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CA Shows Sanity, Strikes Down Noncompete Clauses
AngelHedgie
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Registered User regular
At least something goodd came out of the Enron debacle.
Seriously, this decision is really good news on two fronts. One, it clarifies that employers asking for releases from legal liability can only ask for release from liability not incurred on their sayso. This should help make these releases easier. Two, they struck down noncompetes completely, stating that they are an unlawful restriction on the ability of a person to practice their profession, no matter how tightly scoped. (Up till now, they were legal as long as they were limited in scope.)
Silicon Valley must be shitting themselves over this.
Seriously, this decision is really good news on two fronts. One, it clarifies that employers asking for releases from legal liability can only ask for release from liability not incurred on their sayso. This should help make these releases easier. Two, they struck down noncompetes completely, stating that they are an unlawful restriction on the ability of a person to practice their profession, no matter how tightly scoped. (Up till now, they were legal as long as they were limited in scope.)
Silicon Valley must be shitting themselves over this.
XBL: Nox Aeternum / PSN: NoxAeternum / NN:NoxAeternum / Steam: noxaeternum
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That is pretty huge, yeah.
the "no true scotch man" fallacy.
And it's about time. Companies are going to have to rethink how they're going to keep employees, now that they can't deny them the ability to go work somewhere else.
The ostensible reason my old boss gave me (I had one for my last job) was that it keeps employees from, say, using work from their current job in their next job, or - what seems to me a legitimate concern, given the industry - taking work performed on the clock at one job and running off to start your own company with it. The intent wasn't usually to keep an employee from changing jobs so much as to keep the employee honest.
That said, the potential for abuse was obviously huge, and I'd much rather err on the side of protecting employees than employers.
Which was patent bullshit, Jeffe - that's what NDAs are for. Non-competes were measures to keep employees tethered to an employer. Now these companies that relied on them are going to need to figure out how to retain employees the old fashioned way.
Potential?
Which I would be much more concerned about if there wasn't already covered by civil litigation. I'm pretty much willing to guarantee you no reputable meeting will let a pitch finish without confirming that absolutely no work intellectual or actual work was done while anyone involved with the company was being paid by someone else. Even if some unscrupulous employee managed to get funding anyway, a real company can bury a start up on an easily litigated issue like that.
Example: I hire a Microsoft server engineer to help out with my IT consulting firm. I make him sign a noncompetition clause because if he's meeting people who have IT needs, I don't want him saying, "Well, my company charges $150 an hour, but if you want, I'll do it on weekends for $50 an hour instead."
Because we used to make our engineers and techs sign agreements to that effect when I was still in the consulting business.
the "no true scotch man" fallacy.
That would better fall under the scope of an NDA, I would think (treat your prices as trade secrets.)
Given that they're usually publicly available, I really doubt that would fly. And if it did it'd be worse than non-compete clauses could ever be.
Actually, in consulting, rates aren't publically posted (that's why you see "contact us" on their ads.)
No he's just a free market capitalist.