Noncompetes were never about sandwich art

Plus: Google's protests, NYC's budget and more. [Bloomberg]( This is Bloomberg Opinion Today, a hero-type, deli-style sandwich located within three miles of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - The [noncompete ban]( is good for the nation. - But bankers mourn their [year-long vacation](. - Sundar Pichai’s [patience]( has left the station. - New York’s [budget]( is a source of frustration. Noncompete Sandwich Artists I didn’t know what Jimmy John’s was before going to college in Indiana, but once I got my hands on a Turkey Tom in 2013, I never looked back. Not because their sandwiches were amazing (they’re pretty mid, in all honesty), but because of the speed of the delivery drivers. No matter where or what time you ordered — the dorm at 2 a.m. or a football tailgate at noon — your food got to you freaky fast, as the chain purports. Almost, like, [too]( [fast](: Once I ordered a sandwich to my friend’s house and it arrived within two minutes. I was half-convinced the guy who handed it to me made it in the back of his Honda Civic. That delivery driver lore was, to me, the company’s “secret sauce.” But looking back, the workers’ blazing speed probably had a lot to do with hustling to keep their jobs after the chain had forced them to sign [this]( intense noncompete agreement: Employee covenants and agrees that, during his or her employment with the Employer and for a period of two (2) years after … he or she will not have any direct or indirect interest in or perform services for … any business which derives more than ten percent (10%) of its revenue from selling submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches and which is located within three (3) miles of either [the Jimmy John’s location in question] or any such other Jimmy John’s Sandwich Shop. There are thousands of Jimmy John’s in this country. Preventing former employees from slinging salami within a three-mile radius of every store feels criminal! Which is probably why the chain agreed to stop requiring noncompetes in 2016. And now, thanks to Lina Khan, every sandwich artist, [chef](, [brewer]( or [veterinarian]( who’s ever had to sign one can breathe a sigh of relief. With the Federal Trade Commission’s [near-total ban]( on the provisions that prohibit workers from switching jobs within an industry, Betsey Stevenson [says]( “the bargaining power shifts from employers to workers: Employers must make more competitive counteroffers to retain talent.” Also: It was never about sandwich art! Noncompetes have always been an intimidation tactic, which is why lots of states have rules against them. But unless you have, like, a lawyer friend to tell you that you don’t need to sign the paperwork, you’re gonna do it. Although the [Chamber of Commerce]( vowed to immediately challenge the FTC’s ruling in court, Betsey argues that the ban is a victory for the American economy. “The US needs a competitive economy to stay strong in the global marketplace. And that requires workers who are able to take their skills where they are most valued — and new businesses that have access to the full talent of the US labor force,” she writes. Of course, this might not be a victory for everyone. Matt Levine [says]( the vests on Wall Street are [bugging out]( about the potential loss of their garden leave. High-income workers in the financial industry have grown accustomed to the occasional perk of a year-long vacation. “In the financial industry, there is a common norm that if you leave a job you are not allowed to work for a competitor for some period of months or years, during which you are still paid by your old employer,” he writes, noting that “there are probably some people who structure their financial careers around maximizing gardening leave.” Did the FTC nix that? Matt says no, probably not. But the FTC’s official stance is a bit murky. The likely outcome, according to Matt? “Getting rid of noncompetes will probably mean that firms have to rely more on NDAs, which will mean more messy disputes.” And you know what more legal drama means: more late-night Jimmy John’s orders from your lawyer friend! The Great Googler Rebellion While we’re on the subject of keeping employees happy, let’s talk about Google. For a while there, Alphabet was THE place to work. They had [massage therapists]( on site. Fitness centers and exercise classes to stay healthy. Free lunches, available via numerous cafes and restaurants on campus. But CEO Sundar Pichai is officially over the company’s touchy-feely approach to employee satisfaction. For most of his tenure, he’s been a “peacetime CEO,” [says]( Dave Lee, but “Pichai’s recent [memo]( to workers, sent amid the [latest round of discontent]( at the company — this time over the company’s $1.2 billion contract (shared with Amazon.com Inc.) to provide cloud services to Israel,” represents a stark departure. “The company did not hesitate to force out the unruly,” Dave writes; more than 50 Googlers were fired this week for protesting the deal at the company’s offices. On the bright side, at least they won’t have to [worry]( about violating noncompetes? Bonus CEO Reading: - CEOs and foreign policy elites are [talking more]( to each other — which is good for both sides. — Adrian Wooldridge - Paramount’s [best hope for survival]( is the son of the ninth richest man in the world. — Paul Hardart For the Kids If there’s one thing you ought to know about Michael R. Bloomberg, other than the fact that he’s the founder and majority owner of Bloomberg LP, it’s that he’s for the kids. (I would know, because we had a Girl Scout Troop selling cookies at the office today!) When he became New York City’s 108th mayor, not one of the state’s 25 highest-performing elementary or middle schools was located in the city. By the time he left office, 22 of the top 25 schools were in the five boroughs. In 2002, the state handed over control of the school system to the mayor. “Over 12 years, we made major gains: raising graduation rates by 42%, opening 654 new schools, reducing the racial achievement gap by nearly a quarter, and nearly doubling the college readiness rate,” Bloomberg writes. But all that progress is threatened by politics now. “The state’s new budget undermines mayoral control of the city’s schools,” he explains. Although the mayor can still choose the chair of the Panel for Educational Policy, it must be someone the legislature has preselected — a “cynical scheme,” in Bloomberg’s eyes. “Parents and children and everyone who cares about education should be raising hell and demanding that the legislature revisit this issue before the end of the school year,” he writes. Read [the whole thing]( for free. Telltale Charts Consider this your daily reminder that Tesla is sucking wind: “The first quarter’s [bombshell drop in vehicle sales]( sent predictable shockwaves through Tesla’s financials,” Liam Denning [writes](. “Tesla has also been building more vehicles than it has sold for most of the past two years, and last quarter’s excess was the biggest by far.” It’s just one yikes after the next at this point. Uh, remember when we had the second-biggest bank failure in US history? If the words “Silicon Valley Bank” aren’t ringing any bells, let Paul J. Davies [remind you](. A year ago, SVB — the bank that helped small startups try to become the billion-dollar businesses of tomorrow — collapsed. Since then, JPMorgan Chase and HSBC have tried to cash in on the San Francisco VC jackpot, but SVB is still haunting their business under the ownership of First Citizens. Although “it has a trust deficit to rebuild with venture capital firms and their companies,” Paul says “its well-informed local bankers who are close to their industries give it an edge.” Further Reading Free read: David Pecker’s testimony at the Trump trial is [a lesson]( in power politics. — Timothy L. O’Brien Does Hong Kong really need [197,800 bankers](? Private credit says no. — Shuli Ren Four issues are set to tip the [US-China relationship]( back into high tension. — Hal Brands AOC gets that [compromise]( is a necessary part of democracy. — Francis Wilkinson UPS is trucking along just fine. [All signs]( point to a successful 2024. — Thomas Black Who’s afraid of a buyout? Let’s end the stigma of [putting yourself up]( for sale. — Chris Hughes Gucci’s [shift from cutting-edge]( to classic will take time. — Andrea Felsted We can’t unscramble [Biden’s mixed messages]( toward Israelis and Palestinians. — Andreas Kluth ICYMI Arizona [passed a bill]( to repeal the 1864 abortion ban. Visualizing the [pro-Palestinian protest]( movement. The US secretly sent [long-range missiles]( to Ukraine. TikTok executives tell staffers to [stay focused](. Kickers [Billie Eilish]( is a [quotable]( queen. Seagull Boy has a [winning scream](. (h/t Dave Lee) Easter Island [monolith dupes]( are [all the rage](. Everyone has a crush on [Pierce Abernathy](. Watching [the Knicks play]( from prison. Bonus Corner Kicker: To me, “Arsenal,” “Liverpool” and “Chelsea” sound like they could be [Taylor Swift]( songs. So you can understand why I have ZERO authority to help Howard Chua-Eoan, our Friday Newsletter-er in Chief, [pick a football team]( to root for. He moved to London from New York nearly six years ago, but still hasn’t chosen a club to support: Do I favor emotion over accountability? Should it be a team you’d be willing to bet money on? Do I study the roster of players or go with the inspiration of a club’s history? Should it even be a team in the elite Premier League when there are so many others? Do I follow both the men’s and women’s squads of the same club? Or is it OK to split loyalties? Does it come down to how close a stadium is to where I live — and if I can get tickets? Or do I go for shallower things — team colors and emblems? So, dear readers, now is your time to do some real influencing!!! If you are a passionate football fan, email Howard — hchuaeoan@bloomberg.net — with your reasons for picking your club. And be sure to tell him why you’ve stuck with it through ups and downs. Notes: Please send Turkey Toms and feedback to Jessica Karl at jkarl9@bloomberg.net. 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