3 ms·

If Palantir is a CA business entity (I didn't check, maybe it's a DE corp), its noncompete should be per se invalid (= automatically void) in CA. There are only

If Palantir is a CA business entity (I didn't check, maybe it's a DE corp), its noncompete should be per se invalid (= automatically void) in CA. There are only a few circumstances in which noncompetition agreements are valid in CA, and this doesn't seem to be one of them. See section 2.1.2 in: https://en.wikipedia.org/wiki/Non-compete_clause#Exceptions_-_valid_non-compete_agreements_in_California https://en.wikipedia.org/wiki/Non-compete_clause#Exceptions_... Palantir's attorneys surely can't have missed this, but I don't see an alternative.

argonaut 10y ago
This is one of the exceptions to noncompetes in California - when you sell your interest in a company. They are a Delaware corp. They have tons of employees outside of California (New York?).
- Steeeve 10y ago
  Actually, I think you have to be selling the whole business - but from my comment above - it's not part of the employment agreement, so ... it's possibly enforceable. Maybe not, but I wouldn't count on it either way.
Steeeve 10y ago
A non-compete clause in an employment agreement isn't valid. I think it's arguable for a stock option agreement. At that point it's not a one-sided agreement. The employee is gaining something in exchange for their non-compete, and can opt out if they want. I would bet they don't apply that to existing employees, but they'll give it a shot on anyone hired since the change. If this turns into a trend, it will mean a very interesting change to silicon valley culture. I read a blog post a couple of days ago that the average tenure for a software engineer at a medium to large company in SV was 1.5 to 2 years. With an effective way to push non-compete agreements on employees, that would be... significant. It would take a lot of companies doing it at once, though. Otherwise everyone would simply avoid the handful of firms that did it. After looking at this summary, I wouldn't work for Palantir. If I did, I'd have to consider the stock completely valueless.

argonaut 10y ago

This is one of the exceptions to noncompetes in California - when you sell your interest in a company. They are a Delaware corp. They have tons of employees outside of California (New York?).

Steeeve 10y ago
Actually, I think you have to be selling the whole business - but from my comment above - it's not part of the employment agreement, so ... it's possibly enforceable. Maybe not, but I wouldn't count on it either way.

Steeeve 10y ago

A non-compete clause in an employment agreement isn't valid. I think it's arguable for a stock option agreement. At that point it's not a one-sided agreement. The employee is gaining something in exchange for their non-compete, and can opt out if they want. I would bet they don't apply that to existing employees, but they'll give it a shot on anyone hired since the change. If this turns into a trend, it will mean a very interesting change to silicon valley culture. I read a blog post a couple of days ago that the average tenure for a software engineer at a medium to large company in SV was 1.5 to 2 years. With an effective way to push non-compete agreements on employees, that would be... significant. It would take a lot of companies doing it at once, though. Otherwise everyone would simply avoid the handful of firms that did it. After looking at this summary, I wouldn't work for Palantir. If I did, I'd have to consider the stock completely valueless.