California has banned noncompete clauses since 1872. It doesn't seem to have killed innovation or destroyed businesses.
The more bans on non-competes spread in the US, the more the SF Bay Area loses one of its main competitive advantages.
Silicon Valley would not exist as a tech leader if non-competes were a thing in California
https://en.wikipedia.org/wiki/Traitorous_eight
https://computerhistory.org/stories/spinoff-fairchild/
https://computerhistory.org/blog/fairchild-and-the-fairchild...
https://law.justia.com/codes/california/2010/lab/2870-2872.h...
You’ve gotta be kidding me.
Venture Capital firms rely a lot more on deal flow and network effects. Their focus is usually on early stage private financing. There are certainly hedge funds which also do similar investing, but by and large they don't play a role during the investing process and largely work with public securities and other instruments. This is also why VC and PE industries tend to hire from B schools, and look for backgrounds very different from hedge funds which by and large tend to pick students from more quantitative or scientific disciplines.
Their terms are governed by the laws of California. If they can’t apply noncompete to employees then how do they get away applying it to customers?
OpenAI's noncompete is unenforceable if you live in California. However, in eight days (1/1/2024) SB 699 [2] goes into effect, extending that protection to everyone outside the state too and AB 1076 [3] amends the section to read “shall be read broadly," broadening the application of the law even further.
[1] https://leginfo.legislature.ca.gov/faces/codes_displaySectio....
[2] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...
[3] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...
How can a state unilaterally extend its jurisdiction across state lines?
If the company leaves California then the state has no jurisdiction over their business.