A few years back, we explained how non-compete agreements are like human DRM
. We detailed a whole series of research which actually showed the single biggest reason why Silicon Valley became "Silicon Valley," (according to multiple studies) was that unenforceability
of non-compete agreements (yes, there were other factors too, but it was those factors combined with
greater job mobility that created the innovation boom). You can read the details to understand why (and understand the various studies), but the short version is basically that by letting people move around from company to company, you get greater idea sharing among companies, which actually helps them all
advance. While some want non-competes to avoid losing good employees, they ignore the fact that it also blocks them from getting good employees back, and from allowing an incredibly important form of information sharing to occur. One of the more recent studies in this space showed how the collapse of the Detroit auto market followed quite quickly on Michigan making non-compete agreements enforceable (yes, correlation, not causation, but combined with other studies, there's a strong relationship).
There's actually been a big effort in a few other states to make such agreements unenforceable, but apparently some states are going backwards. Benny6Toes
points us to the unfortunate news that Georgia has passed a Constitutional Amendment to make non-compete's more enforceable
. Before this, some non-competes were enforceable, but in a limited way.
What's really ridiculous is that those pushing for this Amendment presented it in terms that were quite clearly the opposite of what the Amendment would do:
"Shall the Constitution of Georgia be amended so as to make Georgia more economically competitive by authorizing legislation to uphold reasonable competitive agreements?"
Even though plenty of people who actually understood this issue knew that it was a ridiculously bad idea
, for those who don't actually understand this issue, who's going to vote against making their state "more economically competitive"? Of course, it's rather scary that Georgia politicians would make such a claim when all of the evidence shows that such non-competes actually make states significantly less competitive. Really a tragic move for the state of Georgia.