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posted by martyb on Friday March 20 2015, @02:53PM   Printer-friendly
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

 
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  • (Score: 1) by rondon on Friday March 20 2015, @07:57PM

    by rondon (5167) on Friday March 20 2015, @07:57PM (#160542)

    Did you use hyper-inflation to imply that the wage growth was a bad thing? Possibly unwarranted? Maybe these engineers and scientists didn't deserve to gain a larger share of the fruits of their labor. I feel like the words you used (much like the words I used, e.g. fruits of their labor), without a definite meaning, get thrown around a lot to make things sound positive or negative.

    I guess my request is that you add clarity to your statements so that I can understand whether you are espousing (or possibly shilling) an ideology or simply adding a fact to the discussion. Most of the other posters at least make it obvious when they shill, so I can take their responses with the appropriate amount of sodium.

  • (Score: 2) by bob_super on Friday March 20 2015, @08:36PM

    by bob_super (1357) on Friday March 20 2015, @08:36PM (#160565)

    That was a statement from the companies' standpoint, trying to justify their reprehensible -and mildly slap-wristed- actions.

    It's been well over a decade since I got a raise above 3% without switching jobs, and I know a few people in the Valley making a killing by playing job-Frogger (some may go Splat soon if they keep pushing their luck). I understand why the big guys would try to illegally reduce mobility artificially, rather than give the required raises.
    Most of the Froggers I know wouldn't endanger their next jump by revealing the competitive stuff they know, and apparently their companies are not asking. So the non-compete in my limited sample is more about avoid the salary competition rather than keeping secrets.

  • (Score: 2) by unitron on Saturday March 21 2015, @08:06PM

    by unitron (70) on Saturday March 21 2015, @08:06PM (#160856) Journal

    What's "deserve" got to do with it?

    It's supply and demand. If Company X wants/needs Engineer Y and Scientist Z badly enough, they'll pay their asking price if they think having them as employees will increase the gross enough to pay them and have an attractive amount left over.

    If not, they won't, and if no one else will either, Y and Z will have to lower their asking price if they want a job.

    --
    something something Slashcott something something Beta something something