompetes, it's a better strategy to try to poach your competitor's R&D employees, rather than invest in your own, which very quickly leads to less research + upskilling.

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Re:FTC Proposes Banning Noncompete Clauses for Workers by wpietri on Thursday January 05, 2023 @02:10PM (#34264880)

A reasonable counterargument here is that if the improvements from misusing trade secrets are that hard to detect, then they were perhaps not sufficient to be worth suing over. Especially given that the discovery phase of a lawsuit does indeed let you see inside a competitor.

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Re:FTC Proposes Banning Noncompete Clauses for Workers by anigbrowl on Thursday January 05, 2023 @02:25PM (#34265119)

That's a somewhat reasonable concern. But if it really matters to an employer...pay for it. For example, offer a security that vests after 5 years or whatever. Saying 'it's already built into the compensation' doesn't cut it, because then it starts becoming the norm for everyone.

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Re:FTC Proposes Banning Noncompete Clauses for Workers by TechBro8615 on Thursday January 05, 2023 @02:34PM (#34265265)

"Trade Secrets" have always sounded like a form of protectionism to me, anyway. If you believe software patents shouldn't exist, then you should follow the same logic to lead to the conclusion that trade secrets shouldn't exist either. Both are expressions of business processes that shouldn't otherwise be restricted by blanket clauses or gag orders.

To me (a non-lawyer and non-legal scholar), an NDA seems more appropriately legal than a non-compete agreement, because it at least depends on enforcing a specific action rather than blanket gagging a person's ability to do an entire job where they might not necessarily disclose pertinent information.

It begs the question, where is the line between NDA and non-compete? If I have an NDA and then go to a competitor, my former employer still has a right to enforce that NDA, but how would they ever determine (prove) I violated it? I guess this difficulty is where the justification for non-compete comes in, but I think the onus should be on the employer. It's not fair to the employee if the employer can just blanket forbid them from working somewhere because they might disclose some information to their new employer in a violation of an NDA which the old employer is either too lazy or incapable to detect.

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Re:FTC Proposes Banning Noncompete Clauses for Workers by Falkon1313 on Saturday January 07, 2023 @04:30PM (#34293053)

With a non-disparagement agreement, it's often pretty easy to see if someone publicly disparaged them. A public tweet about how your last job was a hellhole or your boss was an idiot coupled with a Linkedin profile showing where your job was, or just a series of posts on one platform where one indicates your employer and another is disparaging.

Edit: Oops, I misread NDA as Non-Disparagement instead of Non-Disclosure.

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