The Subtext of Ridiculous Non-Compete Agreements

You might have heard about the rash of non-compete agreements being inflicted on workers. These prohibit workers who leave a company from working for a competitor for a specific period of time (for the record I oppose these agreements–if you want to keep your secrets, do what it takes to keep your workers). While they traditionally have been applied to high-tech workers, they are now being applied to low-tech workers, such as Jimmy John’s sandwiches and Camp Bow Wow, a ‘doggy day care’ franchise (Jimmy John’s is all the more galling since they have been sued twice for wage theft).

These policies (which, at the low-tech end, many experts think are unenforceable) suggest that there’s a large bullshit economy. What I mean is that most of these businesses aren’t providing anything novel–there’s no reason why one couldn’t ‘clone’ Camp Bow Wow or a sandwich chain. These companies make money by being ‘first past the post’, large (allow expansion and business policies that chase out weaker competitors), and beating the shit out of their workers. But there’s very little that’s actually creative or truly proprietary. Consider this description of Uber and other ‘new economy’ businesses (boldface mine):

Uber owns almost no physical infrastructure and has an unremarkable app that is little different from those of a half dozen competitors. And yet it might soon reach $10 billion a year in revenue…

Here’s what it takes to make Uber a success, apparently: Enter new markets without asking regulators for permission, then build enough of a customer base to make classifying the service as a traditional taxi company politically expensive for regulators. Tell investors who want to put their money in the company that they are banned from investing in its competitors. Aggressively recruit drivers from competitors, while also interfering with those drivers’ ability to make a living by ordering and canceling rides. Collect information on all Uber rides and users in a “God View” dashboard that is accessible to Uber’s salaried employees…

As valuations have climbed ever higher, and investment has poured into startups at an ever faster rate, it was inevitable that a company prepared to redefine “win at all costs” would arise….

But the evidence is that tech has changed. As more tech companies in name only emerge—think of all the food, infrastructure and other startups for which tech is merely an enabler—they are subject to the same savage market forces that shape every industry they attempt to disrupt.

The first sentence is key–and it doesn’t just apply to “tech companies in name only” (‘TCNO’?-‘techno’?): most companies aren’t providing something novel, so in a winner-take-all system* (i.e., not local or regional businesses) the ‘breakthroughs’ aren’t technological at all, but time-honored monopoly, monosopy, worker exploitation, and political maneuvering.

Meet the new boss, same as the old one.

*If you’re an ecologist, this is analogous to population or community models in a rapidly-diffusing homogeneous landscape.

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3 Responses to The Subtext of Ridiculous Non-Compete Agreements

  1. “bullshit economy”

    So many business models today are bullshit business models.

    There’s a parallel here with landlord/tenant lease agreements that are not legal and not legally defensible.

    If someone can’t afford the legal defense, or if the legal defense is prohibitively expensive compared to the expense of going along with the legally indefensible, these contracts are binding – legal or not.

    Unless these things are treated as criminal, they almost may as well be legal, because they won’t stop.

  2. coloncancercommunity says:

    On CNN Peter Thiel spoke with Fareed Zakaria about how “innovative” we really are – or aren’t at this time. Admittedly, I think Peter Thiel is often something of a jerk. However, I do agree with his premise that innovation (and invention for that matter) has been grossly limited to information technology, at least in recent years. How could it be otherwise? We have ceased funding basic research which eventually impacts applied R&D. Since BS abhors a vacuum, it rushes in to fill the void.

  3. Pingback: Let us all love links (ongoing racism, part eleventy) | Grumpy Rumblings (of the formerly untenured)

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