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from the tell-that-to-Intel,-Apple,-and-Adobe dept.
Natalie Kitroeff writes at Bloomberg that a new study says the secret to Silicon Valley’s triumph as the global capital of innovation may lie in a quirk of California’s employment law that prohibits the legal enforcement of non-compete clauses.
Unlike most states, California prohibits enforcement of non-compete clauses that force people who leave jobs to wait for a predetermined period before taking positions at rival companies. That puts California in the ideal position to rob other regions of their most prized inventors, “Policymakers who sanction the use of non-competes could be inadvertently creating regional disadvantage as far as retention of knowledge workers is concerned,” wrote the authors of the study "Regional disadvantage? Employee non-compete agreements and brain drain" (PDF). "Regions that choose to enforce employee non-compete agreements may therefore be subjecting themselves to a domestic brain drain not unlike that described in the literature on international emigration out of less developed countries."
The study, which looked at the behavior of people who had registered at least two patents from 1975 to 2005, focused on Michigan, which in 1985 reversed its long-standing prohibition of non-compete agreements. The authors found that after Michigan changed the rules, the rate of emigration among inventors was twice as a high as it was in states where non-competes remained illegal. Even worse for Michigan, its most talented inventors were also the most likely to flee. "Firms are going to be willing to relocate someone who is really good, as opposed to someone who is average," says Lee Fleming. For the inventors, it makes sense to take a risk on a place such as California, where they have more freedom. "If the job they relocate for doesn’t work out, then they can walk across the street because there are no non-competes
(Score: 2) by Thexalon on Friday March 20 2015, @06:39PM
Those kind of contracts happen all the time. For example, your contract with your ISP might say that you will pay them $X every month, and they'll hook up your Internet service and send someone to fix it if they screw up and will provide phone support.
The assumption with contract law is that you made the decision freely, knew exactly what you were getting into, and chose to enter into that agreement. That assumption might not be warranted, but that's the assumption.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 3, Interesting) by snick on Friday March 20 2015, @06:57PM
The funny thing about non-compete clauses is that the ultimate remedy for problems over any other clause in your contract is often for the principals to part ways. If I decide that I'm not going to abide by some not-explicitly-compensated term of employment ... I can walk away, or my employer can tell me to get lost, and there is no further obligation on either side after our relationship is terminated. Non-compete clauses follow you _after_ you have severed the relationship with your employer.
I'm not saying that they are illegal (many courts have said that they are not) or even unique ... just that they are really not like most other clauses in contracts. And in my (non-legal) opinion, allowing obligations for which no explicit compensation was offered to survive beyond the duration of employment feels like cheating.