Feingold Points Out That DHS's Chertoff Is... >>
<< Airline Plans To Cancel All Flights Booked...
 tdicon 

Legal Issues

by Mike Masnick

Fri, Aug 8th 2008 12:37pm




Filed Under:
california, noncompetes


Good News For Innovation: California Confirms That Noncompetes Are Unenforceable

from the phew dept

Last year, I outlined a bunch of research from the past few years that show how damaging noncompete agreements are to innovation. In fact, some of the research suggests that the single biggest factor in explaining why Silicon Valley became such a hub for tech innovation is the fact that noncompetes are unenforceable here. Studies comparing Silicon Valley to Boston and Michigan are quite convincing on the importance of allowing greater job mobility in order to promote more innovation. In fact, there's a vocal group in Massachusetts that has put a lot of effort into (finally) getting that state to ban noncompetes.

Of course, it appeared that some were pushing in the opposite direction in California (at least via lawsuit). But the good news is that California's Supreme Court has now reiterated that noncompetes are unenforceable here. This is a huge victory for innovation in the Valley.

5 Comments | Leave a Comment

If you liked this post, you may also be interested in...

Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    s, Aug 8th, 2008 @ 1:27pm

    Please oh please...

    ... get the ban turned into law in NJ.

     

    [ reply to this | link to this | view in thread ]

  2.  
    identicon
    Mass. lawyer, Aug 9th, 2008 @ 5:29am

    I don't think that Massachusetts has banned non-competes, or that the link says so either. The sentence is a little misleading (it's the placement of the "finally" that does it, I think).

     

    [ reply to this | link to this | view in thread ]

  3.  
    identicon
    Buzz, Aug 10th, 2008 @ 5:31pm

    I hate non-competition agreements.

    I completely understand and agree with non-disclosure agreements. Non-competition, agreements, make no sense whatsoever. These agreements essentially admit that the business in question is so fragile that anyone could create a similar business in his/her basement. It is unethical to simply lock out opposition instead of innovate to stay ahead of the competition.

    My current employer required a non-competition agreement; I signed it because it restricts itself to the current region I live in. Once I finish school, I plan on moving anyway, so, I tolerate it for now.

     

    [ reply to this | link to this | view in thread ]

  4.  
    icon
    Mike (profile), Aug 11th, 2008 @ 2:01am

    Re:

    I don't think that Massachusetts has banned non-competes, or that the link says so either.

    I wasn't say they had. I was saying that there's an effort underway in Mass to get them banned.

     

    [ reply to this | link to this | view in thread ]

  5.  
    identicon
    Anonymous Coward, Aug 11th, 2008 @ 8:26am

    Non Competes

    I am not a practicing lawyer but I did attend law school. As I recall the basic use of non compete clauses was really to avoid taxes in corporate sales. Will this dodge still work in California?

     

    [ reply to this | link to this | view in thread ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Save me a cookie
  • Note: A CRLF will be replaced by a break tag (<br>), all other allowable HTML will remain intact
  • Allowed HTML Tags: <b> <i> <a> <em> <br> <strong> <blockquote> <hr> <tt>
Feingold Points Out That DHS's Chertoff Is... >>
<< Airline Plans To Cancel All Flights Booked...
 tdicon 
Follow Techdirt
Flattr rss rss
A word from our Sponsors...
Sponsored Resource
Essential Reading
Techdirt Reading List
Techdirt Insider Chat

A word from our Sponsors...
Recent Stories

Saturday

9:00am: Awesome Stuff: Dealer's Choice (2)

Friday

7:39pm: In Defense Of Digital Freedom: It's Time To Get Beyond 'Cyber' Hyperbole (24)
6:40pm: Xbox One Release: Tons Of Questions, Very Few Answers (87)
5:37pm: Think DOJ Spying On Reporters Was 'Unprecedented'? Think Again (6)
5:00pm: DailyDirt: DIY Soda (Pop Or Whatever You Call Carbonated Beverages) (9)
3:51pm: Petition Asks Obama To Support Treaty For The Blind, Rather Than Siding With Hollywood (16)
2:46pm: Fair Use For Me, But Not For Thee (27)
1:45pm: Another Court Tells Prenda To Pay Up On Attorneys Fees (21)
12:45pm: If You Thought Copyright Was A Mess On Earth, What Does It Look Like In Space? (24)
11:45am: Guy Sues Twitter For Taking Away His Twitter Handle (12)
More arrow
A word from our Sponsors...

Close

Email This