Monday, August 11, 2008

Utility of Non-Compete Agreements?

A good friend once pointed out to me that "you can't steal clients." Clients have the free will to go where they want to go - and it's in the interest of society that they do have the mobility to do so. The remedy is simple: better service, better products and better pricing. You don't look very hard to find the lamentations over the instability of markets but without them, we'd never have the wealth and opportunities that we have today.

As for why this post (SF Chronicle):

In a unanimous decision, the justices [for California State's Supreme Court] said state law since 1872 has forbidden what are called noncompete clauses that restrict management employees' options after they leave a company.
It will be interesting to see if there will be other states who follow suit.

Update: TechCrunch believes The Noncompete Ruling won't change Anything, Anywhere:
Daniel McCoy, an attorney at Fenwick and West who specializes in employment litigation, says that the ruling is too subtle to have any impact on the law’s standing in other states. Because there has been no real change, no precedent has been set that didn’t already exist, and there’s little for activists to rally around.

Silicon Valley is the world’s technology hotbed, bringing both talent and revenues to California. If the potential economic gains to be seen in states like Massachusetts and Washington aren’t enough of an incentive to drive them to change their policy, we can’t expect this ruling to change anything.

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