[kanbara]

i’ve never heard of the second form of non-compete. how would the former employer even know? how is that legal? any amount of compensation that is finalised upon leaving the company (e.g. RSUs) should be yours to own, period. that’s akin to saying they can legally demand your paycheques back because they didnt like the company you went to.

totally insane— america needs more labour rights.

[hollowcelery]

In this arrangement you don’t yet own the deferred compensation when you leave the company. It does not belong to you. Instead your contract with the company might say “we will set aside an amount of money (which isn’t yet yours) and portion it out to you for 1-2 years after you leave, conditional on you not joining a competing firm in that period. If you join a competing firm, we will stop paying you.” Alternatively, the company will just pay you your full salary (plus maybe a fraction of what you used to get in bonus) for this period.

Essentially you’re being paid an income not to work for the competition. Most people take this deal as it tends to be pretty good — think several hundred thousand dollars for you to take an extended holiday or work on personal projects.

If you do take a competing offer during the non-compete period, the company might also use legal action against you, which is another story entirely and one whose threat most people would prefer to avoid.

[HWR_14]

In the UK and other places this is also common. They are just agreeing to pay you for another couple of years to not work for a competitor.