In public comments out Tuesday evening, online review site Yelp makes a forceful argument in favor of the Federal Trade Commission's proposed ban on noncompete agreements.
Yelp, in its comments, opens up about a recent non-compete imbroglio it went through, after it tried to hire a Groupon executive, Sung Shin, as Yelp's vice president of product management in 2021.
Shin had been working at Groupon for just seven months when he gave notice of his intention to resign. Groupon told him he couldn't take the job because Yelp was a competitor. Groupon told Shin he had essentially two options: Stay at Groupon, or stay on until he could find a job at a company that Groupon didn't deem a competitor, according to a court filing.
Groupon wound up filing suit against Shin to prevent him from taking the job. He lost at the district court level — and was prohibited from working for Yelp for a year-and-a-half. He appealed, but it was too late. "[A]ny ruling on that appeal would have come far too late to save the job he desired at Yelp," the company explains.Yelp's experience highlights how noncompetes diminish competition for workers, Yelp points out.In California, where Yelp is headquartered, noncompetes have been banned since the 19th century — and the state is known as a place where startups and competition flourish, Yelp points out.The rise of remote work complicates the situation.
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