Banning noncompete agreements is something California has been doing right since 1872 when they were first banned.
Another thing California does right is refusing to honor noncompete agreements from other states.
Another thing California does right is refusing to honor noncompete agreements from other states.
Most other states are too beholden to a few big companies and don't see how following suit will only help them over the long term.
Of course things like trade secrets won't be transferred, but the general skills, ideas and know-how can quickly spread from company to company. In contrast, in regions with non-competes, companies are effectively more siloed.
Imagine Facebook had to wait for a couple of years to be able to hire any senior engineers with the knowledge and skills to scale their services.
They would lose momentum, and quite possibly fail as their service would be constrained by severe scaling and reliability issues.
The reason Facebook and other unicorns were able to thrive in SV is because they were able to poach dozens of experienced engineers from other companies, that are all arguably its competitors.
If you like startups, non-competes are some of your worst enemies.
https://www.cnet.com/news/apple-google-others-settle-anti-po...
https://www.reuters.com/article/us-apple-lawsuit/steve-jobs-...
No Fairchild? No FairChildren?
Basically, no Silicon Valley.
According to an Endeavor Insight report: in 2014 of the more than 130 Bay Area tech companies trading on the NASDAQ or the New York Stock Exchange, “70 percent of these firms can be traced directly back to the founders and employees of Fairchild. The 92 public companies that can be traced to Fairchild are now worth about $2.1 trillion, which is more than the annual GDP of Canada, India, or Spain.”
You also have to wonder how litigious the society was at the time; the legal framework and protection available was probably not mature enough in a industry going through renaissance. However, it is certainly different today and the poignancy is encapsulated in this quote by Tom Gallo: When you get sued by a big corporation, you lose no matter what
https://www.wired.com/story/book-excerpt-science-of-ultra-pu...
Also, as a workers rights issue, always ask yourself if the company would do the same for you.
If they ask you to sign a contract saying to give six weeks notice or something silly ask if they would give you six weeks notice of a layoff or termination.
In the case of non-competes you should ask if they don't hire from their competitors too... If they're going to reduce YOUR compensation because of competition from engineers working at other companies it's not a fair claim.
1-3 months mutual notice period is common practice in many countries. In France 3 months is standard.
The examples you listed makes me ask this. Imagine your parents, while raising you, given this option of having their pay reduced by 25%. How likely would the options you listed have been an "opportunity of a lifetime" to them?
I can imagine plenty of people would accept the option of taking 75% of their salary to spend all/most of their time with their young kids for a couple of years.
After tax, it might not work out to much of a difference anyway, especially after you consider the other incidental expenses relating to work (transport, attire, etc).
Of course, no agreement is going to be 100% perfect in every scenario, but this is way more even-handed than a one-way non-compete with no compensation at all.
I just had a quick look (I never had one), non-competes without compensation are illegal in France.
Another possible explanation: "I took a two-year sabbatical to work on my own projects and improve my skills".
One time I got $50k and full salary to stay on with a group that was in run down mode. I wouldn't take that option again.
The US unemployment rates, both youth and overall, are about half of France rates.
Sticky job movement causes friction in both directions, like most sticky economic variables.
Also, Germany laws are not France laws; comparing them is not valid.
Here [1] is a well cited paper showing from theory and empirically that gains in labor do result in unemployment. From the abstract: "Tight hiring and firing rules and military conscription most clearly seem to have adverse effects".
Here's [2] a slightly older one addressing France and Germany in particular, showing what I claimed. France is not Germany; your comparison is invalid.
Here's [3] another heavily cited, more recent paper, that pulls France out in particular. From the abstract: "Heavier regulation of labor is associated with lower labor force participation and higher unemployment, especially of the young."
There's plenty more papers with the same results. Use Google scholar to find them.
You can dislike the results, but ignoring the result and claiming they are not real simply hurts more people through ignoring evidence, thereby avoiding correct solutions to the problems.
[1] https://www.sciencedirect.com/science/article/pii/S014759670...
[2] https://www.aeaweb.org/articles?id=10.1257/jep.11.3.37
[3] https://academic.oup.com/qje/article-abstract/119/4/1339/185...
When normalizing across other variables, this is consistent with the econ literature.
>Clearly it has been demonstrated this is not true.
Cite that it's clearly not true. I don't think it's been clearly shown these have correlation 0 or negative.
>one is not required for the other.
No one has claimed that.
>but that doesn't make it an established thing
Nothing is ever established to the certainty for enough nitpickers. But when the majority of literature of experts leans in one direction, it's safe to bet that their majority opinion is most likely the truth. Sometimes that is overturned, but the majority of expert consensus opinions remain correct.
Do you think that making it hard to fire workers makes it more or less risky on the part of an employer to hire a new worker? If more risky, then how is this offset in hiring?
Employers and markets are not wholly stupid.
Seems more reasonable than locking employees up as part of hiring
For example, a non-compete is legally binding in California is if you sell your business to someone else. Then they can enforce an agreement against your starting a new business competing against the business you just sold them.
I knew California had banned them but I though it had happened a few decades ago at most.
If noncompetes hadn't been banned when California was such a young state, they probably never would have been. It was a time when a lot of things lined up to make it possible.
Interestingly, this also happened in North Dakota.
https://www.noncompetereport.com/2013/01/north-dakota-non-co...
"Employers wishing to protect themselves from unfair competition in North Dakota should tread carefully."
It would be great to get these laws prohibitions of non-competes in more states. It is one of the main reasons I still live in the high cost of living/high taxed state of California.
Massachusetts recently almost banned them, California style, in response to the narrative that the Route 128 tech corridor could have been Silicon Valley were it not for enforceable noncompetes. The law was heavily watered down once industry lobbyists (especially from all the biotech companies) got done with it.
Still, it is a big improvement over the status quo. It limits time to one year, requires 50% compensation during the time when you can't work, and bans the most egregious abuses (noncompetes for minimum wage employees and so on).
They might refuse but the originating state companies have caught on and claim jurisdiction out of CA.