Meaningful Decisions

Mick Lynch | Pentagon Updates Parental Leave Policy | Spotify's Calendar Purge | The End of Noncompetes?

Sweden September 3, 1967

Quote of the Moment

Ordinary people must have a right to make meaningful decisions in their workplace, their communities, and society.

| Mick Lynch, ‘The Government’s New Anti-Union Laws Are a Form of Conscription’

Mick Lynch is the head of the National Union of Rail, Maritime and Transport Workers (RMT) in the United Kingdom, and staring down the Conservatives who would like to constrain legitimate labor organizing and collective bargaining, which necessarily includes striking for pay, benefits, and safety.

Note that Joe Biden’s Democrats recently forced railroad workers back onto the job, denying them the right to strike for benefits, like paid leave and greater control of individual workers’ schedules. In effect, The US government stood with the railroads, who have adopted management practices to drive up profits at the expense of the workers. (See Everlasting Uncertainty and Agitation.)

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Pentagon Updates Parental Leave Policy

The United States has made no laws establishing paid sick leave or paid parental leave (although The Family and Medical Leave Act (FMLA) provides some citizens with up to 12 weeks of unpaid, job-protected leave per year). However, the US Department of Defense has updated its paid parental leave policy to minimize the distinction between various service members who were previously covered in a variety of ways and degrees:

The expansion provides parental leave to active and reserve component service members (on active duty for 12 months or more) who have given birth, adopted a child or had a child placed for adoption or long-term foster care with them. Birth parents will be granted 12 weeks of parental leave following a period of convalescent leave and non-birth parents will be granted 12 weeks of leave following the birth of their child. Adoptive parents and eligible foster parents will also be granted 12 weeks of parental leave. The MPLP is designed to allow members to care for their children while balancing the needs of their unit.  

So, the pathway to national paid leave and paid parental leave is simple: just induct the entire US population into some new branch of the military — the US Citizen Corps — and we’ll be there. Easy. And make everyone eligible for health care through the VA.

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Shopify’s ‘Calendar Purge’

The e-commerce giant Shopify is making a New Year’s resolution for the company, wiping everyone’s calendars of recurring meetings of more than two people.

Shopify will be eliminating all recurring meetings involving more than two people in a bid to give employees more time to work on other tasks, Kaz Nejatian, vice president of product and chief operating officer at Shopify told employees in a Tuesday email viewed by Fortune. 

The changes, which are effective immediately, will also see no events at all scheduled on Wednesdays, while any large meetings involving more than 50 people can only be held on Thursdays between 11 a.m. and 5 p.m. Eastern Time. Big meetings are limited to one per week.

I predict that mandating that all large meetings take place on Thursdays between 11am and 5pm is going to lead to an ongoing traffic jam. I like the idea of days with no meetings, but Wednesday isn’t enough.

But I don’t disagree with the basic idea: time should be treated like the irreplaceable asset that it is. Still, I am a strong proponent of people being able to manage their own calendars, and this does seem heavy-handed. Maybe, though, it’s more like shock therapy, and over time more control can shift back to individuals.

The company estimates this will wipe 10,000 scheduled events and more that 76,500 hours of meetings. The CEO Tobi Lutke shared the philosophy behind this:

The best thing founders can do is subtraction. It's much easier to add things than to remove things. If you say yes to a thing, you actually say no to every other thing you could have done with that period of time. As people add things, the set of things that can be done becomes smaller. Then, you end up with more and more people just maintaining the status quo.

Kaz Nejatian, the VP of product and COO, makes the case for doing this all at once:

We can either go slow and deliberate, or fast and chaotic. We are going fast and chaotic. While we know this will feel chaotic, that’s the point. Intentional chaos is more than OK and it’s part of working and thriving at Shopify.

When Sweden shifted from left-hand driving to right-hand, it was also coordinated to happen all at once across the entire country (note that all Sweden’s neighbors drove on the right-hand side already):

At 4:50 a.m. on September 3, 1967, as crowds of people gathered to watch, all vehicles on the road were instructed to come to a halt. They were then directed to move carefully from the left side of the road to the right, and wait. At the stroke of 5:00, following a radio countdown, an announcement was made — “Sweden now has right-hand driving” — and traffic was allowed to resume. Time Magazine called the event “a brief but monumental traffic jam.”

Note that Spotify just had to delete a bunch of meetings, but Sweden had to reorient traffic lights, road signs changed, and repaint street traffic indicators like stop lines. And they did that all at once. Not chaos, but choreographed and accelerated change.

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The End of Noncompetes?

Lina Khan, the chair of the Federal Trade Commission, has announced that noncomplete clauses in US employment contracts violate ‘Section 5 of the F.T.C. Act, a federal law passed by Congress more than a century ago, is supposed to prevent’.

She writes [emphasis mine]:

When you’re subject to a noncompete clause, you lose your right to go work for a competing company or start your own, typically within a certain geographic area and for a certain period of time. Unless you’re willing to move hundreds of miles away or take a huge pay cut to restart your career from scratch, a noncompete can effectively lock you into a job. That’s a clear restriction of individual liberty.

But the aggregate impacts of noncompetes go even further. A body of empirical research shows that they also inflict major harm across the economy. In fact, even if you aren’t personally bound by one, noncompetes may be costing you money.

Noncompetes were long assumed to apply mainly to high-level executives with access to sensitive corporate information. But their use has exploded in the past few decades, extending far beyond the boardroom. Today, experts estimate that one out of every five American workers, or about 30 million people, is bound by a noncompete. Studies and media reports have found noncompetes routinely invoked against fast-food workers, arborists and manual laborers, to name a few examples. Just this week, the Federal Trade Commission, where I am chair, settled allegations against a company in Michigan that prohibited its workers — security guards earning at or near the minimum wage — from going to work for a competitor within a 100-mile radius of their job location for two years. Each worker who violated the noncompete would have been liable for $100,000.

Matt Stoller lays out the fundamentals:

Yesterday, the FTC put forward a proposed rule under which these contracts would become illegal. According to FTC economists, such a change could potentially raise the aggregate wage of Americans by $300 billion a year, which works out to a little less than $2,000 per worker in the U.S. Under the rule, all non-competes would be unenforceable. Existing agreements must be canceled, and employers have to *tell* employees those agreements are null. Moreover, attempts to get around this rule by using non-disclosure agreements or other similar agreements are also banned. It’s just a straight-forward bright-line prohibition, though for statutory reasons it wouldn’t apply to non-profits, certain banks, credit unions, and common carriers.

Legally speaking, this rule is important for three reasons. First, the FTC is wielding rarely used authority to write a rule that prohibits an unfair method of competition. The FTC hasn’t done that since the 1970s. Second, there’s no consumer welfare element, the cases already settled by the FTC didn’t require proving changes to wages or output reductions. And third, this is the FTC trying to ensure competition in labor markets.