In fact, lack of noncompetes is probably one of the biggest reasons Silicon Valley was able to take off in the 1950s-60s when people were constantly leaving their jobs to start new chip companies, starting with the original "traitorous 8" who founded Fairchild Semiconductor.
There just aren't good arguments for noncompetes. People often bring up trade secrets, but that's not convincing -- there are already laws against stealing trade secrets, so you don't need noncompetes for that. Look at Anthony Levandowski as a high-profile example of someone who stole trade secrets in California and got nailed.
I have often seen it enforced as, you can go (after your notice period/gardening leave) but you have to stay away from a set of clients for the period of your non-compete.
The tech industry in California does just fine without noncompetes.
Just noting a typo for anyone confused by the wording, I'm sure you meant "the unenforceability of noncompetes is..." or something along those lines.
Fun fact: noncompete agreements have been void in California since the 1800s.
Technically yes, but to play devil's advocate: it's easy for someone to provide trade secrets to a new employer without leaving a trail of evidence behind, and it's a lot easier to prove someone worked for a competitor than it is to prove someone gave a competitor trade secrets, so there is a valid argument for why employers might want to enforce non-competes.
Whether that justifies their enforceability or not is a different question.
I'm reading his Wikipedia page:
> While working at Google, Levandowski established other companies as side projects,[17] including 510 Systems and Anthony's Robots, which were later bought by Google.[18]
tl;dr: he certainly has some balls! Any idea why he even left Google? It sounds like they paid him a total comp of some 120 mil, and he worked there for just 9 years, that's an average of 13 mil a year, not small change by any measure (although I guess that might include the price they've paid for the companies he founded).
I guess he wanted them to keep buying his new companies again and again?
I think the standard argument isn't trade secrets. The standard argument is that you want to incentivize employers to train employees.
If I, as an employer, train you for 6 months, then you leave at month 7 for a higher salary (which you can demand cause you have more training/experience), I lose out. So I have no incentive to train you. So training or hiring of people without experience never takes place (or does so at a lower rate).
If you are someone without experience, and there was a way for you to credibly commit to not moving to a new job (e.g. by signing a non-compete), then you might want to make that bargain - it's worth it for you to sign away some freedom in order to get some advantage (which is kind of the basis for all contracts).
That's the theory, anyway. I have no idea how much it holds up in the real world.
> The tech industry in California does just fine without noncompetes.
Obviously, the counterargument is that it could be doing even better, we just don't know it.
Note that if the standard argument is correct, then there's a chance that the biggest group of people hurt by lack of noncompetes are people without experience. You might not necessarily be feeling their pain, depending on your social circle (e.g. if you're a working developer in an SV company, you're surrounded by the people who did make it, not by the possibly numerous people who faced closed doors because of this).
Charge tuition for training and offer "student loans" with no payments or interest while you're working for the company which are forgiven if you stay for five years or whatever. Then if somebody wants to poach you right away, that's fine, they can just pay off your training loan.
You could also just forget about the loan forgiveness, charge "tuition" unconditionally and then pay more to make up for it.
Pay higher than others and employees won’t leave you.
Make delayed payments part of compensation, so employees get the money only if they stay long enough.
Don’t hire employees who change jobs too often.
There are many ways to keep employees from leaving without damaging their careers.
If you train me and I get better at my job, I deserve more money. If you don't give it to me, I will work for someone else who will pay me more.
Good companies train their employees and also do what it takes to retain them. It's a two-way street. Why should you get to extract more labor value from me without paying me more?
CFO: We loose money if we train an employee and he leaves. CEO: What if we don‘t train them and they all stay?
It amounted to little more than lawyers talking back and forth for a little bit, and coming to an agreement about what the engineers could and couldn't work on for OCI, and for what time period. I hate to think how much it was costing both companies in terms of legal fees given how many made the jump.
I would imagine Google was doing the same thing, but presumably this time couldn't get to an agreement, or Amazon decided it was time to make some noise again (it seems to happen every year or so). Amazon never seems crazy enough to let it actually get to court and risk judgment going against them / their non-compete.
A former professor of mine once said... If there's one laywer in town, they drive a Chevrolet. If there are two lawyers in town, they both drive Cadillacs.
When somebody else pays for your lawyer she's not your lawyer.
Usually (and I know this from personal experience) if you are senior enough you have a notice period of 3-6 months and under normal circumstances you are expected to do a proper handover before leaving. Sometimes they don't want you to come in to the office or have access to the corporate network/data but they still want access to you in case they need it.
Non-competes are usually 18-24 months and I don't think anyone is going to pay that for you to sit on your butt.
https://www.pewtrusts.org/en/research-and-analysis/blogs/sta...
"Jimmy John’s drops noncompete clauses following settlement"
https://www.cnbc.com/2016/06/22/jimmy-johns-drops-non-compet...
This is a terrible idea.
You may be a lot more valuable vs what they were previously paying you. Perhaps you were being undervalued, or the new company has a need for you that places a high premium on you. So now the former company can veto your future and hold you at your previous income.
The new opportunity also may far exceed the past opportunity in potential compensation (in your estimation, even if it's a wild-eyed thinking), or the opportunity is one you want to take and it's not the money driving you. That veto that is holding you in place, is a potential economic straightjacket and is also a veto over a choice to pursue a quality of life improvement by taking a better / more fulfilling job.
Hyper rich corporations like Amazon will hold talent hostage just to deny them (and their expertise) from another company, which is entirely unfair to the employee in question. The tech giants already frequently roach motel talent as it is and they've been doing it for decades, I'd hate to see this practice further entrenched (and particularly against the will of the employee).
If it's perfectly clear what it covers, then the employee can decide whether it's acceptable, try to negotiate it, or decline the terms, just like any other provision in a contract.
Noncompetes are terrible, and you should be prepared to pay out of your nose if you want to keep an employee off the market.
As long as you're not forced to pay that money, it's all good. It just means that the employee can actually switch jobs immediately (for a better pay or not) unless you're willing to pay them however much they're willing to stay out of the market for.
Say I make $100k today. I get an offer at a place I really like, for $150k. I'd really like to go there, but they're also a competitor. I offer to stay home for $200k, and if you don't want to pay that much, then I go to work for $150k.
Then just be open about it and say you want to remove non-competes. Nothing bad about it, but inventing clauses which makes them effectively forbidden, but not really just clogs up courts.
I think it would be reasonable to allow non-competes, however, the company should have to keep paying you your full compensation (salary, stock, bonuses, etc) for as long as they keep you from being employed.
Sure, give the old employer veto power for a new job as long as they keep paying them for the lockout period.