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Noncompete Agreements, Come On · Stuff You Should Know

0:01
Speaker 1: Welcome to stuff you should know, a production of iHeartRadio. Hey,
0:11
Speaker 1: and welcome to the podcast. I'm Josh, and there's Chuck
0:14
Speaker 1: with me, and that makes this stuff you shouldn't Azzoh
0:19
Speaker 1: that's right, mister dog. Yeah, man, what's that one song?
0:25
Speaker 1: He had? A sensual seduction? What a great song that was.
0:31
Speaker 1: I'm not sure if I know it. Would I know
0:32
Speaker 1: it if I heard it? Probably, but it was like
0:35
Speaker 1: kind of a weird synth dancy early eighties vibe, much
0:40
Speaker 1: more than a rap vibe. He was just expanding out. Yeah, yeah,
0:44
Speaker 1: that's Martha Stewart on it. No, which is kind of
0:47
Speaker 1: surprising because I heard she got like a huge tattoo
0:50
Speaker 1: of him. Really now, it was like a super Bowl commercial.
0:55
Speaker 1: Didn't see it? Yeah she could have, though I'm a rube. No,
1:00
Speaker 1: you're not, Chuck. You just don't pay enough attention to commercials.
1:04
Speaker 1: Should we talk non compete agreements? Yes? I think we
1:09
Speaker 1: should because they turn out to be rather onerous. Yeah,
1:14
Speaker 1: possibly soon to be illegal, yay, and just kind of
1:18
Speaker 1: scummy because, as you'll see, they're frequently used by big business.
1:23
Speaker 1: But if you're a free market capitalist, you're not allowed
1:27
Speaker 1: to like non compete agreements because it literally hobbles competition,
1:31
Speaker 1: which is the point of free markets. And one of
1:35
Speaker 1: the great things about competition is that you and me
1:39
Speaker 1: and everybody else listening out there who doesn't own a
1:41
Speaker 1: business and just buy stuff usually gets better prices, better products,
1:47
Speaker 1: more innovation when there's greater competition. And non competition agreements
1:52
Speaker 1: non compete agreements do the opposite of that. They stifle
1:56
Speaker 1: all those things on purpose for the benefit of just
1:59
Speaker 1: one company. It's right there in the name. They even
2:03
Speaker 1: they gave away their hand when they called them no competes. Exactly.
2:06
Speaker 1: It's pretty flagrant. It is. If you don't know what
2:09
Speaker 1: we're talking about about. One in five Americans work under
2:13
Speaker 1: an NCA, and a non compete is when and hopefully
2:17
Speaker 1: you've never had to sign one of these. Hopefully you're
2:19
Speaker 1: not one of the twenties percent of workers in the
2:23
Speaker 1: United States. But if you are working under one, then
2:26
Speaker 1: you know what it is. It's it's a thing that
2:28
Speaker 1: you sign when you get a job. Usually when you
2:31
Speaker 1: get a job. Sometimes they can come along a little
2:33
Speaker 1: later in the job, if you get like a promotion
2:35
Speaker 1: or something, but it's a condition of getting that job.
2:39
Speaker 1: Most times that basically says, hey, if you work here,
2:43
Speaker 1: you can't go quit your job and then go get
2:47
Speaker 1: a job at another company that's a rival of ours,
2:51
Speaker 1: or you can't run off. And like if you're a
2:54
Speaker 1: if you're a vet, let's say, and you and you
2:57
Speaker 1: help out doggies and kiddies and komodo drags or whatever,
3:01
Speaker 1: you got to sign one that says, hey, you can't
3:03
Speaker 1: go start up your own vet practice. And there's usually
3:06
Speaker 1: a certain amount of time, like six months or three months,
3:09
Speaker 1: or a year or two years generally where it caps off,
3:13
Speaker 1: although I'm sure there's some really draconian ones that stretch
3:17
Speaker 1: on for years and years. Yeah, I've seen five is
3:20
Speaker 1: the highest i've seen, But I'm sure somebody's pushing the
3:22
Speaker 1: mline five years. You can't go make a living and
3:25
Speaker 1: doing what you do exactly, So you can hear by
3:30
Speaker 1: the tone of my voice how I feel about these things.
3:34
Speaker 1: I'm gonna try and be fair. I know you're you're
3:36
Speaker 1: with me. We're pro employee. Yeah, also pro competition too,
3:44
Speaker 1: but okay, go ahead. We're pro employee. So that's kind
3:46
Speaker 1: of where our heart lies. We are employees, so that's
3:50
Speaker 1: why that's where our heart lies. For the most part. Yeah,
3:53
Speaker 1: but having said that, I do get in certain circumstances
3:58
Speaker 1: why businesses draw these up at least as usual, Chuck,
4:02
Speaker 1: I'm right there with you, totally agree. Should we talk
4:06
Speaker 1: about these few reasons? Yeah, there's one other, there's a
4:08
Speaker 1: couple of other things, just to kind of do the
4:11
Speaker 1: outlines of these things. In addition to a length of time, usually,
4:15
Speaker 1: like you said, that you're prohibited from going and working
4:18
Speaker 1: for yourself or competitor, there's also sometimes geographical restrictors, which says,
4:25
Speaker 1: you know, you can't work for a competitor in the
4:28
Speaker 1: same state or something like that. Right, feel free to
4:31
Speaker 1: move completely, upend your life and move time with us,
4:34
Speaker 1: but you can't do it in the state. And then
4:36
Speaker 1: one of the other times it pops up pretty frequently
4:38
Speaker 1: outside of the corporate world, is when say you sell
4:41
Speaker 1: a restaurant, you'll usually sign a non compete that says
4:44
Speaker 1: you're not going to go down the block and create
4:47
Speaker 1: the same restaurant again and compete with the one you
4:50
Speaker 1: just sold, because you know, again, like you said, there's
4:53
Speaker 1: some instances where it does seem okay, and yeah, let's
4:57
Speaker 1: go over some of those. Yeah, one of them is
5:00
Speaker 1: guarding trade secrets. I kind of get where they're coming from.
5:03
Speaker 1: If you have a trade secret that's really valuable and
5:06
Speaker 1: it's something that this company owns or thought up at
5:09
Speaker 1: least or as the IP rights, do, I get why
5:13
Speaker 1: company would not want to say, like, sure, just go
5:16
Speaker 1: quit the job and take those secrets with you to
5:19
Speaker 1: a competitor. Yeah. Like, um, do you remember when those
5:22
Speaker 1: former Coke employees went to Pepsi and said, Hey, we've
5:26
Speaker 1: got Cooke's recipe, you want it? It must have been
5:29
Speaker 1: so surprised when Pepsi called Coke and said, hey, you've
5:31
Speaker 1: got a big problem. That was pretty interesting. But yes,
5:35
Speaker 1: I'm quite sure they signed all sorts of agreements that
5:37
Speaker 1: they violated in doing that. Yeah, and we'll get into
5:41
Speaker 1: the details later on. But you don't necessarily like you
5:45
Speaker 1: can cover trade secrets with by other means rather than
5:48
Speaker 1: just signing a noncompete as an employer. Right. What else? Well,
5:54
Speaker 1: this one I kind of get to to a certain degree.
5:57
Speaker 1: Companies oftentimes will make great investments in their employees to
6:00
Speaker 1: keep them around. Like whether it's just the normal training routine,
6:04
Speaker 1: which you know, I know from Emily just having her
6:07
Speaker 1: small business, it takes a long time to get someone
6:10
Speaker 1: really up to speed, and for someone to either not
6:13
Speaker 1: work out by just organic circumstances or leaving shortly thereafter,
6:17
Speaker 1: it's a big blow, especially to a small business. So
6:22
Speaker 1: I get that. Or they may like further your education,
6:24
Speaker 1: say hey, we'll put you through grad school or something
6:27
Speaker 1: like that, but you got to come take that grad
6:29
Speaker 1: school knowledge and help our business with it. Sure. The
6:32
Speaker 1: point is that you don't want to invest a bunch
6:34
Speaker 1: of time and effort and information into training and employee
6:38
Speaker 1: and have them go take it to a competitor. Yeah,
6:40
Speaker 1: I get that somewhat. There's another one. I'll bet you
6:44
Speaker 1: get this a little less because I do too. Yeah,
6:46
Speaker 1: Like I understand it, I just don't agree with it.
6:48
Speaker 1: And that is to keep bases of clients right. So
6:52
Speaker 1: like if you're if you are, if you cut hair
6:55
Speaker 1: at a hair salon, there's especially depending on the salon,
6:59
Speaker 1: but there's a really good chance that you signed a
7:01
Speaker 1: non compete that says like you probably can't cut hair
7:05
Speaker 1: in the same town right anywhere else. That's a pretty
7:08
Speaker 1: prevalent from what I understand it. Like hair salons, there's
7:11
Speaker 1: other places too that try them, like law firms, sometimes
7:14
Speaker 1: try them VET clinics like you you recommended, But I
7:17
Speaker 1: believe there's also some industries, including attorneys and fiduciaries, that
7:21
Speaker 1: say it's too important for the client to be able
7:24
Speaker 1: to choose exactly who they want for us to have
7:26
Speaker 1: non compete, so they kind of customarily avoid them. Yeah,
7:30
Speaker 1: this is you're on target, because this is the one
7:34
Speaker 1: that I have the one of the most problems with
7:36
Speaker 1: out of these three, because this basically says we can
7:41
Speaker 1: kind of treat you poorly as an employer. Like if
7:45
Speaker 1: you're let's say, if you're a hairstylist and you don't
7:48
Speaker 1: like your situation, but you've got these clients who love
7:51
Speaker 1: the way that their hair is getting cut by you,
7:55
Speaker 1: but you've got some terrible boss. It's a bad agreement.
7:58
Speaker 1: You should be able to go and have those people
8:00
Speaker 1: follow you because they're not there because they like the
8:04
Speaker 1: fit of the chair, right, you know, they're there because
8:07
Speaker 1: they like the haircut that they're getting. Absolutely, it is
8:10
Speaker 1: so hard to find a good hairdresser who charges a
8:13
Speaker 1: reasonable rate. It's really important. I'm not joking right now.
8:16
Speaker 1: I finally found my guy, and like, if he ever leaves,
8:19
Speaker 1: I'm I'm in trouble the same thing with like a
8:23
Speaker 1: dog groomer, Like we've lost dog groomers before, just gone
8:26
Speaker 1: poof vanished. Then the people won't tell us what happened
8:29
Speaker 1: to them or how to get in touch with them,
8:31
Speaker 1: because they want us to stay there. And it's it's
8:33
Speaker 1: you're not only hurting your former employee, you're also harming
8:39
Speaker 1: your customers too, because you might be pairing them up
8:42
Speaker 1: with an inferior dog groomer compared to the person who
8:46
Speaker 1: just left. You know, yeah, I should shout out my
8:50
Speaker 1: hairstylist because it's fairly recent, because I recently in our
8:53
Speaker 1: Amorrow podcast talks about our friend Thomas, who is the
8:57
Speaker 1: father of one of Ruby's friends. Thomas's wife and Ruby's
9:01
Speaker 1: friend's mom is Robin and she is my friend and stylist. Nice. Well,
9:05
Speaker 1: then she's great. I'll shout out Michael, my hair stylist.
9:09
Speaker 1: And if they went to you know, if Robin decided
9:11
Speaker 1: to go to another place, I wouldn't be like, No,
9:14
Speaker 1: I'm really super loyal to the walls of that building
9:19
Speaker 1: that I was in, right, No, I'd follow Robin where
9:22
Speaker 1: she went. Yeah, I agreed, totally. I'd follow Michael to
9:26
Speaker 1: the ends of the yearth So there's another way to
9:29
Speaker 1: look at all this stuff too, Chuck, You're ready. Yeah.
9:33
Speaker 1: People who are pro non disclosure agreements say that these
9:38
Speaker 1: things work in the non competes you mean, yeah, yeah, sorry, man,
9:42
Speaker 1: I just gave away something we're gonna talk about later.
9:45
Speaker 1: People who are in favor of non competes say that
9:49
Speaker 1: the opposite holds true too, where if you take away
9:51
Speaker 1: non competes, then companies might be less willing to invest
9:56
Speaker 1: in their employees because they're going to, um, you know,
9:59
Speaker 1: possible walk off. Um. Yeah, that's that's probably the best
10:04
Speaker 1: argument they have against them. But it's very similar. I
10:07
Speaker 1: was trying to think of an analogy, and the best
10:08
Speaker 1: I could come up with is saying, like, because there's
10:11
Speaker 1: a chance that some of our guys are going to
10:13
Speaker 1: strike out, we're just not going to play baseball, right,
10:17
Speaker 1: you know what I mean? Yeah? Yeah. And then if
10:19
Speaker 1: the whole inherent unfairness of a non compete agreement, by
10:23
Speaker 1: the way, like all the all the pros are done now, Um,
10:28
Speaker 1: if it hasn't become clear yet, you can if you
10:30
Speaker 1: take the business out of it, it becomes much clear. Right,
10:33
Speaker 1: So if you look at your employment between a worker
10:37
Speaker 1: and an employer as a relationship, like between a boyfriend
10:43
Speaker 1: and a girlfriend or something like. If you break up,
10:46
Speaker 1: it's like the boyfriend saying you can't date anybody for
10:49
Speaker 1: a year, or you can't date anybody in this state
10:52
Speaker 1: for a year. Go ahead and move up, end your life.
10:54
Speaker 1: That's fine, but no one in this state you can date.
10:56
Speaker 1: And then it can get yes, that's that's a great point,
11:00
Speaker 1: and then it can get even worse. The boyfriend can
11:02
Speaker 1: dump you and still say you're not allowed to date
11:06
Speaker 1: anybody for a year. Right when I thought of it
11:08
Speaker 1: like this, like I already knew they were inherently unfair,
11:11
Speaker 1: but it really kind of settled in, so I wanted
11:14
Speaker 1: to share that with everybody. That's good. What's interesting, especially
11:18
Speaker 1: when you look at the example of like a hairstylist,
11:21
Speaker 1: is chances are that hairstylist was already a good hairstylist
11:26
Speaker 1: when they started working for that place, and it wasn't
11:29
Speaker 1: kind of how these things started out, which is, you know,
11:31
Speaker 1: segues into the history where you I don't know anything
11:35
Speaker 1: about cutting hair, and I'm just gonna apprentice with you
11:37
Speaker 1: for a while, and you're going to teach me everything
11:39
Speaker 1: I know about how to cut hair, like that's a
11:41
Speaker 1: little more understandable. And that's at least in England. That
11:44
Speaker 1: was the history of non competes was in fifteenth and
11:48
Speaker 1: sixteenth centuries. The way it was set up was there
11:51
Speaker 1: were you know, master craftspeople and then they had apprentices
11:56
Speaker 1: working for them and they would teach them their trade
11:58
Speaker 1: and in turn get a lot of work out of
12:00
Speaker 1: this person, and then they could go on and try
12:03
Speaker 1: to become a mastercraftsman themselves, start up their own you know,
12:07
Speaker 1: habitash or shoe shop or whatever. And early on in
12:12
Speaker 1: for quite a long time, even the courts of England
12:16
Speaker 1: and the laws of England roundly sided with employees when
12:20
Speaker 1: it came to case law, and the very first of
12:23
Speaker 1: which was the Dyer's case of fourteen fourteen, yeah, which
12:27
Speaker 1: established a precedent that lasted for hundreds of years, which
12:31
Speaker 1: is basically there was a dier, you know, fabric dyer
12:34
Speaker 1: in London who had an apprentice and the apprentice was
12:37
Speaker 1: ready to become a journeyman, no longer an apprentice, going
12:40
Speaker 1: off to strikeout and form his own business. And he said,
12:43
Speaker 1: you're not allowed to do this business in London, all
12:46
Speaker 1: of London for six months, and in the fifteenth century
12:49
Speaker 1: it wasn't very easy to move right right, So the
12:52
Speaker 1: guy took him to court somehow in the fifteenth century way,
12:56
Speaker 1: and the court said, we rule against you, die, or
12:59
Speaker 1: we rule in favor of your journeyman apprentice, because they
13:03
Speaker 1: reasoned that the law and custom should keep work in
13:09
Speaker 1: the public domain, labor should be as free to do
13:12
Speaker 1: as much as it can for as many people as possible. Yeah,
13:16
Speaker 1: which makes sense, like maybe there aren't enough talented DIYers
13:20
Speaker 1: in London right now, and for goodness sakes, like the
13:23
Speaker 1: people need their tight eyed frocks, right, Thou blowest my mind.
13:33
Speaker 1: It's good. I was waiting for another wavy gravy joke.
13:36
Speaker 1: I know he's your gut to. He's the only one
13:38
Speaker 1: I can ever think of. And then the other one
13:41
Speaker 1: is that And this is a big part of this precedent,
13:43
Speaker 1: was that someone should be allowed to go make a
13:47
Speaker 1: living doing what they've learned to do, right. And there's
13:49
Speaker 1: something inherent in both of those reasonings that set that
13:52
Speaker 1: legal precedent in that they recognize that a noncompete favors
13:58
Speaker 1: essentially one per in one group, one employer, one company,
14:02
Speaker 1: one business owner at the at the expense of everybody else, right,
14:08
Speaker 1: and they kept that up for hundreds of years. The
14:13
Speaker 1: the what are they called, I guess the guild members
14:16
Speaker 1: who were employing apprentices. Over the years, they employed more
14:20
Speaker 1: and more apprentices as there was more and more people
14:22
Speaker 1: who needed more and more work. So there's more and
14:25
Speaker 1: more attempts. I don't think I could say more and
14:27
Speaker 1: more any more time, but there are more and more
14:30
Speaker 1: attempts I could at creating these um non compete agreements.
14:36
Speaker 1: But the courts kept basically saying nine no, no, although
14:40
Speaker 1: there was one that kind of went the opposite way,
14:42
Speaker 1: which does seem like they made the right decision, but
14:45
Speaker 1: it sent another precedent that actually upholds non competes. Right. Yeah,
14:50
Speaker 1: this is Mitchell versus Reynolds in seventeen eleven, and Reynolds
14:55
Speaker 1: was a baker. This one is. I agree. It's definitely
14:59
Speaker 1: an interest in case because it's not like your standard
15:02
Speaker 1: employee employer kind of thing. Right. M. Reynolds was a
15:06
Speaker 1: baker who said hey, I will lease Hey there, Mitchell,
15:09
Speaker 1: I'll lease you my bakery for five years and you
15:12
Speaker 1: can do all the baking and make the money, and
15:15
Speaker 1: I'm not gonna go start another bakery in this town,
15:17
Speaker 1: which is Saint Andrew's Holborn. And I don't know why
15:23
Speaker 1: I lost the accent halfway through that. And if I
15:27
Speaker 1: violate this agreement, I give you fifty pounds and that's
15:32
Speaker 1: exactly what I'll do, though I will go on to
15:33
Speaker 1: break this deal. I'm gonna sell my stuff in town
15:37
Speaker 1: and my baggetts or what have you. And Mitchell took
15:41
Speaker 1: Reynolds to court and the judge sided with Mitchell in
15:45
Speaker 1: this case. Yeah, because I'm quite sure I get it though.
15:50
Speaker 1: This is this is why, this is why I think
15:53
Speaker 1: it makes sense to us too. Mitchell and Reynolds were
15:57
Speaker 1: um equal parties to this agreement. There was no power
16:02
Speaker 1: position of one over the other. And that's one of
16:05
Speaker 1: the reasons why are so unfair. It's a really powerful
16:09
Speaker 1: entity taking advantage of the last power of the other person,
16:15
Speaker 1: the employee that's on the other side of the equation.
16:18
Speaker 1: In this case, they were equal and the guy broke it.
16:21
Speaker 1: And yeah, he should pay because he agreed to this
16:23
Speaker 1: ahead of time without any kind of of you know,
16:26
Speaker 1: coercion or anything like that. Because Mitchell was able to
16:31
Speaker 1: run this business and do the baking and make money,
16:33
Speaker 1: and Reynolds was getting lease income from Mitchell. Yeah, so
16:38
Speaker 1: he Reynolds was trying to have his cake and eat
16:40
Speaker 1: it too. Basically exactly, he was a real big jerk
16:43
Speaker 1: quad from what I can tell, we bleeped out your
16:48
Speaker 1: first take, which was a cuss word, But jerkwad sounds
16:51
Speaker 1: grosser than what you said. I think jerkwad was better.
16:53
Speaker 1: I made the right decision in retaking that. Things you know,
16:58
Speaker 1: started changing when industrial capitalism became a big thing and
17:03
Speaker 1: the courts started kind of flipping a little bit all
17:07
Speaker 1: of a sudden, they said, wait, this big business and
17:10
Speaker 1: capitalism is great, so we should be a little more
17:13
Speaker 1: pro employer than employee generally speaking. And I think it
17:18
Speaker 1: was basically by the mid eighteen hundreds that they said, hey,
17:23
Speaker 1: we believe in freedom of contract, which basically means if
17:26
Speaker 1: you're both agreeing to this thing, then you should be
17:29
Speaker 1: able to agree to this thing right, which again it
17:32
Speaker 1: makes sense if you're Mitchell or Reynolds, who were on
17:34
Speaker 1: even footing when entering into that contract. But people still
17:38
Speaker 1: use freedom of contract as a defense of non competes.
17:41
Speaker 1: And we'll walk down that path a little more later,
17:44
Speaker 1: I say, Chuck, for right now, let's just go ahead
17:47
Speaker 1: and take a break. Let's do it all right, I agree,
17:50
Speaker 1: let's sign a contract agreed. So all this is going
18:22
Speaker 1: on in England, and at the same time America is
18:24
Speaker 1: doing its thing buying Louisiana, etc. And there wasn't really
18:30
Speaker 1: any big non compete rulings until I think eighteen fifty one.
18:36
Speaker 1: But leading up to that, there's a legal scholar named
18:39
Speaker 1: Aisha Bell Hardaway who Olivia found. Livia helped us with
18:42
Speaker 1: this one, and Yisha Bell Hardaway says that there was
18:47
Speaker 1: still a bunch of like legal precedents and rulings and
18:50
Speaker 1: laws that were established that basically support the idea that
18:55
Speaker 1: non competes are unfair and that people should have the
18:58
Speaker 1: ability to move about from employer to employer until they
19:02
Speaker 1: find a good match um. And that a lot of
19:05
Speaker 1: that came from reconstruction era and the Black Codes and
19:09
Speaker 1: some of the laws that protected newly freed slaves um
19:14
Speaker 1: to from like really um predatory business contracts that like
19:20
Speaker 1: they could they could go to jail if they ended
19:22
Speaker 1: the business, if they stopped working for the person, you know,
19:25
Speaker 1: early they could go to jail for five or ten
19:28
Speaker 1: years or something crazy like that. So the UM, the
19:31
Speaker 1: US government, the federal government started stepping in and creating
19:34
Speaker 1: these laws and including the Thirteenth Amendment that protected people
19:38
Speaker 1: from that, and Hardaway argues that that's kind of a
19:41
Speaker 1: basis for the America's position on non competes. Yeah, like,
19:47
Speaker 1: congratulations on your emancipation. Um, Now you can enter into
19:53
Speaker 1: a work contract that's basically the same thing as being enslaved, right,
19:57
Speaker 1: except you know, you're you're making money, but if you
20:00
Speaker 1: quit your job, you're going to jail, but also making money,
20:04
Speaker 1: but you're making just enough to live. Well, you need
20:08
Speaker 1: your job so badly you are engaged in what's known
20:12
Speaker 1: as wage slavery, where you're so dependent on your job.
20:15
Speaker 1: You're essentially stuck, and your employer can treat you however
20:18
Speaker 1: they want, because number one, you're disposable because there's plenty
20:21
Speaker 1: of other people who need a job. And then secondly,
20:24
Speaker 1: they know that you can't go anywhere. You're stuck. You
20:27
Speaker 1: need this job, and they often mistreat employees. And it
20:30
Speaker 1: still happens today. Yeah, And like in England, early on
20:34
Speaker 1: in the United States, the courts generally were siding on
20:37
Speaker 1: the side of employees. There are quite a few cases
20:40
Speaker 1: that sort of laid out precedent. One was really big
20:44
Speaker 1: in eighteen seventy two. California even way backed then said
20:50
Speaker 1: we're going to be a bunch of liberal hippies and
20:53
Speaker 1: we're going to ban noncompetes altogether. Because here in the
20:56
Speaker 1: United States, if you don't live here, a lot of times,
20:59
Speaker 1: states are free to make their own laws concerning things
21:01
Speaker 1: having to do with their state States Rights, States rights
21:04
Speaker 1: and USA are low key mantra. States Rights. In California
21:14
Speaker 1: was one of the first states to completely or maybe
21:17
Speaker 1: the first state to completely ban noncompetes. Yeah, they said,
21:20
Speaker 1: we don't know who he is yet, but in one
21:22
Speaker 1: hundred or so years, Wavy Gravy's gonna love this. And
21:26
Speaker 1: it went that way for you know, most of the
21:28
Speaker 1: twentieth century. If ncas were allowed, they were pretty limited
21:33
Speaker 1: in their enforcement and usually covered things like we talked about,
21:38
Speaker 1: like trade secret cases and things like that, because you know, enforcement.
21:43
Speaker 1: I didn't know about any of this stuff until you
21:45
Speaker 1: and I entered the world of like signing contracts as
21:48
Speaker 1: podcasters and stuff. I had always just had jobs where
21:52
Speaker 1: you could work and get fired and quit and it
21:54
Speaker 1: was no big deal. But I think you and I
21:57
Speaker 1: learned an awful lot about contract stuff yea, through our
22:01
Speaker 1: work and like how to read them and how many
22:04
Speaker 1: words there are in them, yeah, and how lawyers charge
22:07
Speaker 1: so much money for reading those words imperpetuity, imperpetuity throughout
22:13
Speaker 1: the known universe, throughout the universe. That wasn't one of
22:16
Speaker 1: them once, right, Yeah, So like we couldn't go to
22:19
Speaker 1: Mars and set up of Mars farm and start podcasting
22:23
Speaker 1: about it. No, we'd be served on Mars. But anyway,
22:27
Speaker 1: we learned, and this was shocking to hear of something
22:32
Speaker 1: just called unenforceability of a contract. We kind of thought
22:36
Speaker 1: going into this thing like Rubes like, well, no contracts,
22:39
Speaker 1: that that means you signed a contract. They're like, no,
22:41
Speaker 1: you still got to enforce this. It's just like setting
22:44
Speaker 1: a law. Someone can still break that law. You have
22:48
Speaker 1: to have enforceability. And a lot of times these things
22:51
Speaker 1: were not enforceable in the United States, right, but still are. Yeah,
22:55
Speaker 1: that's absolutely true. But if you are somebody who's like
22:58
Speaker 1: a highly skilled laborer who has access to proprietary information,
23:05
Speaker 1: trade secrets, intellectual property, all just really high level stuff,
23:12
Speaker 1: as far as the corporation is concerned. Very valuable stuff too.
23:15
Speaker 1: If you're one of those workers and you signed a
23:18
Speaker 1: noncompete agreement and you break it, you're probably going to
23:22
Speaker 1: get ruled against depending on the state. If it's a
23:24
Speaker 1: state that allows noncompete agreements, you're probably going to lose
23:28
Speaker 1: that case because the courts have typically said okay. At
23:32
Speaker 1: that level, you can probably hire a lawyer who can
23:36
Speaker 1: explain to you what you're getting into beforehand. You probably
23:40
Speaker 1: have a little bit of leverage where you can say,
23:42
Speaker 1: I don't want to sign a noncompete, I'll give this
23:44
Speaker 1: up instead. Or conversely, you can say, I'll sign your noncompete,
23:49
Speaker 1: but you got my salary by ten percent or something
23:52
Speaker 1: like that. And in that respect, it goes back to
23:54
Speaker 1: the Mitchell versus Reynolds case. These two people, the employer
23:58
Speaker 1: and the employee are on relatively equal footing enough so
24:03
Speaker 1: that they're able to negotiate this non compete, and um,
24:06
Speaker 1: that's why it would be upheld. Typically, that's that's when
24:10
Speaker 1: it actually really makes sense. Yeah, So that brings us
24:14
Speaker 1: to today. Um, Like I said, I think one in
24:18
Speaker 1: five people in the United States work under a non
24:21
Speaker 1: compete um, employers generally over the twenty first century have
24:27
Speaker 1: gained more leverage and more power over workers, even though
24:30
Speaker 1: I think starting in with COVID in twenty twenty, I
24:33
Speaker 1: think there's been UM not, I think like it's been
24:36
Speaker 1: pretty well documented that there's been a shift toward employees
24:41
Speaker 1: gaining a little more power and leverage. Yeah, but that's
24:44
Speaker 1: new because it went the exact Yeah, it went the
24:48
Speaker 1: opposite direction starting around the two thousand and eight financial meltdown. Yeah. Um,
24:52
Speaker 1: there's a guy named Evans Starr who Olivia found that's
24:55
Speaker 1: an economist at the University of Maryland. And as kind
24:58
Speaker 1: of if you just start researching non competes online, you'll
25:01
Speaker 1: see Evans Starr name, Star's name come up a lot.
25:05
Speaker 1: And uh, if you're like a CEO or not a
25:10
Speaker 1: CEO but an executive let's say executive level employee, chances
25:14
Speaker 1: are you're working under a non compete. I think sixty
25:16
Speaker 1: to eighty percent have to sign them, doesn't it. Yeah,
25:21
Speaker 1: I would think it'd be more like eighty to ninety percent,
25:24
Speaker 1: But I mean, who knows where they get these stats.
25:34
Speaker 1: I don't think so. Um, but twenty percent. Uh so
25:38
Speaker 1: sixty to eighty or high level executive level. But twenty
25:42
Speaker 1: percent of all private sector workers are under a non compete.
25:46
Speaker 1: About twelve percent of those make under twenty grand a year. Uh,
25:51
Speaker 1: and this was really surprising. Seventeen percent are in service
25:55
Speaker 1: work and the food and beverage industry. Yeah, and so
25:58
Speaker 1: because there's so many more just like normal everyday employees
26:02
Speaker 1: compared to like higher level executives, and because they've been
26:06
Speaker 1: papering so many employees with non compete agreements that the
26:10
Speaker 1: average person in the United States working under a non
26:14
Speaker 1: compete is an hourly worker making fourteen dollars an hour
26:18
Speaker 1: being forced to sign a noncompete. And I say forced
26:21
Speaker 1: because in the case of m like a high level
26:25
Speaker 1: executive who's able to negotiate or Mitchell and Baker that
26:29
Speaker 1: in this case the employee is not able to negotiate anything.
26:33
Speaker 1: Then the courts typically say, you can sign a noncompete,
26:38
Speaker 1: but the company should give you something in consideration, typically
26:41
Speaker 1: some sort of additional pay or something like that. In
26:45
Speaker 1: the in the world of a fourteen dollars an hour
26:48
Speaker 1: hourly worker who's signing a non compete, the consideration is
26:52
Speaker 1: you get to be employed here. That's that's your consideration,
26:55
Speaker 1: you can get to have this job that is in
26:57
Speaker 1: no way, shape or form equal footing. And that's why
27:00
Speaker 1: so many people pointing to these things and they're like,
27:02
Speaker 1: this is this is jerk quad stuff. Yeah. The New
27:06
Speaker 1: York Times had a big sort of expose in twenty
27:09
Speaker 1: fourteen where it was revealed that and get these jobs
27:13
Speaker 1: long care workers again, hairstylists, summer camp counselors had all
27:19
Speaker 1: signed non compete agreements that was just sort of slipped
27:23
Speaker 1: in with their paperwork, not realizing they'd signed it, not
27:27
Speaker 1: fully explained or maybe explained even at all by their employers.
27:30
Speaker 1: They're just like, here's your start work, just signed here here, here, here, right.
27:34
Speaker 1: And there was a special case I believe that the
27:38
Speaker 1: Huffington Post sort of exposed from Jimmy John's, the sandwich
27:42
Speaker 1: shop where employees had to sign and non compete that
27:45
Speaker 1: said you can't leave Jimmy John's and go work for
27:50
Speaker 1: you know, a sandwich company not to be named. They're
27:55
Speaker 1: say it, really, I'm just going to go take the
27:58
Speaker 1: underground train and leave meeting really any sandwich shop, of course,
28:03
Speaker 1: but I think they mean their main competitor, probably within
28:06
Speaker 1: three miles of any Jimmy John's, not just the one
28:09
Speaker 1: you worked at. And I don't know about their their
28:13
Speaker 1: real estate plan for that company, but I bet you
28:16
Speaker 1: anything part of their strategy is to open their restaurants
28:20
Speaker 1: within three miles one of those other restaurants. Ye, so
28:23
Speaker 1: basically said, I'm sorry if you're a sandwich artist, but
28:26
Speaker 1: you can no longer really do this job right. And
28:28
Speaker 1: I mean this isn't like like people who are sandwich
28:32
Speaker 1: artists typically like need a job. Like there's very few
28:37
Speaker 1: independently wealthy people who go get a job at Jimmy
28:39
Speaker 1: John's because they like making sandwiches during the day. You know,
28:43
Speaker 1: it's a it's a good job. I'm sure it's very fulfilling,
28:46
Speaker 1: but typically when you have that job, you need the job.
28:49
Speaker 1: And so the idea of putting a person in that
28:52
Speaker 1: position into like just hobbling them as far as work
28:57
Speaker 1: goes despicable. Man. I don't know if it's coming across
29:01
Speaker 1: how I feel about non compete, but just every single
29:04
Speaker 1: example just gets me riled up. You know you want
29:07
Speaker 1: to hear something kind of fun. Yeah, Um, Our friend
29:10
Speaker 1: John Hodgeman loves making breakfast sandwiches so much that he
29:16
Speaker 1: spends his summers in Maine and there's a local like
29:19
Speaker 1: breakfast place and he makes he goes there and works
29:23
Speaker 1: occasionally for free. Yeah, just for the love of making
29:26
Speaker 1: breakfast sandwiches. Yeah. But also I don't think you can
29:29
Speaker 1: discount holding court. I think that's part of his compensation. Yeah.
29:35
Speaker 1: And and the T shirt money he gets from my
29:38
Speaker 1: egg sandwich was made by John Hodge. Humorous John Hodgman.
29:42
Speaker 1: That's the sweetest plump. We should point out too, though,
29:45
Speaker 1: by the way, that Jimmy John's did that for a
29:48
Speaker 1: couple of years and then when the state Attorney general
29:51
Speaker 1: started investigating, they dropped that practice. Oh that's good. Sure,
29:55
Speaker 1: nothing like the state investigation to to get you, uh,
29:59
Speaker 1: within the bounds of hic morality and decency. Um. There's
30:03
Speaker 1: also something called a no poach agreement, which came under
30:05
Speaker 1: fire in the two thousand Tents as well. Um, where
30:08
Speaker 1: if you open a franchise, you would probably sign a
30:12
Speaker 1: no poach agreement saying that you wouldn't hire any worker
30:15
Speaker 1: from another store in that company another franchise, say like
30:20
Speaker 1: across town. Right. This is really hard to give examples
30:23
Speaker 1: and not buzz market any companies, you know. Yeah, I
30:27
Speaker 1: think we're doing it though, we're doing okay. So like
30:29
Speaker 1: if you went to um, you know, mister Sandwich and
30:34
Speaker 1: you didn't like your boss there, so you you went
30:36
Speaker 1: to go get hired at another mister Sandwich, if they
30:38
Speaker 1: had a no poach agreement, that second mister Sandwich would
30:40
Speaker 1: say sorry, we can't hire you. Or yeah. Conversely, if
30:45
Speaker 1: you if you run an mister Rose beef sandwich place
30:51
Speaker 1: and you have the meat as an owner, you can't
30:54
Speaker 1: go cheez the uh Fred over there at the Crosstown
30:59
Speaker 1: Mister Roast Beef Sandwich really moves that beef like nobody
31:03
Speaker 1: I've ever seen. This guy settles a beef like a champion.
31:06
Speaker 1: You can't say entice this person by saying, hey, I'll
31:09
Speaker 1: pay an extra buck fifty an hour to make your
31:12
Speaker 1: beef sales over here. Yeah, that would be poaching for sure.
31:15
Speaker 1: And then you can you can thank again state investigations
31:20
Speaker 1: for doing away with this. Largely some of the larger
31:22
Speaker 1: chains said oh, yeah, we shouldn't do that. We're not
31:24
Speaker 1: going to do that anymore. You can call off your
31:28
Speaker 1: state attorneys investigations. So we've been sort of peppering in
31:33
Speaker 1: the I'm against NCAA arguments, there are actual statistics to
31:39
Speaker 1: kind of back up some of the stuff that we
31:41
Speaker 1: feel passionately about. In one case, in the state of
31:44
Speaker 1: Oregon in two thousand and eight, they banned non competes
31:47
Speaker 1: for most workers, but one of the categories was low
31:53
Speaker 1: wage hourly employees that we were speaking about. And mister
31:57
Speaker 1: Starr comes back in the picture and a gentleman named
32:00
Speaker 1: Michael Lipsets of the FTC Bureau of Economists, and they
32:06
Speaker 1: did some statistical analysis and found in an Oregon hourly
32:10
Speaker 1: wages rose two to three percent, not just for people
32:14
Speaker 1: who would signed NCA's but for everybody in the state. Yeah,
32:18
Speaker 1: and they reckon that maybe between fourteen and twenty one
32:21
Speaker 1: percent of people who signed ncas had their Well wait,
32:26
Speaker 1: was it fourteen to twenty one percent of workers? No,
32:28
Speaker 1: that's how Yeah, their wages increase fourteen to twenty one
32:32
Speaker 1: percent for people who had been working under non competes
32:35
Speaker 1: after they were banned, it went right that much. That
32:38
Speaker 1: is a I hate the word whopping so much because
32:44
Speaker 1: I want to do a little tangent here, chuck um.
32:46
Speaker 1: If you use the word whopping in your writing, what
32:50
Speaker 1: you're doing is you're assuming that your readers too stupid
32:53
Speaker 1: to understand that what statistic you've just said is actually
32:57
Speaker 1: like eye popping or like really significant. You're spoon feeding
33:02
Speaker 1: them the fact that, like, hey, this is a really
33:04
Speaker 1: big deal, rather than just letting them figure it out themselves.
33:07
Speaker 1: Are knowing that they probably are going to figure it
33:09
Speaker 1: out themselves, So don't use whopping. But the point is
33:12
Speaker 1: this best statistic is so huge. I will use the
33:16
Speaker 1: word whopping here because it's the true definition of whopping.
33:19
Speaker 1: It's overwhelming. I can barely speak at such a big deal,
33:24
Speaker 1: I think. Instead of writing whopping, though, what you can
33:26
Speaker 1: do is say, get a load of this and then
33:30
Speaker 1: have a little button you click that goes, damn yeah,
33:34
Speaker 1: how about this for a whopping statistic? Though, to sort
33:37
Speaker 1: of button up on the stats. The FTC has estimated
33:41
Speaker 1: that if they eliminated ncas all across the country I
33:45
Speaker 1: guess federally, or if every state did, it would generate
33:49
Speaker 1: new job opportunities for up to thirty million workers and
33:53
Speaker 1: raise wages by three hundred billion dollars. Yeah for those workers. Basically,
33:58
Speaker 1: that's not even spillover stuff from what I understand. And
34:01
Speaker 1: there's another little stat from that same FTC study that
34:04
Speaker 1: if you eliminate eliminated non competes for doctors, healthcare costs
34:10
Speaker 1: would go down by about one hundred and forty eight
34:12
Speaker 1: billion dollars too. Wo Yeah, which is another problem in
34:15
Speaker 1: and of itself. Doctors who signed non competes can't move
34:18
Speaker 1: from hospital to hospital, and so hospitals can basically hoard
34:22
Speaker 1: um medical talent while other hospitals are starving for it.
34:26
Speaker 1: Because these doctors have non competes, they can't just go
34:29
Speaker 1: to this other hospital that really needs their help. And
34:32
Speaker 1: that's that's a problem too. I Mean it's bad enough
34:34
Speaker 1: with like franchises of Mister Sandwich. When it's hospitals preventing
34:38
Speaker 1: doctors from going to heal the sick, that's a huge
34:41
Speaker 1: problem as well. Yeah, if you're arguing against NCAA's California,
34:46
Speaker 1: like I said, was very early to get on that
34:49
Speaker 1: anti nca train, people will often point to California and
34:52
Speaker 1: especially the tech industry. Like in twenty fourteen, the state
34:57
Speaker 1: of Massachusetts said should we ban non pizza or not?
35:00
Speaker 1: They eventually did in twenty eighteen, but they said one
35:03
Speaker 1: of their arguments was look at California. Yea, Like back
35:06
Speaker 1: in the seventies, we were on par with like the
35:10
Speaker 1: Boston areas, on par with San Francisco as far as
35:13
Speaker 1: tech development, and the fact that we had non competes
35:17
Speaker 1: really hindered us. And look at what happened in California.
35:20
Speaker 1: It's now that the tech capital of the United States,
35:22
Speaker 1: if not the world, Northern California and Silicon Valley and Boston,
35:27
Speaker 1: you know, didn't fall off the map. There's still good
35:29
Speaker 1: tech there, but it didn't become what California did. No,
35:32
Speaker 1: because the ncas were so efficiently enforced that when you
35:36
Speaker 1: signed on for a company, you're like, well, I'm here
35:38
Speaker 1: for the rest of my career. Yeah, and ideally you
35:41
Speaker 1: know the company would take care of you for the
35:43
Speaker 1: rest of your career. So there was a trade off
35:45
Speaker 1: for that, but that just meant that there were no
35:47
Speaker 1: people jumping chipping, like starting their own companies, and they
35:51
Speaker 1: were doing that in Silicon Valley. I say, we take
35:53
Speaker 1: a break. But I've got two more arguments against non competes.
35:58
Speaker 1: So one is that it stagnates job churn. And job
36:02
Speaker 1: churn is people being able to move from employer to
36:04
Speaker 1: employer until they find the right fit. Because ideally every
36:07
Speaker 1: worker and every employer would fit and work together well,
36:11
Speaker 1: which would raise general productivity through the roof. Of course,
36:15
Speaker 1: if that were able to be done, and job churn
36:18
Speaker 1: is how that happens. And then in a related way,
36:21
Speaker 1: if people are allowed to just jump ship from a
36:24
Speaker 1: terrible company, that company is bound to basically say we
36:28
Speaker 1: need to figure out what's wrong with us and get better,
36:31
Speaker 1: or else we're going to not be competitive anymore and
36:34
Speaker 1: our company is going to go under. If you force
36:37
Speaker 1: everybody to stay aboard the sinking ship through non competes,
36:41
Speaker 1: there's no way to do it. No. Plus, I mean,
36:43
Speaker 1: you're just basically stagnating your company and the careers of
36:46
Speaker 1: the people who are on board. Yeah, you keep people
36:49
Speaker 1: by being a great company to work for it exactly
36:51
Speaker 1: you done by holding them hostage because their name is
36:54
Speaker 1: on a piece of paper. I'm glad you said it. Man,
36:56
Speaker 1: that's a great time for a break. All right, We'll
36:58
Speaker 1: be right back, all right. So early on you said
37:29
Speaker 1: that's the last argument for NCA's um. That's not entirely true.
37:33
Speaker 1: But there is one group who would say that ncas
37:36
Speaker 1: are great, and that is the US Chamber of Commerce.
37:40
Speaker 1: And they say that one of the things that we
37:43
Speaker 1: m we didn't like completely quash, but they say, hey,
37:46
Speaker 1: when you sign a noncompete, that means you're probably getting
37:50
Speaker 1: something good back in return to which means it's equal footing.
37:53
Speaker 1: And like you said earlier, unless you're like a really
37:56
Speaker 1: top tier echelon person who's able to negociate, like hey,
38:01
Speaker 1: a twenty five percent bump and salary to sign this thing,
38:05
Speaker 1: then you're probably not geting getting nothing in return. Yeah,
38:07
Speaker 1: you're just getting the job and shut up and be
38:09
Speaker 1: happy that you even have a job. Get to work, basically.
38:13
Speaker 1: Another one is that that thing that you and I
38:16
Speaker 1: agreed on that companies would probably be a little more
38:20
Speaker 1: likely to invest in their workers if they have a
38:24
Speaker 1: good sense that their workers aren't going to just leave
38:27
Speaker 1: for their competitors. Yeah, that holds up, But it only
38:30
Speaker 1: holds up to a certain extent, because if you invest
38:33
Speaker 1: in your workers and like really good training, what you're
38:36
Speaker 1: doing is producing an employee who understands your product, understands
38:40
Speaker 1: how the business goes, understands their department really well. So
38:43
Speaker 1: they're probably really good at customer service. They know what
38:46
Speaker 1: they can and can't promise, They understand what can be
38:49
Speaker 1: replaced with what they're just they know what they're doing,
38:52
Speaker 1: and so productivity goes up, which means that by training
38:55
Speaker 1: that worker, you're actually making your money back. And then
38:58
Speaker 1: some there's a return on investment, and that usually comes
39:01
Speaker 1: pretty quickly after they come on board and are brought
39:04
Speaker 1: up to speed and become productive. So after throughout the
39:08
Speaker 1: life of that person's employment with you, you made your
39:11
Speaker 1: money back, and say like the first quarter of that time,
39:14
Speaker 1: the rest of it is just profit from that higher productivity.
39:17
Speaker 1: So it does hold up. The argument does hold up,
39:19
Speaker 1: but it only holds up so far, right, And then
39:22
Speaker 1: one other thing is that the Chamber of Commerce likes
39:25
Speaker 1: to do that freedom of contract thing where they're like, hey,
39:29
Speaker 1: we should not be treading on employees rights as adults.
39:32
Speaker 1: They say this, sometimes assign whatever contract they please, and
39:37
Speaker 1: they leave out of it entirely the imbalance of power.
39:40
Speaker 1: But that's one of the that's one of their talking
39:42
Speaker 1: points as well, typically freedom of contract. Yeah, we mentioned,
39:46
Speaker 1: and you sort of inadvertently teased earlier, other kinds of agreements,
39:50
Speaker 1: and we mentioned these because a lot of these are
39:53
Speaker 1: workarounds to just signing a full non compete, like the
39:57
Speaker 1: trade secret thing that we mentioned, you can sign a
40:00
Speaker 1: nondisclosure agreement or an intellectual property agreement. In the case
40:04
Speaker 1: of nondisclosure, it means you can't disclose stuff that went
40:08
Speaker 1: on at your company, like we can't you know, in
40:11
Speaker 1: the case of like podcast networks, you couldn't jump to
40:13
Speaker 1: another podcast network and say, oh, well, this is how
40:16
Speaker 1: we do our ad sales or whatever. You can't do
40:21
Speaker 1: that because you signed an NDA. But that's not the
40:25
Speaker 1: same thing as a noncompete. You can still go get
40:27
Speaker 1: that job with IP property or intellectual property agreements. That's
40:32
Speaker 1: obviously if you work for that company and you come
40:35
Speaker 1: up with an idea while you're working for that company,
40:37
Speaker 1: they basically own that idea. Another one is a non
40:40
Speaker 1: solicitation agreement, which is sort of like a non poaching thing,
40:45
Speaker 1: which means you can't go out and like if we
40:48
Speaker 1: went and started our own podcast network, we couldn't just
40:51
Speaker 1: sign all of our friends that we've worked with for
40:53
Speaker 1: twenty years, right, or you know, get all the customers
40:56
Speaker 1: or something that we've been interacting with the salespeople for
40:59
Speaker 1: whatever company we work for. Yeah, but here's the thing
41:03
Speaker 1: with some of these, like like I have a friend
41:06
Speaker 1: who worked for someone doing a service as the employee,
41:10
Speaker 1: and I don't want to get too specific, but the
41:14
Speaker 1: employer like usually when you're like, you know what, I
41:16
Speaker 1: could do this and I'm better at it, and I
41:19
Speaker 1: could do better at it, and the clients will follow me.
41:23
Speaker 1: Usually you're doing that because the situation you're in stincts,
41:27
Speaker 1: you know, like you got an owner that's not treating
41:29
Speaker 1: your right or an owner that doesn't do any of
41:31
Speaker 1: the work and they're just sitting back and collecting checks
41:34
Speaker 1: while you're doing everything right. Usually, I mean sometimes people
41:38
Speaker 1: it's just like got a great situation and they're like,
41:41
Speaker 1: you know, I would like to do this myself as well.
41:43
Speaker 1: That does happen. I'm not saying it doesn't, but it's
41:46
Speaker 1: usually because like it's a bad employer and a bad
41:49
Speaker 1: business to begin with the other way. It's got to
41:52
Speaker 1: be so frustrating too. If you're working under a non compete.
41:55
Speaker 1: Is if you have this great idea and you do
41:57
Speaker 1: what you're supposed to do in that situation as an employee,
42:00
Speaker 1: and you take it to your employer and say, let's
42:03
Speaker 1: do this. This is going to make the company a
42:05
Speaker 1: bunch of money, and they're like, nah, it's not worth it,
42:07
Speaker 1: and so your idea just dies. Then people like you
42:11
Speaker 1: and me, we suffer for that because we miss out
42:14
Speaker 1: on the amazing innovation or that extra competition that drives
42:18
Speaker 1: prices down a little bit. It has a huge kind
42:21
Speaker 1: of society wide effect. Yeah, for sure. I guess the
42:26
Speaker 1: last thing we should mention is the pay not to play.
42:28
Speaker 1: It's also called the garden leave, like you're taking time off,
42:31
Speaker 1: it's into your garden. This is when an employee leaves
42:34
Speaker 1: and a company might say, hey, don't go work for
42:38
Speaker 1: a competitor for six months, but we'll pay you for
42:41
Speaker 1: those six months. Yeah. It's often something like fifty percent
42:44
Speaker 1: of the salary that you have over the last two
42:46
Speaker 1: years or something. Yeah, exactly, which is pretty sweet. And
42:49
Speaker 1: again that's consideration in exchange for signing a non compete,
42:53
Speaker 1: which makes or you might get bought out of a
42:56
Speaker 1: contract or something like, hey, we'll just buy you out
42:59
Speaker 1: of your contracted but you can't go work for anyone else. Yeah, so, chuck,
43:03
Speaker 1: there's if you weren't like Boo, I hate non competes
43:06
Speaker 1: before prepared to join the wagon or jump on the wagon. Yeah,
43:11
Speaker 1: the bandwagon. Some companies, including companies in California still use
43:18
Speaker 1: non competes. They still make their employees sign them. And
43:21
Speaker 1: they do this because they can still threaten their employees
43:25
Speaker 1: with a lawsuit for breaking this noncompete that's illegal to
43:29
Speaker 1: begin with, because they know their employees either number one,
43:33
Speaker 1: don't know that non competes are unenforceable in some states YEA,
43:37
Speaker 1: or number two, even if they do know that, don't
43:40
Speaker 1: have the means to defend themselves, to hire a lawyer
43:42
Speaker 1: to defend themselves, even if they're on the right side
43:45
Speaker 1: of the law. That is despicable. It is as is
43:50
Speaker 1: using saying like, all right, we don't have a non compete,
43:53
Speaker 1: but we're going to draw up our non disclosure agreement
43:57
Speaker 1: or non solicitation agreement so broadly that it's basically a noncompete. Right.
44:02
Speaker 1: So because of this, because that's becoming more and more common,
44:05
Speaker 1: and apparently also there's a twenty twenty two article and
44:09
Speaker 1: Benefits pro the Employment Benefits trade magazine of Record that
44:15
Speaker 1: said that more employers are more and more frequently turning
44:19
Speaker 1: to threatening lawsuits over non competes because they're they're low
44:24
Speaker 1: on workers. Because it's a it's a it's a worker's market,
44:28
Speaker 1: right now it's not an employer's market anymore. So to
44:31
Speaker 1: keep people employed, they're threatening to see their own employees basically, yeah, uh,
44:36
Speaker 1: and this is you know, I'm not sure if you
44:38
Speaker 1: picked this one for this reason, but this is a
44:41
Speaker 1: hot topic right now, largely because of what's been going
44:44
Speaker 1: on with employees getting more rights. And there's a new
44:47
Speaker 1: proposal as of just last month in January twenty twenty
44:51
Speaker 1: three from the FTC that would ban noncompetes altogether basically
44:56
Speaker 1: and avoid the ones that are currently in plays, which
44:58
Speaker 1: would be a huge d Biden signed an executive order
45:02
Speaker 1: in twenty twenty one that encouraged the FDA to band
45:06
Speaker 1: and limit them. And yeah, the FTC, and it basically
45:09
Speaker 1: says that it forbids you from using these and you
45:14
Speaker 1: have to like let people know. You know, in the
45:17
Speaker 1: case you were talking about in the California where they
45:20
Speaker 1: basically signed them and didn't know, you have to let
45:22
Speaker 1: these employees know that they're under a noncompete and be
45:25
Speaker 1: like really clear with the language, right you, Well, you
45:28
Speaker 1: also know no, and it's not valid anymore. Right, it's
45:32
Speaker 1: saying like you can't you can't have them. Not only
45:34
Speaker 1: can you not sign somebody under a noncompete agreement, like
45:38
Speaker 1: you have to let them know that the ones that
45:39
Speaker 1: you used to have that we're valid, are not valid
45:42
Speaker 1: any longer. They've been outlawed. Yeah, like they shouldn't have
45:46
Speaker 1: to go pay an attorney to tell them that exactly.
45:49
Speaker 1: And it even goes even further. So some of those,
45:51
Speaker 1: like um other types like a non disclosure agreement that
45:54
Speaker 1: can be so broad it's effectively and noncompete those are
45:58
Speaker 1: those are basically outlawed as well. It's a huge idea,
46:02
Speaker 1: And right now they're taking public comments through March twentieth.
46:06
Speaker 1: So if you're like, I, here's ours exactly. If you're
46:09
Speaker 1: like I don't really feel good about non disclosure agreements
46:13
Speaker 1: or non competes, then you can go leave your remarks.
46:17
Speaker 1: The Chamber of Commerces said we're gonna sue you. FTC.
46:20
Speaker 1: You can't do this, and the FTC said, oh, yes
46:23
Speaker 1: we can. So we'll see what happens, either with the
46:26
Speaker 1: FTC directly doing it, or if the FTC finds out
46:30
Speaker 1: that their hands actually are tied. Congress might actually step in.
46:34
Speaker 1: There was a bipartisan bill that was introduced in twenty
46:36
Speaker 1: twenty one that basically by by partisan. I know, if
46:41
Speaker 1: you completed us it's a very strange sounding word. I'm
46:43
Speaker 1: glad you brought up where I got this idea, because
46:46
Speaker 1: it turns out I got this idea from um. She
46:48
Speaker 1: sent me an article about this FTC proposal and how
46:51
Speaker 1: it would save three hundred billion or create three hundred
46:54
Speaker 1: billion in salary. Just pretty was the subject line to No.
47:00
Speaker 1: She said, check out this whopping stat right, it's like
47:04
Speaker 1: the old click date. Yeah, exactly. You won't believe number eight.
47:10
Speaker 1: He got anything else? Uh no, just a listener mail. Okay, Well,
47:14
Speaker 1: since Chuck just mentioned listener mail, that means it's time
47:16
Speaker 1: for listener mail. That reminds me of The Simpsons. Yeah,
47:22
Speaker 1: I know exactly, Harmon Tansyrian, And now i'd like to
47:26
Speaker 1: introduce your new Principal Skinner. Principal Skinner. I thought you
47:30
Speaker 1: were gonna say you remember our friend Brian, the sound
47:33
Speaker 1: guy from the TV show. Oh sure, Every once in
47:35
Speaker 1: a while he emails me just one line from The Simpsons.
47:39
Speaker 1: Really walk into the bar and there's tons of carbon
47:42
Speaker 1: monoxide in the bar, and everybody's passed out, and the
47:45
Speaker 1: guy says, man alive. There are men alive in here.
47:50
Speaker 1: Brian texts me every now and then. He's a talented
47:53
Speaker 1: musician in the band The Georgia's Soul Council. Yeah, that's right,
47:58
Speaker 1: he's a great guy too. Go see him all right,
48:01
Speaker 1: here we go, new mom life saver. Well, just like
48:04
Speaker 1: these little nice emails every now and then. Hey, guys,
48:07
Speaker 1: my now husband introduced me to your show during the
48:09
Speaker 1: infamous spring of twenty twenty, and I've enjoyed hours of
48:12
Speaker 1: educational entertainment since then. We welcomed our little boy, Ronan
48:16
Speaker 1: into the world in December, and I'm working on turning
48:19
Speaker 1: him into a fan as well. Stuff you should know
48:21
Speaker 1: has been part of his life since he was a
48:23
Speaker 1: wee embryo. We listened to a lot of podcasts during
48:26
Speaker 1: my pregnancy. Certainly some of it made it through all
48:29
Speaker 1: that amniotic fluid. I'm currently on maternity leave with him
48:33
Speaker 1: and we are continuing to listen to the podcast together.
48:36
Speaker 1: Have a lot of fun choosing episodes for us to
48:38
Speaker 1: listen to. I hope I think I'll do a great
48:40
Speaker 1: job sharing information with folks in an accessible and inclusive way,
48:44
Speaker 1: and hope that maybe some of this information sticks in
48:47
Speaker 1: his subconscious Nothing else hearing else voices and the positivity
48:51
Speaker 1: behind them is great for his brain development. And Mom
48:54
Speaker 1: gets entertainment too, so everyone wins. Thank you for making
48:58
Speaker 1: these hectic days and long nights of new parenthood more
49:01
Speaker 1: bearable and for teaching both of us something new every episode.
49:05
Speaker 1: Yours truly, it's a great way to sign up. Email.
49:07
Speaker 1: By the way, classic Heather and Ronan Man. Apparently dad
49:12
Speaker 1: doesn't get any mentioned except turning her onto this thing
49:15
Speaker 1: to be in with. He's the og. That's right. That
49:18
Speaker 1: was an amazing email. Thanks Heather and Ronan. That was great. Wow,
49:22
Speaker 1: thanks to Ronan's dad. Yeah, big thanks to Ronan's nameless dad.
49:28
Speaker 1: If you want to get in touch with us, like
49:30
Speaker 1: Ronan's nameless Dad's wife Heather did, you can do it
49:35
Speaker 1: by email, Wrap it up, spank it on the bottom,
49:37
Speaker 1: and send it off to Stuff podcast at iHeartRadio dot com.
49:44
Speaker 1: Stuff you Should Know is a production of iHeartRadio. For
49:47
Speaker 1: more podcasts my heart Radio, visit the iHeartRadio app, Apple Podcasts,
49:51
Speaker 1: or wherever you listening to your favorite shows.