The fine print that follows you out the door: non-compete clauses are spreading(oecdecoscope.blog)
oecdecoscope.blog
The fine print that follows you out the door: non-compete clauses are spreading
https://oecdecoscope.blog/2026/07/07/the-fine-print-that-follows-you-out-the-door-non-compete-clauses-are-spreading-and-holding-back-growth/
65 comments
Story time for NC's. I had a doctor that lived near me working at a medical clinic that got bought up by PE. He signed the new contract with them and kept working for a while, but decided he needed to move for one reason or another. After he quits, PE informs him of the NC in the new contract he signed, and that he wouldn't be able to practice medicine for N years (I think it was something like 5). He ended up hanging himself, and in response, the clinic's staff quit en masse and basically dared the PE company to try and enforce the clause. PE backed down because suing all the doctors individually would have cost too much and it would have been awful PR for the practice. They ended up selling the clinic before the year was out.
FYI - there are already a few states that don't allow companies to enforce such draconian noncompetes.
Moving to California is better than killing yourself most of the time.
Moving to California is better than killing yourself most of the time.
Clearly something else was going on. No mentally healthy person would kill themself because of this.
You are clearly incapable of putting yourself in the shoes of someone who is being told they cannot pursue their vocation for half a decade.
Cannot pursue your vocation in certain jurisdictions. And there are plenty of adjacent fields I suspect wouldn't be covered by the NC - like education.
> Cannot pursue your vocation in certain jurisdictions. And there are plenty of adjacent fields I suspect wouldn't be covered by the NC - like education.
I doubt the PE firm informed him of that, and I'd bet they made their NC seem bulletproof when they talked to him.
I doubt the PE firm informed him of that, and I'd bet they made their NC seem bulletproof when they talked to him.
sure there are always options. but they may not be visible or accessible. maybe they can not or don't want to move because of family. maybe there are no alternative jobs in the area, maybe they hate teaching. seriously, the only sane response to non-competes is to make them illegal. everything else is missing the point.
Well yes of course the non compete is a problem.
well yes, they lost their livelyhood, and they may loose their home, their family and who knows what else.
I like the German non-compete requirements (by law): max non-compete length is 24 months. Non-competes need to be reimbursed at half the last salary. The non-compete also needs to be specific to a real competition scenario (e.g. you taking your clients with you). For a job like being a generic doctor which any doctor could do, that would likely fail.
If the non-compete is so broad that it makes you unemployable that also makes it void.
If the non-compete is so broad that it makes you unemployable that also makes it void.
Private equity is cancer. It honestly should be illegal, particularly to buy a company with a loan and then strip-mine the assets to pay back that loan.
Private equity looks for "pricing power". This just means "inelastic demand". So housing, vets, healthcare, food and utilities are great targets because you can't opt out of basic needs. Healthcare (and vets) have the added layer that PE tends to buy all the practices in an area at the same time so there's no competition. And, like you say, they sign all the medical providers with these big contracts with onerous non-competes
Those non-competes, while onerous, tend to be regional. The region can be large however but if you moved (which, admittedly, most people don't want to do) then you could practice medicine elsewhere.
Here are two big ways PE is trying to corner these markets with mixed success:
1. Some states (eg Oregon) have laws that forbid companies from "practicing medicine" so when Apollo came and tried to buy their way into emergency care (so the hospitals fired the physician-owned emergency medicine group that had been running it for decades), they try this convoluted corporate structure where there's a company that ostensibly owns the new healthcare operation and it has some doctor placed as the chief but really it's a Trojan horse for the PE firm. So far, judges in Oregon have rejected this end-run around the law; and
2. Envision Healthcare was a massive PE failure because of a law change. Here's how it worked. Whatever insurance you have will have in-network and out-of-network providers. In a hospital environment you generally have little control over the various providers who see you. This has led to some surprises where, say, the anesthesiologist for your surgery might be out-of-network while your surgeion was in-network. The surgeon is getting an in-network fee of $8000 but the out-of-network anesthesioligist is charging $100,000. Unscrupulous doctors would evngage in revenuemaxxing by intentionally bringing in an out-of-network provider then splitting the much higher fee rather than using the residents in the hospital, which were essentially "free".
That was Envision's entire business model: surprise out-of-network billing. Then in 2021, the No Surprises Act was passed that basically outlawed this practice. It forced hospitals to only receive in-network rates for things like this. And the entire $6.5B purchase of Envision imploded.
This is partially why I get so angry when people try and defend PE as a concept. It's entirely parasitic. It's not even theoretically making a business more efficient. It's just hiking prices in a way where people have no choice. That's it.
The interesting part is that the PE firm will try and exit by IPOing the "restructured" company, which will only last a few years before the complicated debt structure implodes, a bit like subprime loans. A textbook structure is to "sell" all the real estate to a holding company and that's not listed and then you have complciated leaseback contracts that only keep going up in rent.
One of favorite "fun" facts about healthcare is when passing the Affordable Care Act, somebody snuck in a provision that made physician-owned hospitals illegal. Who? Nobody really knows as best as I can tell. It just made it into the final bill. Someobody argued doctors would have an unfair advantage or something. Who? Insurance companies.
Honestly, this entire system needs to be burned to the ground, Boudicca style.
Private equity looks for "pricing power". This just means "inelastic demand". So housing, vets, healthcare, food and utilities are great targets because you can't opt out of basic needs. Healthcare (and vets) have the added layer that PE tends to buy all the practices in an area at the same time so there's no competition. And, like you say, they sign all the medical providers with these big contracts with onerous non-competes
Those non-competes, while onerous, tend to be regional. The region can be large however but if you moved (which, admittedly, most people don't want to do) then you could practice medicine elsewhere.
Here are two big ways PE is trying to corner these markets with mixed success:
1. Some states (eg Oregon) have laws that forbid companies from "practicing medicine" so when Apollo came and tried to buy their way into emergency care (so the hospitals fired the physician-owned emergency medicine group that had been running it for decades), they try this convoluted corporate structure where there's a company that ostensibly owns the new healthcare operation and it has some doctor placed as the chief but really it's a Trojan horse for the PE firm. So far, judges in Oregon have rejected this end-run around the law; and
2. Envision Healthcare was a massive PE failure because of a law change. Here's how it worked. Whatever insurance you have will have in-network and out-of-network providers. In a hospital environment you generally have little control over the various providers who see you. This has led to some surprises where, say, the anesthesiologist for your surgery might be out-of-network while your surgeion was in-network. The surgeon is getting an in-network fee of $8000 but the out-of-network anesthesioligist is charging $100,000. Unscrupulous doctors would evngage in revenuemaxxing by intentionally bringing in an out-of-network provider then splitting the much higher fee rather than using the residents in the hospital, which were essentially "free".
That was Envision's entire business model: surprise out-of-network billing. Then in 2021, the No Surprises Act was passed that basically outlawed this practice. It forced hospitals to only receive in-network rates for things like this. And the entire $6.5B purchase of Envision imploded.
This is partially why I get so angry when people try and defend PE as a concept. It's entirely parasitic. It's not even theoretically making a business more efficient. It's just hiking prices in a way where people have no choice. That's it.
The interesting part is that the PE firm will try and exit by IPOing the "restructured" company, which will only last a few years before the complicated debt structure implodes, a bit like subprime loans. A textbook structure is to "sell" all the real estate to a holding company and that's not listed and then you have complciated leaseback contracts that only keep going up in rent.
One of favorite "fun" facts about healthcare is when passing the Affordable Care Act, somebody snuck in a provision that made physician-owned hospitals illegal. Who? Nobody really knows as best as I can tell. It just made it into the final bill. Someobody argued doctors would have an unfair advantage or something. Who? Insurance companies.
Honestly, this entire system needs to be burned to the ground, Boudicca style.
There's a strong argument to be made that the banning of non-competes is the main reason California is the software capital of the world.
Non-competes in finance almost always come with compensation during the defined period.
The idea that a company can restrict at-will employee’s post-separation employment is absurd if they aren’t compensating the individual.
In many US states and countries outside the US, the enforcement of non-competes is very very hard. The problem is that they create a RISK of enforcement.
The idea that a company can restrict at-will employee’s post-separation employment is absurd if they aren’t compensating the individual.
In many US states and countries outside the US, the enforcement of non-competes is very very hard. The problem is that they create a RISK of enforcement.
By some logic:
* If they want to tell someone personally what to do or not to do, is some form of employment.
* If it is not paid, it can be considered slavery.
* It is usually possible to quit jobs.
* If they want to tell someone personally what to do or not to do, is some form of employment.
* If it is not paid, it can be considered slavery.
* It is usually possible to quit jobs.
Executive level non-competes are probably the most damaging for the overall economy though.
If there's a market-dominating company, and execs are allowed to leave said company, start a competitor, get some investor dollars behind them, then start poaching employees from the old company, the market can have a really viable competitor quite quickly.
Without that ability, little monopolies spring up throughout the economy and use their size to crush upstarts, under-compensate their employees, overcharge their customers, and squeeze their suppliers.
Banning non-competes is an absolute requirement for free-market capitalism to function properly.
If there's a market-dominating company, and execs are allowed to leave said company, start a competitor, get some investor dollars behind them, then start poaching employees from the old company, the market can have a really viable competitor quite quickly.
Without that ability, little monopolies spring up throughout the economy and use their size to crush upstarts, under-compensate their employees, overcharge their customers, and squeeze their suppliers.
Banning non-competes is an absolute requirement for free-market capitalism to function properly.
Salient arguments, although I am personally of the belief that limited non-competes make some sense, at least in the US, at least in some fields.
One of the other respondents mentioned one of the main issues with a DIY attitude towards modifying NCDs is the advent of digital signing of NCDs now, and I concur that NC documents really should be paper (though I can see an argument for adding a blockchain-like element/step with a digitized document that would capture the crossed-out sections). I used to deal with sections of NC forms I did not like this way myself.
A lot of people don't like non-competes but I think people give them a bad reputation sometimes. Not when they are being abused (like the case of the doctor and PE mentioned elsewhere, and as I said in some cases NCs make little sense to me; if it is isn't research-related, and/or doesn't involve some sort of patent or novel procedure or tech or research, it clearly makes less sense), but certainly when they serve to prevent people from running off and starting a new company and competing with the company they just left (e.g., how the AI field especially is getting very glutty and 'competitive' now; it resembles less of a free-market and more like Battle Royale in ways).
Pretty sure non-competes prevent economic collapses, layoffs and bankruptcies for many companies.
The danger is abuse of them, not their existence. I don't think banning them outright is good. Especially in Fintech, which is a field rife with moral and ethical quandaries.
I do want to point out that it irks me when people make a big deal complaining about a non-compete afterwards, when they know they signed a non-compete prior to a meeting or job or role somewhere. Part of the point of non-competes is that generally the people that want you to sign them know there is a reason you would want to talk about something or use it elsewhere.
Abuse should be prevented and preventable by both sides of the non-compete and NDA processes though.
Should someone be prevented from working with models after working with them at another company? Maybe. If you sign and say yes and you are paid (even if it is not after you leave; you were given notice, though clearly you may not like it; the ability to renegotiate should exist before leaving), then, like it or not, you signed it. But a better approach is just more specific NC clauses (specific sorts of models or specific fields being ruled out, not the whole shebang).
But as I said, I see good reasons for them existing.
One of the other respondents mentioned one of the main issues with a DIY attitude towards modifying NCDs is the advent of digital signing of NCDs now, and I concur that NC documents really should be paper (though I can see an argument for adding a blockchain-like element/step with a digitized document that would capture the crossed-out sections). I used to deal with sections of NC forms I did not like this way myself.
A lot of people don't like non-competes but I think people give them a bad reputation sometimes. Not when they are being abused (like the case of the doctor and PE mentioned elsewhere, and as I said in some cases NCs make little sense to me; if it is isn't research-related, and/or doesn't involve some sort of patent or novel procedure or tech or research, it clearly makes less sense), but certainly when they serve to prevent people from running off and starting a new company and competing with the company they just left (e.g., how the AI field especially is getting very glutty and 'competitive' now; it resembles less of a free-market and more like Battle Royale in ways).
Pretty sure non-competes prevent economic collapses, layoffs and bankruptcies for many companies.
The danger is abuse of them, not their existence. I don't think banning them outright is good. Especially in Fintech, which is a field rife with moral and ethical quandaries.
I do want to point out that it irks me when people make a big deal complaining about a non-compete afterwards, when they know they signed a non-compete prior to a meeting or job or role somewhere. Part of the point of non-competes is that generally the people that want you to sign them know there is a reason you would want to talk about something or use it elsewhere.
Abuse should be prevented and preventable by both sides of the non-compete and NDA processes though.
Should someone be prevented from working with models after working with them at another company? Maybe. If you sign and say yes and you are paid (even if it is not after you leave; you were given notice, though clearly you may not like it; the ability to renegotiate should exist before leaving), then, like it or not, you signed it. But a better approach is just more specific NC clauses (specific sorts of models or specific fields being ruled out, not the whole shebang).
But as I said, I see good reasons for them existing.
I'm a firm believer in this as well. You want to enforce a noncompete? Great. You have to pay me as much as what I was earning (plus benefits), possibly more, for as long as you want to enforce it. That amount should probably go up 50%+ per year too.
These are often not disclosed until you start. Day 1 'paperwork' that drastically changes the agreed upon terms of employment well after you have left a previous position. In some cases they are even forced on you after having worked somewhere for a while and future employment is predicated on them. They are evil. I almost quit my job over this, but of course how can you afford to not work while searching? And searching while out of work is far harder than while still working. We need penalties on companies that do this, not just a ban. 'Sign this or you are fired' documents after you are hired should have repercussions.
Thankful that California banned them, others should follow suit.
In all cases where I was presented with an unreasonable non-compete, I either negotiated it away or scratched it out before signing. I know not everyone has that luxury, but if your BATNA is signing, it's worth a shot.
Easier to do when there's paper to scratch.
I wonder if anyone has tried presenting an “Artist Rider” to similar effect.
If they've not offered you anything, the non compete is certainly not valid.
I think the implication is that it’s easier to modify paper than a Docusign form where the only option is “click here to sign”
no, as in physical contracts you _can_ scratch something out on are becoming rare. Usally some fuckass digital signing service or another, tgat barely works on chrome let alone firefox.
I understand now
Australia is limiting / banning non competes for certain workers
https://www.mlc.org.au/whats-changing-with-non-compete-claus...
https://www.mlc.org.au/whats-changing-with-non-compete-claus...
Sadly Amazon has been known to enforce its 18-month NC in WA state (not sure if they’ve ever prevailed in court). They will absolutely not negotiate on this.
> Sadly Amazon has been known to enforce its 18-month NC in WA state
I'm darkly-amused by how this really makes Amazon sound like a quasi-governmental entity.
AFAICT a lawsuit (Burns v. Amazon) on that is ongoing.
I'm darkly-amused by how this really makes Amazon sound like a quasi-governmental entity.
AFAICT a lawsuit (Burns v. Amazon) on that is ongoing.
Not enforceable in California
Not worth even printing out where I am. They are worthless.
I’d be fine signing a non compete if they ever offered anything in return. If they want me to stay out of the market for a period of time, they better pay garden leave or SOME sort of consideration
Also not enforceable in Ontario Canada since 2021.
With the recent well publicised cases of developers stealing proprietary information, this is going to become more common.
Just ignore them completely unless you're an executive.
I don't think I can live outside of California at this point
I don’t even negotiate these clauses I just have so much assurance the state is going to throw out the case that I just let the client shoot themselves in the foot, and silently get invested in seeing which other ways they’ll mess up
I don’t even negotiate these clauses I just have so much assurance the state is going to throw out the case that I just let the client shoot themselves in the foot, and silently get invested in seeing which other ways they’ll mess up
Washington State also passed a non-compete ban that will take effect July 2027.
Hm progress, need to see how the courts handle it in that state
When it comes to enslavement to giant corporations or government, all I can say is:
"The only winning move is not to play."
"The only winning move is not to play."
It’s nice to be rich I guess
Or be willing to move.
Or be willing to do without all the fluff and luxuries and live a simple and humble life, to avoid enslavement of oneself and one's family to the Beast.
It's even nicer having freedom.
Often bought with riches.
More often with principles.
i think you underestimate the starting capital required to be able to stand with principles in the modern world. I'm lucky to be in such a position, but I'm also aware few are.
You don't need money to live a principled life. Change your life lens. Seek the truth, change the company. There are several places that don't ask you to compromise your morals or principles. Be in touch with principled people, learn from them. I never care about money and so I never have it but I have never been found wanting when I need it. God will make it happen. No worries.
Freedom is pretty useless without food
The other day I was digging through a grocery store dumpster, pulling out a truck load of good food for free, as usual. A couple young Indian immigrants came walking by, avoiding eye contact with this dirty, low class American. I offered one of them a beer. He was excited for about .5 seconds, then asked, "Wait, did that come out of the dumpster?" and suddenly decided he didn't want it. Shrug. Back to the cubicle for him I guess.
i rarely use ai, however i must constantly sift through ai blog posts like this one to find actual communication. should i leave the internet to win the game against ai? well i did the next best thing and got a nokia brick phone, yet facebook still knows how to recommend those i meet in real life!! i tried not playing but im still in the game. does that mean the only way i can win is to kill myself?
> yet facebook still knows how to recommend those i meet in real life!!
Meta is an awful company but they don't have Enemy of the State level surveillance.
If you met someone in real life and then Facebook recommended them to you the leak here was almost certainly a human one, eg. the person you met googled you and clicked your Facebook profile when it showed up (while they themselves were logged into Facebook) and that's how Facebook made the connection.
So don't kill yourself. Life is very short anyway, enjoy the absurdity of it while you can.
Meta is an awful company but they don't have Enemy of the State level surveillance.
If you met someone in real life and then Facebook recommended them to you the leak here was almost certainly a human one, eg. the person you met googled you and clicked your Facebook profile when it showed up (while they themselves were logged into Facebook) and that's how Facebook made the connection.
So don't kill yourself. Life is very short anyway, enjoy the absurdity of it while you can.
i was verbally introduced to somebody (that i have 1 mutual friend with) for a grand total of 30 seconds, facebook knew about it an hour later. nobody involved used their phones much during that hour. based on this occurence, facebook's intrusiveness is clearly deep enough. i appreciate the advice not to commit suicide - another responder was correct that i would be digitally resurrected as a pure profit vehicle anyway
Again it's almost certainly other people using their phones. One of your facebook contacts friended this person, maybe even before you shook their hand, facebook is going to recommend you friend them too. I don't friend anyone any more on facebook and the last time I did I lived in another country. It knows where I live now but it has never recommended anyone close by to friend. However, I do get friendship recommendations for folks in the country I moved away from, and I'm sure if I lived there still I'd have actually bumped into said people and thought "huh coincidence that facebook recommended them or are they spying on me?!?!"
That strategy would not be guaranteed to work.
An AI simulation of you would post on HN.
Welcome to the future.
As always 99% of it is poor quality slop...
An AI simulation of you would post on HN.
Welcome to the future.
As always 99% of it is poor quality slop...
why are you on facebook?
Rather than asking him the question of why in a simple rudimentary form, give the guy motivation to quit facebook instead. Facebook employs guilt tactics about people they know to get them to stay, and if they quit, they're likely to go back because of in person connections. By sounding condescending, the person you're replying to is likely to justify staying rather than quitting.
i think your advice would apply in a standard human situation where optimal communication requires decoration, in this scenario i reciprocated the communication format which indicates acceptance
i have an account from when i was a teenager that i sometimes use to talk to family. why do you ask? based on my anecdote we are all tracked by facebook, whether or not we are on facebook.
It was confusing hearing that Facebook was recommending people to you when you made it sound like you were choosing to opt out of those things.
I am not sure how your anecdote would show you are all tracked by Facebook even if you aren't on facebook; you only received recommendations for people to friend on facebook because you are on facebook. I am not on facebook, so i have never had facebook recommend anyone to me.
I am not sure how your anecdote would show you are all tracked by Facebook even if you aren't on facebook; you only received recommendations for people to friend on facebook because you are on facebook. I am not on facebook, so i have never had facebook recommend anyone to me.
my phone cant run facebook. by choosing this phone i am opting not to have facebook track me on a constant basis. however, based on whatever signals are available to everyone elses phones, facebook still tracks me. and facebook is doing the same to everybody including you - not sure if youre aware of the concept of shadow profiles?
well you were asking how to get out of the game. leaving facebook is one of the necessary steps. it may not be enough, and some things from you may still be tracked by meta, but less is better. it's as simple as that. i do have sympathy with the fact that sometimes you just can't avoid it though. if you have family members that absolutely refuse to talk to you in any other way for example. so i ask to reflect if you really need it, or if you can find other ways to stay in touch with your family. (but the key point is the reflection, i am not expecting you to find a solution right away. the point is: always be aware why you are making that tradeoff. i would be on facebook too if i had people there that are important to me and that i could not reach any other way. i do know some people that are on facebook that i would like to be in contact with, so i can sympathize.)