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NY Governor vetoes ban on noncompete clauses, waters down LLC transparency bill

ajsnigrutin
59 replies
17h47m

I understand the need for noncompetes in some areas, but this can be solved differently... In my country (slovenia), if the company wants you to sign a noncompete, they have to decide the length of the noncompete (months, years after you quit) and a monetary compensation has to be written in for the duration of the noncompete. The wording is kinda loose and a few "decided by the court", but this would be an interesting compromise, especially if tweaked a little. So, if you get employed and educated for an eg. rocket scientist, and the company wants you to sign a noncompete, so you could only get a job as a burger flipper, the company would have to pay the difference between what you earn due to a noncompete, and what you'd earn if you continued working the same job (so your previous pay plus inflation + some added percentage as a safety margin).

hippich
21 replies
16h53m

How does it work in practice? Can company write contract saying compensation for non compete is $1/yr?

TylerE
17 replies
16h44m

What incentive would there be for the employee to sign such an incredibly one sided contract when they could literally go to any other job?

fardo
8 replies
16h35m

I think it’s more telling to look at the opposite question, “what leverage would employees have to turn such a term down, assuming such practices were considered ‘industry standard’ and all employers of note made sure to include it?”

The answer in an environment with a ban on non-competes is “they’d either have legal recourse if someone tried to write them a contract with that term, or the term would be treated as non-enforceable and therefore harmless”.

In the current environment, broadly speaking, most employees wouldn’t have leverage to turn such a term down, and generally don’t.

somenameforme
7 replies
13h0m

It's not most employees, its the employees that an employer would even bother with a non-compete for. And many (most?) of this group would have the leverage to turn down an undesirable offer.

reaperman
6 replies
12h44m

Arby’s, Auntie Anne’s, Buffalo Wild Wings, Carl’s Jr., Cinnabon, Jimmy John’s, McDonald’s, and Subway have all made low-wage workers sign non competes.

randomdata
4 replies
10h58m

The only leverage those employers have over those people is the 'fun factor'. There is, just in food service alone never mind other industries, many, many other low-wage (but with tips!) restaurants with names you've never heard of champing at the bit to hire those people instead.

However, it's also kind of meaningless for that kind of job. Some small risk of never being able to flip fast food burgers again? Oh well. What have you lost? The aforementioned fun tends to be short-lived anyway and people know that going into it.

reaperman
3 replies
10h36m

Not necessarily true in many small towns across rural USA. If the major holding companies, e.g. Yum! Brands, McDonald's, etc. have all of their brands doing non-competes there might be only 2 independent fast-food joints within a 45-minute drive and few other jobs available.

randomdata
2 replies
10h20m

If that scenario ever played out, the workers would not be able to sign the agreement, so the employer would just have to concede. It would be far more costly to close down business (unless it was going to close anyway, in which case your comment is moot) than to take a stand and hire nobody.

Bedsides, if we want to pretend that in your made up scenario that the workers did somehow end up signing the agreements, the employers would quickly run out of people to hire. A small town – one too far away from anything else for others to come in to work – and where everyone has legally taken themselves out of the job market is not a good place to be in as an employer. While employers can benefit from non-competes under certain conditions, they are not universally beneficial.

You offer a fun thought experiment, but in reality a non-compete would not be offered here in the first place.

tsimionescu
1 replies
8h47m

You're somehow speaking as if this isn't already happening, at least per the other comment.

Also, if you think McDonald's is going to change a corporate policy rather than operate a few stores below capacity or even close them down, you have a really skewed view of the relative power of low pay non-union workers...

randomdata
0 replies
4h3m

McDonald’s doesn’t own those small-town locations. They are franchised, typically by locals. The employer of those low-wage workers is a completely different “corporate” – one that is in tune to the local realities.

The fake agenda pushing is funny and all, but why don’t we just stick to reality? There are real reasons why non-competes are a problem. What is gained from the "But won't someone please think of the (adult) children?" narrative?

somenameforme
0 replies
1h29m

This is plainly false and I have no idea what makes you think it's the case. The only reference I could even find was Biden saying something like this. That's somewhat fortuitous because it resulted in one of the 'fact checkers' actually bothering to fact check this here. [1]

The most places like McDonalds used to do was to force franchise owners to sign a sort of non-compete to prevent poaching each other's employees. That practice was ended half a decade ago and now even franchise owners don't have to sign non-competes, let alone low-wage employees.

[1] - https://www.politifact.com/factchecks/2020/jul/28/joe-biden/...

JoshTriplett
2 replies
16h35m

What incentive is there for the employee to sign a non-compete today that has $0/year compensation for the non-compete duration?

However, another comment in this thread suggests that the law in question requires the compensation be the same as that of the job itself, which avoids this issue.

tsimionescu
1 replies
8h45m

What incentive is there for the employee to sign a non-compete today that has $0/year compensation for the non-compete duration?

If it's the only way to get a job, that's the incentive. If the whole industry does it, or at least the vast majority, then workers don't have an actual choice.

JoshTriplett
0 replies
7h6m

That was the point of my comment. The comment I was replying to asked " What incentive would there be for the employee to sign such an incredibly one sided contract when they could literally go to any other job?", and my answer was to equate it to the incentive they have for signing existing even-more-one-sided non-competes.

distortionfield
1 replies
15h4m

In the analogy, I don’t think you could “literally go to any other” rocket science job or whatever. Even within my field, which is pretty broad in tech, it’s not that easy to switch jobs and I’ve had non-competes meaningfully interfere with new prospects because of the subject matter of the new opportunity.

ghaff
0 replies
3h8m

The existence of a non-compete can be a real showstopper, especially at smaller firms even if the noncompete probably doesn't apply. I worked for a very small company for a number of years and our business office basically wouldn't touch anyone who had a noncompete of any kind.

xboxnolifes
0 replies
13h23m

Same argument applies to the status quo. Zero pay for non-compete duration, just don't sign.

palemoonale
0 replies
8h10m

when they could literally go to any other job?

Can they, though? This fight is moztly not about the spoiled tech sector.

Broken_Hippo
0 replies
6h42m

Some fast food places require these.

I'm pretty sure they aren't gonna get literally any other job. Sign it or no paycheck.

vlovich123
0 replies
16h39m

It sounds like the requirement is that they pay to give you the same salary until the non compete expires.

realusername
0 replies
9h7m

These laws in the EU countries that apply them are usually stating that the compensation has to be reasonable in regards to the salary the employee is normally getting and the potential loss of money created by the non-compete close so no, one dollar won't work.

Also the non-compete clause need to actually protect some company knowledge, a non-compete clause on a bus driver will never be enforceable, regardless on how much extra the company pays.

ajsnigrutin
0 replies
3h30m

In practice, noncompetes are rare, because noone wants to pay for someone who quit (or got fired).

I personally know only one person with a current non compete, he worked at some niche company, that paid a few tens of thousands of euros for specialization in one specific niche branch and one specific software. He can still work in the same industry, just not with that specific software, and he got 75% of his previous paycheck for (i think) 18 months (the length of the noncompete) + of course the current paycheck he earns in a similar industry (with obviously a different software solution).

The noncompetes are usually a case of having to invest a lot to educate a worker in the first place (again, niche stuff). General stuff (like a php programmer) would never get a noncompete, because the courses are cheap, anyone can learn that themself, and the monthly payouts are more expensive than udemy courses. On the other hand, there is some abuse, where people get employed, especially in the public sector, to get the expensive (cisco, redhat, microsoft,...) certificates paid by the employer and then quit and do freelance work.

CSMastermind
21 replies
14h47m

This is basically how it works in many finance jobs in NYC. Companies pay you for the duration of your non-compete normally at your base salary.

The one catch is that 50%+ of your compensation in these jobs is typically a yearly bonus which is not paid during your non-compete period.

But pretty much everyone knows this and socks away some money to limit the shock. The system works well both for employees and companies. There's some grumbling here and there but legislation like the one proposed in NYC would have needlessly broken a system that works pretty well.

lotsofpulp
8 replies
12h27m

There's some grumbling here and there but legislation like the one proposed in NYC would have needlessly broken a system that works pretty well.

The system needs to be broken. What works well is paying and treating employees well enough so that they do not want to leave and go to a competitor, like businesses in California have to do.

peyton
3 replies
7h56m

We’re talking about people who discuss their own compensation in terms of “bucks”—“10 bucks” is 10 million dollars. I don’t think people who sign these noncompetes for highly lucrative knowledge want the system to be broken, nor do they want to adopt California’s model.

lotsofpulp
0 replies
7h50m

Sounds like you are talking about non disclosure agreements.

dumah
0 replies
3h0m

You’re dismissing the harmful effects that these arrangements have on the vast majority of employees at such firms.

There are only a handful of traders and PM’s at successful firms that make such high comps.

The compensation of rank and file employees are quite similar to working in tech but are encumbered with huge risks following termination of employment. The firms I have worked at apply non-competes down to administrative employees who aren’t even involved in the business and have no valuable proprietary knowledge.

For employees whose residency status is tied to employment, these non-competes can result in having to leave the country.

For those with families, they are unable to pursue their primary profession and lose healthcare coverage or pay massively increased premiums.

You don’t understand the population these agreements harm or understand the effects they have.

Broken_Hippo
0 replies
6h45m

The fast food workers expected to sign one of these lest they can't work even a basic job probably disagree.

ffgjgf1
3 replies
11h12m

So workers is California never switch jobs and all work at the same company until retirement?

The system needs to be broken

Why?

phantomathkg
1 replies
9h57m

Why protect the company who doesn't treat their employee well?

ffgjgf1
0 replies
1h1m

That seems tangential. There is nothing particularly wrong with non competes if the worker is properly compensated.

I personally wouldn’t mind a 6 month NY hedge fund style gardening leave each time I switch to a different job.

jjav
0 replies
9h7m

So workers is California never switch jobs and all work at the same company until retirement?

The opposite, here in CA you can switch jobs at will because noncompetes are illegal. That's the primary reason I can't imagine working anywhere else.

Broken_Hippo
4 replies
6h47m

* would have needlessly broken a system that works pretty well.*

For some people.

For other people, they just can't work in the industry without fear of a lawsuit and don't get compensated at all. This is much more common when you start looking at lower paid people - sometimes fast food workers can't get another foodservice job because of these.

The system works great for these companies because they make it harder for their employees to get better jobs. It doesn't work so well for the employees in these cases.

abduhl
2 replies
3h52m

You’re all over this thread making this statement about fast food workers having to sign noncompetes. I could find no stories of this practice happening currently, the most recent I could find is in 2016 and the article is about this practice ending in 2016. Which fast food chains in the year of our lord 2023 are putting noncompetes in their employee’s contracts?

hn_acker
1 replies
1h28m

I haven't found anything about fast food restaurants in 2023 either. However restaurants had been using non-competes in 2017 [1]:

While the prevalence of the practice may vary by region, one labor study published in April estimated that around one in six people working in food preparation or service jobs was bound by a non-compete agreement, according to a survey of nearly 67,000 workers.

The news article is from 2021 [1], but the one page in the labor study mentioning food services uses data from 2017 [2]. (The paper is on SSRN and there is no open-access mark, but I was able to open the PDF. Check page 51 out of 61 if you're able to open it.) There's still a problem even if only non-fast-food restaurants use non-competes, and a ban on non-competes should cover all restaurants at the very least.

Biden signed an executive order asking the FTC to consider banning non-competes, though the FTC hasn't actually passed anything about non-competes yet.

[1] https://thecounter.org/biden-targeting-non-compete-agreement...

[2] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3814403

abduhl
0 replies
21m

There is a huge difference between fast food fry cook, manager at the local Texas Roadhouse, and head chef at a 3 Michelin star restaurant. The claim was that the first was being made to sign a non-compete. Again, the only “fast food” level non-compete is the 2016 story where Jimmy John’s stopped doing it:

“For example, readers may recall the infamous Jimmy John’s non-compete controversy of 2014. According to a Huffington Post report, the fast food chain required its employees and delivery workers to sign contracts agreeing not to work at any restaurant where sandwiches comprised 10 percent or more of total revenue (that’s right—not just sandwich businesses but any store that sold sandwiches or wraps) within three miles of a Jimmy John’s location for two years after leaving the company. Following an investigation from the New York attorney general’s office, Jimmy John’s dropped the clause in late 2016.”

I don’t disagree that non-competes are a problem but this sort of hyperbole undercuts the stronger arguments that can be made for why noncompetes (without attendant compensation) should be forbidden.

chii
0 replies
5h36m

sometimes fast food workers can't get another foodservice job because of these.

there should not be any non-competes for job levels for which the skill is mostly commodities. Non-competes should be only for companies hiring a specific skill, and their working in said company would allow them to garner knowledge that can help a competitor - thus a non-compete. And it needs to be paid for.

If a company is found to be abusing it to ensure their employee cannot be mobile (for wage competitiveness), then the law should go down hard on them.

mike_d
3 replies
13h19m

legislation like the one proposed in NYC would have needlessly broken a system that works pretty well.

Makes sense. I assume there is a pool all the finance people pay into every month that covers all the people who don't work in finance and are subject to non-competes?

JustLurking2022
1 replies
12h44m

No, it's up to the individual company to continue paying those employees.

foota
0 replies
11h36m

Parent is saying that noncompetes affect more than finance companies, and other companies may not pay for them in the same way.

JackFr
0 replies
12h12m

My (possibly incomplete) understanding of ‘gardening leave’ in finance is that it’s based on the idea of specific knowledge of trading positions or specific deal term sheets. It’s not that you can’t compete against us in general or use general techniques, but for 30/60/90 days you have specific knowledge of ongoing operations you can’t use.

The hiring firm pays for, but cannot use, the hired person.

nickjj
1 replies
4h10m

The system works well both for employees and companies.

Taking a ~50% pay cut for potentially a year or longer doesn't seem like it works out too well for employees.

If a finance job pays let's say 250k that means you're missing out on maybe 125k. Over 30 years at 5% that's $540,000 on that 125k. If your non-compete is for 2 years that's a loss of over a million dollars. If you can happily live on 50k a year that 2 year non-compete just cost you 20 years of financial freedom.

kasey_junk
0 replies
3h56m

In my experience finance bonuses are much less guaranteed than in tech. You don’t calculate your bonus as part of your compensation until it happens, because it’s so performance based that “no bonus” has a reasonable chance of happening.

So garden leave amounts to a bad performance year without having to work, which is a pretty reasonable trade off. At least it always was for me.

logicchains
0 replies
7h23m

The system works well both for employees and companies.

It's bad for the economy because it slows the circulation of ideas. A part of why there's been so much technological growth in Silicon Valley is because ideas could move between companies much faster.

NotSammyHagar
10 replies
15h51m

I don't think there is any reason for noncompetes. They won't pay me if one makes me unemployable. They should be generally disallowed. They only help companies restrict their employee's mobility.

lumb63
4 replies
6h36m

Maybe those companies wouldn’t have existed without noncompetes, and not have provided those employees with jobs. Would you invest a large sum of money to build a site and hire a team if you knew it could not only vanish but also be turned against you at a moment’s notice? Surely the situation where employees have noncompetes is worse than the situation where there are fewer jobs because noncompetes don’t exist?

throwuxiytayq
2 replies
5h50m

Would you really want to create a company where the only reason employees stick around is that they literally aren’t lawfully allowed to work anywhere else? An alien, yet common mindset.

fauigerzigerk
1 replies
3h26m

I would not.

On the other hand I have no idea how to deal with a situation where a small tech company develops some highly specialised expertise in house only to have all their employees poached over night by a far bigger competitor that can pay them a salary or signing bonus that would be uneconomical for the smaller company to match.

How would you discourage this kind of hostile takeover?

kabouseng
0 replies
3h9m

A small company handles that by offering equity to the critical employees and having them share in the success of the company.

ndsipa_pomu
0 replies
4h4m

Surely noncompete clauses are mainly to allow companies to treat their employees poorly, knowing that they won't be able to get a job elsewhere. The alternative to having noncompetes is to value and reward your employees sufficiently.

ajsnigrutin
3 replies
3h33m

What if the company pays 100k for your extra education in some specific niche field, and you then quit and get a 50k starting bonus at a competing company, that doesn't have to invest 100k for your education?

hedora
1 replies
3h30m

How would you know what specialized education the next employer needs? Also, that assumes that classes are equivalent to on the job training.

I guess you could get a job in the non-compete window, but only be trained by the next employer while the previous one paid. That seems complicated and silly though.

ghaff
0 replies
3h17m

Companies do often have strings attached to paying for training/certifications/relocation. That doesn't require a non-compete.

emidln
0 replies
35m

This is the risk they take in exchange for being able to fire me at will.

namlem
0 replies
2h1m

It's reasonable to allow them for certain positions, such as executives. Since NDAs aren't perfect and certain knowledge can and will be transferred. But only very high level positions should ever be subject to them.

vasco
1 replies
8h39m

That's not enough. You're going to be much less likely to find another rocket scientist job after a couple of years flipping burgers.

Non-competes should have limits of months, and be paid at normal salary rates.

Broken_Hippo
0 replies
6h43m

They might have to sign a non-compete at the burger flipping job as well, meaning they can't even get a better foodservice job. They'll have to get stuck in retail if they don't like foodservice.

And it'll still be equally hard to find another decent job.

yieldcrv
0 replies
6h7m

there are multiple trillion dollar companies in California, where non competes are banned

it has long been seen as related to the success of Silicon Valley and one of several reasons why random jurisdictions can’t compete with merely being excited about attracting tech companies

hedora
0 replies
3h33m

In the US, fast food companies often use non-competes to prevent part time burger flippers from working a second job to supplement their income.

The effect is that two restaurants can each hire two people for a total of 40 hours per person, but don’t have to provide either with full-time benefits, like health care, paid time off, reliable hours, etc.

I wonder how your law works in situations like this.

Scubabear68
35 replies
18h11m

The LLC transparency stuff drives me nuts. If a company wants LLC guarantees, it should publish who their owners are. It is incredibly frustrating to literally have no idea who is being XYZ LLC.

Especially when you have “special purpose vehicle” LLC’s which aren’t really even real companies at all.

gavinhoward
19 replies
16h21m

I am the owner of an LLC.

And I agree with you.

There is a similar law going into effect at the Federal level in January. Some people tried to fearmonger when telling me about it, but I thought it was pretty sane after some research.

Having an LLC is a privilege, not a right, and we should act like it.

brigadier132
15 replies
14h13m

Privacy is a right. Why do I need random people scrutinizing everything I do?

tsimionescu
7 replies
8h38m

Because these same people agree to absolve you of any debts you accrue if the LLC declares bankruptcy.

brigadier132
6 replies
6h10m

When random people are giving you protection from legal catastrophe

That's what the justice system is for, not the mob.

mavelikara
5 replies
3h25m

What is this supposed to mean?

brigadier132
4 replies
3h10m

Sorry, I skipped a step in explaining my thought process, the reason people want access to this information is for some form of mob justice, otherwise why else would they want it?

gavinhoward
2 replies
3h7m

No, the reason they want this is so people can't hide money laundering and other crimes with shell companies.

brigadier132
1 replies
2h54m

They can't hide money laundering because of this. Just because the information is not publicly available doesn't mean that law enforcement agencies and the government don't have access to it... How does this information being available to the public help law enforcement do their job?

gavinhoward
0 replies
2h48m

It's also a preventative thing.

If I find an LLC I want to do business with, now I can look at who owns it to see if that changes anything. Otherwise, I can't.

For me personally, I like having them public because one LLC might become a client, and I want to be sure that client is who they say they are and not owned by a company that I won't do business with.

For example, maybe Microsoft decides they want to get support from me. I don't want to support Microsoft. So they have one of their existing shell companies act like a potential client. If LLC records are not public, I can't know it's really Microsoft and reject them. If they are public, I can do the legwork to find out and reject them.

mavelikara
0 replies
1h10m

Are the current laws not sufficient to prevent harm of the owners of an LLC, if their ownership of it is not kept secret?

gavinhoward
6 replies
13h31m

When random people are giving you protection from legal catastrophe, I think they have a right to transparency.

brigadier132
5 replies
6h11m

When random people are giving you protection from legal catastrophe

That's what the justice system is for, not the mob.

petee
4 replies
5h37m

Rights for me but not for thee

brigadier132
3 replies
3h12m

What? Anyone can create an LLC if they want to, it's $100 a year if you want to do it completely online (less if you want to deal with more paperwork). I just sell things over the internet and don't want the entire planet to know who I am because of it.

gavinhoward
2 replies
2h45m

Your customers have a right to know who you are. Otherwise, if you deliver shoddy stuff, they could try to sue, you shut the LLC down, and they're left without justice, even with the justice system.

brigadier132
1 replies
2h25m

Your customers have a right to know who you are

No they do not. Not everything is a right because of feelings.

if you deliver shoddy stuff, they could try to sue, you shut the LLC down

This is way oversimplified. Delivering a "shoddy product" is not illegal and it's not the responsibility of victims to deliver justice, it's the responsibility of the government. If a victim wants justice they should go to a court and a court will have access to information on who owns a business.

and they're left without justice

Ok, so you actually are advocating for vigilante and mob justice.

gavinhoward
0 replies
2h19m

No, I am saying that because they would not know who you are, they could not bring a civil case, and law enforcement would not get involved because it is not a criminal case since it is not illegal.

But if it was public, they would know who you are and could bring a civil case and go through the justice system.

This is way oversimplified. Delivering a "shoddy product" is not illegal and it's not the responsibility of victims to deliver justice, it's the responsibility of the government. If a victim wants justice they should go to a court and a court will have access to information on who owns a business.

Not necessarily.

And in a civil case, it is unfortunately the responsibility of the victim to set the wheels of justice in motion through the justice system.

I have no idea why you think I am in favor of mob justice when I am at risk of it too as an LLC owner.

No they do not. Not everything is a right because of feelings.

This is what the commenter above meant with "rights for me and not for thee." You want privacy, but you deny your customers the right of knowing who they are doing business with.

tazu
2 replies
14h36m

Having an LLC is a privilege, not a right, and we should act like it.

I am also an owner of an LLC, and think it should be a right.

gavinhoward
0 replies
13h29m

And you gave no reason why you think that.

If you wanted to be free of government requirements, you should have used a sole proprietorship.

Otherwise, since the government is giving you some protection, they can ask for things in return.

Dylan16807
0 replies
9h53m

Why should limiting your liability be a right?

somenameforme
7 replies
12h46m

In what scenario is this incredibly frustrating? I can't recall in my life ever once particularly caring who happened to own an LLC, and I think this is true of most people? I find LLC anonymity pretty useful for one important reason - there's lots of crazy people out there - probably at least loosely related to why you're Scubabear68 instead of JasonWilliamsFresno68. I also think it fits the legal and practical definition of an LLC relatively well where you're dealing with that 'entity' even if, of course, all any business is, is just a group of people.

4death4
3 replies
11h45m

It's important if you're hiring someone to do something important and you want to verify the owners haven't been named in any other lawsuits, don't have a conflict of interest, etc.

somenameforme
2 replies
1h18m

In such case, why not simply ask who the owner(s) are, and/or include such conditions in the contractual negotiations? If the company is not new, there will generally be sufficient information available out there about them. If they are new, then you have every reason (and the leverage) to be particular inquisitive during your due diligence.

4death4
1 replies
44m

Due diligence would be a lot easier if you could get straight answers just by asking nicely!

somenameforme
0 replies
34m

Hahah indeed, but having minimum information requirements and penalties in the contract for breach makes this all, more or less, academic IMO.

The point I'm making overall is that demanding there be no anonymity is asking everybody to give up an exceptionally valuable freedom, and what we're getting in return just ranges between nothing for the overwhelming majority of the population, to things with relatively easy solutions for the small percent of people that are affected.

tetromino_
2 replies
11h38m

It's frustrating if you are trying to rent a place. Prospective tenants should have the ability to easily look up that 123 Main Street LLC is partially owned by a slumlord whose other rental LLCs have accumulated hundreds of complaints.

somenameforme
0 replies
1h26m

This example doesn't feel contrived to you? The odds of somebody setting up a bunch of LLCs for each property, maintaining completely anonymity, and somehow these places all avoiding a million complaints visible with e.g. a simple web search just seems, to me, to be difficult to imagine.

paiute
0 replies
11h5m

Add builders and contractors to that

Terr_
4 replies
17h58m

a company wants LLC guarantees

To wit, getting the government to declare it especially exempt from the normal responsibilities of debts and liabilities that affect everyone else.

couchand
3 replies
15h15m

exempt from the normal responsibilities of debts and liabilities

I'm sorry, what are you talking about?

Terr_
2 replies
13h18m

https://www.investopedia.com/terms/l/limitedliability.asp

They are ubiquitous today, but at one time each limited liability corporation was individually created by a unique law passed by the legislature, for a specific purpose--often infrastructure projects--and with a fixed lifetime unless renewed again by another law.

couchand
1 replies
5h37m

Please show me where in that citation is any reference to an LLC being "exempt from the normal responsibilities of debts and liabilities". As the discussion there indicates, limited liability is a totally normal thing, and despite the name it applies to other corporate structures, notably C and S corporations. So what exactly is the "normal" that you claim LLCs deviate from?

Scubabear68
0 replies
1h44m

The article referenced conflates public companies and private ones. Public companies do have liability restrictions, not notably (in the U.S.) ownership is explicitly reported. LLC’s are private companies, but in many states their ownership can be masked or wholly secret.

In my experience masking ownership or allowing secret ownership of LLC’s is a net loss for society as a whole. There is a large surface area where ownership is not being masked for a good reason, but is being done as deliberate deception.

yieldcrv
0 replies
6h3m

Disagree button

Hoping to get the federal one invalidated as soon as 2024 starts, easier to establish standing in the courts once that law starts.

State level ones may be able to pass muster and be evaluated independently, but NY was already unattractive place to form LLC’s and not seeing the difference here. The states compete with each other for business so it just makes other states more attractive.

Maybe certain industries need beneficial owner information. But all LLC’s by mere nature of existing? No

brtkdotse
0 replies
10h36m

The secrecy around privately held companies seems so… childish and petty.

suby
28 replies
18h56m

She also (previously) watered down the right to repair bill. She is... not the best.

https://www.engadget.com/new-york-right-to-repair-law-kathy-...

r00fus
26 replies
18h29m

There's a reason she almost lost to the extremist Zeldin. She's completely owned by Wall Street.

matrix87
13 replies
17h32m

This is the danger of having shitty gop candidates, then the dems can roll with some uninspiring, corrupt, hillaryesque candidate like Hochul and manage to hold onto power. When one party gets shittier, it allows the other one to get shittier as well

akira2501
12 replies
16h42m

This is the danger of a two party system. They both have an incentive to disenfranchise voters, because our great loophole is that, a "no" vote actually does not count in any meaningful way.

So, if you can get 50% to 75% of the eligible population to not vote, then it becomes much easier to maintain power without actually having to take any responsibility for your actions.

It should be that if less than 50% of the eligible population turns out, the election is null, and needs to be re-run. We have a right to say "none of the above" and have it stick. The parties need to bear the costs of creating these terrible ballots and candidates that actually appeal to no one.

lukevp
5 replies
16h13m

Our HOA elections are unable to proceed without a defined quorum, yet the US has no such rules… strange! I think first past the post is a big part of the issue though, and am holding on hope for ranked choice voting to expand

Dalewyn
4 replies
15h1m

Two things:

* Abstention from voting or refusing to vote are a form of political expression. Mandating that everyone must vote is an attack on freedom of speech and expression and will not fly.

* Ranked Choice and all the other alternatives often floated run afoul of the most basic criteria: They are complicated. The people either will not or cannot understand and consequently will not tolerate complicated voting schemes. Anything more complicated than "<XYZ> gets my vote." is impractically useless. FPTP remains popular because it is fucking simple enough that anyone can understand it, that it's also generally beneficial to the political parties is merely a side effect.

hedora
1 replies
14h11m

Ranked choice isn’t that complicated, but anyway, Australia has a reverse poll tax (they fine you for not showing up, but you can turn in a blank ballot for free).

Apparently <crude drawing of penis> is a perennially competitive write in candidate.

It still seems better than the US system (especially vs. here in California, where we have a one party system, and primaries are often uncontestable).

throwup238
0 replies
13h38m

> It still seems better than the US system (especially vs. here in California, where we have a one party system, and primaries are often uncontestable).

Huh? California has had jungle primaries for years. The top two candidates with the most votes in the primaries run in the general election, even if they're both from the same party. That makes the primaries a lot more competitive than usual like when Kevin de León (D) ran against Dianne Feinstein (D) for the US Senate seat in 2018.

The only chance Republicans even have of running against a Democrat is when the Democrat is so popular that no one bothers running. This past gubernatorial election, the next closest Democrat won 50x less votes than Newsom so Brian Dahle (R) got to go to the general election with only 17% of the total turnout (Newsom had 56% in the primaries and won the general with 59%).

Ever since we managed to extricate the GOP from state government, one party rule has been going pretty well. Not perfect, but a lot better than the "bipartisan" shit show Davis and Arnold left us.

spaceribs
0 replies
14h47m

I actually think STAR voting has a chance. The complexity is limited to how things are tabulated, who can't understand a 5 star rating system?

skissane
0 replies
13h51m

Ranked Choice and all the other alternatives often floated run afoul of the most basic criteria: They are complicated. The people either will not or cannot understand and consequently will not tolerate complicated voting schemes.

Australia has had "ranked choice voting" ("preferential" is what we call it here) for over a century now - starting with the 1919 Australian federal election. If Australians can "understand" and "tolerate" it, why not Americans too?

Anything more complicated than "<XYZ> gets my vote." is impractically useless.

In America, campaign signs say "Vote For Whoever". In Australia, they say "Vote 1 For Whoever" instead. No real difference. Some people just fill out the rest of the boxes randomly, some people follow a "how to vote" card issued by their preferred candidate, some people think hard about who gets their 2nd/3rd/4th etc. Some Australian states now have "optional preferential", where your vote is still valid even if you don't make a 2nd/3rd/etc choice.

yummypaint
2 replies
14h22m

Ranked choice voting solutions are the way out

judge2020
1 replies
13h38m

Good luck getting that in the constitution when all the leaders who'd vote on the amendment would be directly burdened by its passing, and trying to educate your average voter on how it works.

chimeracoder
0 replies
12h43m

Good luck getting that in the constitution when all the leaders who'd vote on the amendment would be directly burdened by its passing, and trying to educate your average voter on how it works.

Actually, NYC is the largest jurisdiction in the country with ranked choice voting.

The problem is that governor is a statewide race, and there are no statewide ballot initiatives in NY. Any ballot initiatives on the state ballot are for issues that the legislature has already approved, as opposed to initiatives that can be brought independently of the legislature.

ryukoposting
2 replies
16h12m

So, if you can get 50% to 75% of the eligible population to not vote, then it becomes much easier to maintain power without actually having to take any responsibility for your actions.

Except, this isn't actually the strategy employed by Dems in several battleground states. Growth in voter turnout has correlated with strong outcomes for democrats pretty reliably over the last 10 years, at all levels, especially in the rust belt.

akira2501
0 replies
16h9m

Will you point me to a dataset that demonstrates this? I've looked at state level data for a few states, and while I have seen higher turnout in Presidential elections, I see very low and declining turnout in those Primaries which I think just causes the same problem and allows the general election turnout to mask this problem.

Then, looking at off year and congressional elections, the data is much less hopeful. It's almost _always_ the case that you see less than 50% eligible, and even less than 50% _registered_ turnout.

TylerE
0 replies
16h8m

That’s because it’s the Republicans who are by the far the worst offenders. Lately there been steam rolling far right people inyo places like achool boards in off years.

xyzelement
11 replies
18h8m

Does it work for you to slap a word on someone instead of an argument? Dude got 47% of New York’s vote. Any chance you are the extremist?

o11c
5 replies
17h50m

It's not just a word; you can look at his record of attempting to overthrow democracy (regarding January 6).

If overthrowing democracy is no longer considered extremist, what is?

chasil
2 replies
17h16m

This is his wiki. There are a few things that surprised me, but I know far more extreme positions than his on both sides.

https://en.m.wikipedia.org/wiki/Lee_Zeldin

kevin_thibedeau
1 replies
14h37m

No election denier is fit for public service. That is an automatic disqualifier.

hedora
0 replies
14h8m

It’s pretty sad that so many candidates should obviously be disqualified for sedition these days, and also that the law isn’t being enforced against them.

peyton
0 replies
17h17m

Never even heard of this guy despite living in New York. Tuned out last couple elections. I think it’s better we all move on from this kind of super-divisive rhetoric because eight years later, nobody’s listening. It’s not moving the country forward.

Looks like he’s a reservist in the Army—I trust their disciplinary process.

I just don’t see how any of this is relevant to the issue of noncompetes in New York. I find the Governor’s position very reasonable for the industries in this state—above a certain level, people can negotiate for themselves.

MiguelX413
0 replies
16h46m

Nor is it a particularly bad word. I'm an extremist, who cares?

jrflowers
1 replies
17h19m

I like this reasoning. If a lot of people vote for something, then it is moderate. For that reason extremism doesn’t exist and has never been the basis for a government

yummypaint
0 replies
14h9m

Democracies are more than what is popular at the moment. In the US we have a constitution which lays out and defines how the government runs, what people's rights are, etc. There are also less formalized but important norms like the peaceful transfer of power between elected officials. Moderates disagree with each other but ultimately respect and steward these core elements.

People who seek office with the intention of doing unconstitutional things are extremists. People who want civil war are extremists.

WarOnPrivacy
1 replies
17h34m

Does it work for you to slap a word [extremist] on someone instead of an argument?

Zeldin voted for Jared Kushner to receive the Nobel Peace prize. I agree that extremist is a poor fit for that. How is comedic?

In somewhat more seriousness, after the Jan 6 insurgency attempt, Zeldin did finally abandon his previous claims and agree with 50 states worth of judges. Zeldin declared the election winner, the election winner. So belated good on him.

randallsquared
0 replies
17h18m

Kushner's a better candidate than some recent recipients, at least, given his efforts toward Arab normalization with Israel 2017-2020, which went pretty successfully until derailed by the Oct 7 war.

monero-xmr
0 replies
17h56m

Anyone who disagrees with me is an extremist, and likely a fascist anti-democratic lunatic

asah
0 replies
18h34m

Watering down is standard for politicians responding to social change. This is the first step.

LiquidPolymer
17 replies
18h53m

California has banned noncompete clauses since 1872. It doesn't seem to have killed innovation or destroyed businesses.

SamoyedFurFluff
6 replies
18h40m

California doesn’t survive on finance, which is much more woo and social network effects. Who leaves where makes way more waves.

kstrauser
5 replies
18h23m

California doesn’t survive on finance

You’ve gotta be kidding me.

smabie
4 replies
18h8m

Not that many trading firms / hedge funds in California

radicaldreamer
1 replies
17h43m

This is more of a function of where these industries developed historically and not tied to non-competes. There’s a lot of financial innovation in California (see crypto/fintech) but trading itself is still tied to proximity and network effects and historical entities (broker dealers etc.)

eesmith
0 replies
11h28m

See also Hollywood accounting. Return of the Jedi, for example, has never gone into profit.

mike_d
1 replies
13h13m

Venture capital is a fancy word for hedge fund. Pool institutional money and try to do a better job than your peers at picking investments that will yield overall returns for the fund. It only differs in liquidity timeframes.

https://en.wikipedia.org/wiki/Sand_Hill_Road

govg
0 replies
8h38m

Venture Capital and Hedge Funds are similar in the sense of "they both invest money and try to make superior returns". Just like all software is similar since "it uses computation to do useful stuff".

Venture Capital firms rely a lot more on deal flow and network effects. Their focus is usually on early stage private financing. There are certainly hedge funds which also do similar investing, but by and large they don't play a role during the investing process and largely work with public securities and other instruments. This is also why VC and PE industries tend to hire from B schools, and look for backgrounds very different from hedge funds which by and large tend to pick students from more quantitative or scientific disciplines.

bionhoward
4 replies
17h11m

If noncompete is banned in California then how is the OpenAI customer noncompete legal?

https://archive.ph/O9iMu

Their terms are governed by the laws of California. If they can’t apply noncompete to employees then how do they get away applying it to customers?

https://tinyurl.com/cali-openai-complaint

kortilla
3 replies
16h58m

Because customers and clients are not the same at all?

throwup238
2 replies
12h54m

The CA law that bans noncompetes actually says "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." [1]

OpenAI's noncompete is unenforceable if you live in California. However, in eight days (1/1/2024) SB 699 [2] goes into effect, extending that protection to everyone outside the state too and AB 1076 [3] amends the section to read “shall be read broadly," broadening the application of the law even further.

[1] https://leginfo.legislature.ca.gov/faces/codes_displaySectio....

[2] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...

[3] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...

hiatus
1 replies
2h56m

However, in eight days (1/1/2024) SB 699 [2] goes into effect, extending that protection to everyone outside the state too

How can a state unilaterally extend its jurisdiction across state lines?

kortilla
0 replies
1h58m

It’s not, it’s applying it to company’s operating in California. The expansion is to all of their customers/clients.

If the company leaves California then the state has no jurisdiction over their business.

jseliger
3 replies
18h49m

Banning noncompetes is key to California's tech and other industries: https://www.vox.com/new-money/2017/2/13/14580874/google-self...

fragmede
2 replies
15h11m

Which leads to the question, is this ban in NJ good for California?

chaostheory
1 replies
12h10m

It is not.

The more bans on non-competes spread in the US, the more the SF Bay Area loses one of its main competitive advantages.

Silicon Valley would not exist as a tech leader if non-competes were a thing in California

https://en.wikipedia.org/wiki/Traitorous_eight

https://computerhistory.org/stories/spinoff-fairchild/

https://computerhistory.org/blog/fairchild-and-the-fairchild...

lotsofpulp
0 replies
7h47m

I don’t think anywhere in the US has a blanket ban on non competes and protection of an employees’ work like California.

https://law.justia.com/codes/california/2010/lab/2870-2872.h...

https://news.ycombinator.com/item?id=38746969

pyuser583
0 replies
10h45m

Didn’t California ban non-competes “by accident” when it just copied a bunch of New York las back in the 1800s?

jorams
16 replies
18h5m

...signed 42 bills late Friday and vetoed another 43, ... of legislation approved by state lawmakers earlier this year.

It seems to me something is very broken if half the laws approved by lawmakers are getting vetoed by the governor. Is that normal for states? Does this not lead to an extremely inefficient lawmaking process?

TheCaptain4815
4 replies
17h44m

Yes, it’s by design through checks and balances.

lolinder
3 replies
17h14m

Checks and balances are important, but half of all bills failing to make it through the governor's office is enough to raise an eyebrow even for someone who's a fan of checks and balances.

The NY governor just vetoed more bills in a single sitting than all of George W. Bush, Barack Obama, Donald Trump, and Joe Biden did in their full terms combined. That's not just checks and balances, there's something very wrong there.

gopher_space
1 replies
12h44m

How would you tell without reading each bill?

lolinder
0 replies
12h36m

It's not necessarily a problem with the governor, but there's definitely a problem somewhere in the system.

In a functioning government (especially one dominated by a single party like NY is), the legislature and governor collaborate closely as the bills are being developed. The legislature knows in advance what the governor will veto and is typically acting in good faith and won't waste everyone's time by send huge numbers of bills that are doomed.

What's happening here indicates a serious breakdown in communication and trust between branches of government, branches which, again, are ostensibly run by the same party. That's not normal.

couchand
0 replies
15h20m

As you've identified this is not the rational application of checks and balances, this is settling scores and executing vendettas in machine politics. Welcome to New York, baby!

Arainach
4 replies
17h43m

I can't speak to New York, but this isn't uncommon for a few reasons:

1) Statewide and Nationwide elections attract more voters than local elections. This can mean that statewide officials such as the governor are from a party that more state voters support, while the state legislature is comprised of the opposite party, whose voters are more engaged in off years and smaller local elections. Michigan, for example, has had exclusively Democratic US Senators for a long time but the state legislature spent a long time controlled by Republicans.

2) Many state legislatures have appallingly gerrymandered districts to reinforce the party in power. Wisconsin, for instance, is very much a "purple" state (a close mix of Republican and Democratic voters), but its state legislature has Republican supermajorities due to gerrymandering.

couchand
2 replies
15h38m

Those don't describe New York politics in the slightest.

New York's governor has been a Democrat since Pataki gave up the job in 2006. The state legislature has had a Democratic majority since 2011, though for many years a small group of supposed Democrats (supported by supposed Democrat Andrew Cuomo) caucused with the Republicans, giving them control. This history of self-owns by the New York State Democratic Party has nothing to do with the forces you suggest, and are in fact due to run-of-the mill nepotism, corruption, and machine politics.

kevin_thibedeau
1 replies
14h25m

It would be nice if someone could convince Pataki to run again. He had enough desire for a presidential campaign that would never have worked when the national base wants a demagogue. With the younger members of his party modeling themselves after the wrong person, there's an opening for an old guard with experience to have one last go at it.

couchand
0 replies
4h9m

I mean, maybe? The New York Republican Party is such an utter joke I'm not sure it would matter.

TylerE
0 replies
16h42m

Not any more. Wisc SC just threw out the maps

sgift
3 replies
17h45m

Imho, that laws the legislative has voted on can just be vetoed by someone who is the head of the executive is the main problem. But this mix of executive and legislative seems to be normal in the US, so maybe my unease is just based on what I'm used to over here in Germany.

While the President of Germany formally has to accept all laws it's a far less active role. According to the constitution, he's only allowed to not accept a law if he thinks it either was voted on in a process that's forbidden by the constitution or is itself against the constitution. This has happened only nine times since the federal republic exists.

edit: The president is also not the head of the executive, just so no one is confused. The chancellor doesn't have any special role in getting a law accepted.

kortilla
1 replies
17h0m

The legislative can override the executive by a super majority in the US. It’s a good balance IMO.

kmeisthax
0 replies
16h13m

And then the executive can null proc the law.

The only way to make laws that stick is to include a private right of action so that any enterprising / money-grubbing lawyer can make money enforcing the law you wrote.

bombcar
0 replies
17h23m

It's a practical acknowledgment of the reality that if the executive branch declines to execute a law, there isn't terribly much that can realistically be done.

dataflow
0 replies
18h3m

Unfortunately NY isn't really known for efficient government.

couchand
0 replies
15h33m

That is, unfortunately, the recent normal in New York Democratic politics. The machine politicians who reach leadership positions have little incentive to advance popular priorities, and instead use every opportunity to strike back at members of their own party for supposed disloyalties.

Hochul is more or less the same as Cuomo, unfortunately.

cogman10
12 replies
18h1m

Can anyone here argue why any state should allow noncompete clauses? It seems like something that solely helps business owners and nobody else.

Plasmoid
4 replies
16h30m

The argument is there is a (narrow) use-case for them.

For example, let's say I'm Bob the baker and I own Bob's Bakery. I sell my bakery to Steve. If I were to then open "Bob's New Bakery" across the street I would have sold Steve a crappy barrel of goods. You can see this in a lot of small service-based business too. So you'll have a non-compete that says you can't open an X within Y miles or Z months.

It's a useful construct for some cases.

JoshTriplett
3 replies
16h24m

That's an argument that they make sense at the sale-of-a-company level, not an argument that they make sense for individual employees or contractors.

randomdata
2 replies
11h40m

They make sense for individual employees because they give an individual employee a leg up over the competition.

Ask anyone bemoaning a non-compete why they signed it. They didn't have to! The answer is always: "I wouldn't have gotten the job without it." Exactly. The job would have still been filled. No company is going to not hire a needed worker just because nobody will sign a non-compete. But the company would have hired an otherwise better candidate instead.

In other words, the person who signed the non-compete gets to screw over other workers now just by giving up a small chance of not being able to do a certain job for some duration in the future. That's a pretty good value proposition.

cogman10
1 replies
7h29m

I had to sign my noncompete 2 weeks after I started working.

Can you not see the huge power imbalance at play? It's not like other employers in my area aren't also requiring them. So my choice was sign it, or lose my current job, not qualify for unemployment, and I'd have to hunt for a new job but not likely one without a noncompete and likely not without moving.

Don't act like "it's a choice" in our industry because the only companies not pushing them are companies in the few states that have outlawed them.

We are in a company store situation "you don't have to work for that coal mine, you could go to the next town over and work for a different coal mine that has the exact same city setup"

ghaff
0 replies
3h31m

Long ago I signed a (fairly limited--almost certainly wouldn't have applied to me) non-compete when my company was acquired. I didn't have one previously; they were far from universal. The choice was sign or be fired. And this was in a time and place and situation where it would certainly not have been a matter of sending a few emails and having multiple job offers the next week.

The acquirer was later one of the big opponents of legislation that would eventually somewhat limit non-competes in Massachusetts.

kortilla
1 replies
16h56m

Things that are good for businesses can be good for society.

Trademark laws seem to be useful. Laws against theft seem to be generally nice. Laws against selling company secrets. Contract laws.

lotsofpulp
0 replies
12h32m

And considering California pumps out the most profitable businesses, then clearly non competes are probably not good for the overall business environment (even if they might need good for incumbents).

JoshTriplett
1 replies
16h26m

https://en.wikipedia.org/wiki/Everything_which_is_not_forbid...

The burden of proof is on "why should a state ban noncompete clauses". As another commenter noted, the default should be to permit voluntary agreements between parties.

There are certainly good arguments for why states should ban them. But that is the position that requires an argument.

Supermancho
0 replies
12h18m

default should be to permit voluntary agreements between parties.

Government protections for wages, liability, and safety don't need additional argument. No need to construct a logical through-line against someone presenting a specious "trickle down economics" assertion. The imbalance in power is already recognized. I don't know who would believe that this decision was anything but corrupt.

randomdata
0 replies
11h54m

They always help a business and the other party signing it. If there was not mutual benefit, there would be no reason to sign the contract.

The state may have concern if that mutual benefit is harmful to the rest of society. A medical doctor, for example, agreeing to not compete could see him no longer able to provide medical services, which could see a third-party to not receive the care they need. As such, the state may find a need to interject to protect the society (i.e. third-parties in need of medical care) it represents.

edrxty
0 replies
17h43m

I think it's a case of people only caring about their specific short term individual interests in the narrowest way possible. They're not really a rational thing in any other domain.

Basically, if you have a zero sum game with two companies and one has better IP than the other, it makes sense for the time span through which the company without can't reverse engineer it. In every other case it means the groups of companies under the umbrella of non-competes will slowly loose to groups of companies in jurisdictions without non-competes.

To expand on that, if you objectively have some special sauce that you don't want leaked to your competition then it's a net gain for you and a loss for the rest of X industry (where X is finance because they're the ones who want this, not tech). In reality though, it's extremely rare to have sole control over an incredibly strong piece of IP that defines a market. In reality, everyone thinks they do because they don't know what anyone else has. Everyone has something that gives them an edge, hence being competitive in the market, but sharing those secrets within their local area can make the whole industry way more performant.

The law applies to everyone so if you can't have non-competes, neither can your competition. At a local level it will make groups of companies much stronger than their more distant competitors because they can share knowledge under the table at a much higher rate.

briHass
0 replies
17h45m

The argument is essentially that a noncompete is a voluntary contract, and generally the courts don't want to prevent individuals from freely entering into agreements. Noncompetes already must have 'consideration', which is typically the employment itself.

tlogan
8 replies
18h22m

Currently, it’s evident that our political landscape lacks genuine representation for traditional leftist (liberal) or right-wing (conservative) ideologies.

Instead, what we’re witnessing are parties primarily aligned with interests of different companies or verticals, overshadowing the core values and concerns of their supposed political spectrums.

cogman10
3 replies
17h52m

This is what happens when politicians aren't accountable to their constituents. The only people most politicians are accountable to are the big businesses that pay for their campaign finances and super pacs.

We desperately need campaign finance reform and strong anti-corruption/bribery laws. After that, voting reform and ranked choice voting would go a long way to making things better.

bugglebeetle
2 replies
17h0m

The Supreme Court has effectively ruled all forms of political bribery to be legal (and engages in it themselves), so good luck with that one.

kmeisthax
1 replies
16h6m

Not just legal, but constitutionally protected free speech. Effectively "repeal the first amendment or accept legal bribery".

soraminazuki
0 replies
1h44m

Paying someone is free speech? I didn't realize I was exercising my free speech rights every time I went to the grocery store. What does speech even mean in that context?

whycombinater
2 replies
16h46m

https://www.cnn.com/2023/10/24/politics/republicans-house-un...

According to billionaire-owned media, the owner of which is owned by a trillionaire investor, you are a conspiracy theorist: both parties work for their constituents.

lotsofpulp
1 replies
12h30m

Who or what entity is the trillionaire investor you are referring to?

whycombinater
0 replies
10m

Your question is a trap. Either you dispute that money=power or you're just waiting to capture my rant on video and find some flaw in it. Good day.

orwin
0 replies
17h25m

I think traditional conservatism in the west is disappearing in profit of neo 'conservatives' (with the exception of Amishs and a few isolated communities in the Appalachians/Pyrenees and probably other very remote areas) where the new ones are virtue signaling more than 16 years old. I still know a few traditional conservatives in my hometown (home village?), but they are really old and the last of their kind in the area.

That's a bit sad because it's the right wing ideology that I respect the most. I think their critics of postmodernity (the condition) are actually accurate and can be worked with (I'm pretty sure baudrillard was close to traditional conservatives towards the end of his life).

mixdup
5 replies
14h37m

Easy compromise on the noncompete front:

* Have an income limit below which it doesn't apply

* Must be tied to some kind of IP or proprietary knowledge. The fact that an exemption on healthcare workers killed the compromise is nuts. Nurses don't have any proprietary information or knowledge that would harm their former employer

* Must be tied to an employment contract--IE no non-competes for at-will employment. Non-competes should be a two-way street, if the employer is going to get the protection of employee retention and IP privacy, the employee should have some protection against being summarily fired (and then unable to get another job)

fragmede
3 replies
14h14m

Nurses don't have proprietary information about the human body at large, but they have proprietary knowledge of the hospitals computer and administrative systems. If you think you own your employees, it's easy to see why they'd want nurses to be subject to non-competes as well.

mixdup
2 replies
13h56m

they have proprietary knowledge of the hospitals computer and administrative systems

The idea that this is competitive information that would harm the former employer if it walked out the door is absolutely insane. it's more likely than not that any two hospitals will be using the same one of the two or three major EHC systems in the market. At any rate, what system they use, and how it's configured is not something that would or could be used against them in the marketplace

vasco
1 replies
8h32m

If you think you own your employees, it's easy to see why they'd want nurses to be subject to non-competes as well.

I think this was their biggest point. I don't think they agree with non competes.

fragmede
0 replies
7h23m

Thank you. I don't personally believe in non-competes, and have the luxury of living somewhere where they're not enforced, but if, as an employer, you believe in non-competes, it's seems obvious that nurses should be just as subject to them as any other field because of their knowledge of the hospitals proprietary systems under that belief system. That's not a general statement on what I believe about non-competes, and the distinction is subtle. Such subtleties are often lost in online discourse.

pgodzin
0 replies
13h3m

Hochul was trying to negotiate an amendment to the bill to limit it to people making under $250k, but the reason it died is because they couldn't agree on the language of what's included (bonuses, equity, etc)

heads
5 replies
16h6m

As an example: if Coca Cola’s secret is worth $100 but the employees are making $1 each then a rival can poach them for $10 and still get a great return. Coke could split the $100 more fairly but Pepsi still only needs to pay $100/N + 1 to outbid for the secret.

Industries based on secret keeping would, over time, corrupt each other out of business until only a few are left. I can see a how the authorities would argue that this eventual monopoly is bad and look ways to artificially put moats around the secrets.

I can also see an argument for this kind of business being allowed to natural cease to exist altogether.

Are Wall St secrets different in some way? I suppose for a start we’re talking about sales Rolodexes and client relationships which are much more readily available than cola recipes. In that example the employee’s network is the business value, so why shouldn’t they shop around and take their clients with them?

Is there a better analogy to help understand the economics of the situation?

ImPostingOnHN
2 replies
15h11m

Stealing or receiving stolen trade secrets is a crime on its own. One of the prescribed penalties is disgorgement of 3x the value of the secrets.

heads
1 replies
9h19m

I suppose therefore that the basis of a non-compete agreement is that an employee will be so saturated with secrets that they couldn’t possibly work for a competitor without implicitly revealing those secrets?

Garden[ing*] leave is the usual solution to this: the employees are paid a salary to stay at home and do nothing during their notice period. They are cut off from the secrets so that by the end of their employment they no longer pose the threat of a leak.

That feels like a fairer deal — are the non competes in NY state a kind that are effectively requiring unpaid gardening leave? That does indeed seem wrong

*I always preferred the British version of this where the City gentleman spends the leave period tending to his roses rather than just lounging around on the lawn, hence gardening rather than garden leave.

ghaff
0 replies
3h23m

While leave arrangements do put some company skin in the game, I'm not sure how I feel about them overall. They make non-competes more palatable but how many employees are really going to be happy with getting some fraction of their total comp for a year or two.

Yeah, there's probably some number of people for whom that fraction to travel the world or work on their startup idea sounds like a really good idea. But there's probably far more who see the potential to derail their career and miss their mortgage payments.

devman0
0 replies
13h5m

You just made a great argument for why Non-Disclosure Agreements should and do exist. This conversation is about Non-Compete Agreements which are entirely separate.

4death4
0 replies
11h40m

I fail to see how the conclusion of your scenario is monopoly power. If anything, it seems like it would create a marketplace with more players because secret knowledge is no longer a barrier to entry.

tchock23
2 replies
15h10m

I’m not a lawyer, but I don’t see the point of non-competes.

Non-solicitation agreements cover not stealing clients or employees after you leave. Non-disclosure agreements cover not sharing non-public information. IP assignment agreements cover assignment of all IP created while being employed.

Why do non-competes need to exist given the above CYA mechanisms that companies already have?

(Edit: the only exception is noted elsewhere in this thread - if you sell your company to another, you shouldn’t be able to turn around and create a competitor right away, but that’s an edge case)

therealdrag0
0 replies
10h21m

Good question. I worked at a company that tried to get everyone to sign noncompetes after a high level sales person left and stole clients. Not sure if consolidation didn’t cover it or if they didn’t have that, and if not why they went with non compete instead.

caskstrength
0 replies
6h30m

I’m not a lawyer, but I don’t see the point of non-competes.

The point obviously is to make it much harder for employees to change jobs and consecutively reduce their wages.

_rm
2 replies
16h23m

What I don't get with non-competes is they effectively keep the employee in obligation to the employer, without keeping the reverse.

At a minimum, they should have to have paid minimum full-time wage continuously up to the point they attempt to enforce it, for it to be enforceable (in addition to the requirements), and if they haven't when they try to enforce it then it should be treated as a breach of labor laws.

SnowflakeOnIce
0 replies
12h0m

I believe MA (which overhauled its noncompete laws a few years back) requires "garden leave" in the case of a noncompete — the employer would have to pay the employee's salary for the period of enforcement.

Broken_Hippo
0 replies
6h38m

Should be a minimum of salary plus benefits plus approximate (or average) bonus.

You shouldn't have to pay more for employer-provided health insurance, for example. You should still get any employer contribution to retirement accounts. You should get an approximation of bonuses you would receive if actively working. And so on.

If a company thinks you are worth signing a non-compete, they should pay like you are still employed. Non-competes should be a burden for the company to discourage their use.

seydor
1 replies
18h27m

vetoes ban on noncompete

That's like, a triple negative

Oarch
0 replies
18h7m

Had to read the comments to figure out which way this went!

mavelikara
1 replies
22m

Non-Disclosure agreements exist. Employers can prevent an ex-employee from harming them with those. Yet, they insist on non-competes. It is amusing to ask oneself why.

I think it is because that employers don’t think that non-disclosures work as well in practice as they do in theory. As in, a person can sign a non-disclosure but if they are allowed to work at a competitors, they may - sometimes without malicious intent - disclose trade secrets that harm the ex-employer.

Which is a legitimate concern.

These same firms set up complicated corporate structures to prove that “barriers” exist between different parts of their business which prevent collusion and market manipulation. Yet, as the LIBOR manipulation scandal proves, these barriers are toothless when it comes to preventing collusion.

I think it is best to state the fears out in the open:

* we don’t trust non-disclosures enough, when a person works at a competitor

* we don’t trust different departments of the same company not to collude to manipulate markets

Etc

scotty79
0 replies
13m

The question is if it's a benefit to the society to have those fears placetated. Or maybe a company that managed to lose an employee should be losing control of whatever the employee knows.

isuckatcoding
1 replies
16h59m

Vetoes ban non (compete). This triple negative is definitely not confusing.

NoboruWataya
0 replies
16h20m

How would you write it? It's not like the Governor "didn't not not" do something. Veto, ban, noncompete all have negative connotations but they are very different concepts so don't just cancel each other out like multiple negatives normally would.

lsllc
0 replies
13h45m

Bought and paid for by our corporate masters. More or less the same thing happened to non-competes in MA.

jmyeet
0 replies
15h7m

Deeply blue states like New York and California don't face a serious threat from Republicans. So what happens? They turn on themselves with sectarian infighting. And there's nothing Democrats in general and New York Democrats in particular hate more progressive candidates.

In a district Biden won by 8 in 2020, George Santos was elected in 2022 when Republicans nationally underperformed. And this is a guy who would've been exposed by a $500 background check. Over $100 million was spent to lose to Lindsey Graham by 10 while nothing was spent on Mandela Barnes in Wisconsin who lost by a mere 20,000 votes.

I mention all of this as context because Democrats are beholden to the same corporate interests. Their goal isn't to make progressive change. It's not even to win elections. It's really just to fund raise off of how terrible the other side is without the responsibility of having to do anything.

My position on noncompetes is a fairly simple one: when you quit, the employer has the option to enforce their noncompete. If they do for whatever the agreed upon period is they pay you 150% of your highest annual total compensation (not just salary) including benefits over the previous 5 years. for that period. Or they can not. It's all or nothing. Failure to pay at any point in that period removes the noncompete from the employer but doesn't discharge the liability. That is, once a noncompete is exercised the employer is on the hook for the entire amount and needs to keep papying on time to keep that noncompete enforced.

Does that sound harsh (on the employer)? It's meant to be. Don't want to pay a noncompete? Then don't enforce it.

carterschonwald
0 replies
14h7m

I’m so disappointed about this.

bigdict
0 replies
15h56m

Not gonna lie, the triple negative tripped me up.

ajb
0 replies
18h41m

Discussion from before the veto: https://news.ycombinator.com/item?id=38316870

JoshTriplett
0 replies
18h42m

Major business interests, including Wall Street firms

This seems like the likely answer. New York has a lot more finance-centric companies than California, and they're going to fight to prevent their employees from being able to go to competing firms.