4 ms·
Luckily noncompetes are illegal in California. The Bay Area/Silicon Valley wouldn’t be what it is today without the freedom to move between different companies
by lawrenceyan 7y ago
Luckily noncompetes are illegal in California. The Bay Area/Silicon Valley wouldn’t be what it is today without the freedom to move between different companies and/or start your own company yourself.
Edit: illegal should be replaced with non-enforceable as mentioned below. Initially I didn't see any difference between the two words, but I can appreciate the nuance in meaning now based on hedora's provided example.
- bsder 7y agoThey are unenforceable, but the offending company can still haul you into court and make your life miserable.
- deleted 7y ago[deleted]
- hedora 7y agoNon-competes are unenforceable in California, not illegal. By reading this message, you agree not to accept employment in technology-related firms for the next 25 years. (This comment doesn’t violate the law, it just isn’t worth the electrons it’s written in in a court of law.)
- staticautomatic 7y agoThere are situations in which non-competes are enforceable in CA, just not for regular employees. For instance, if you sell a company you own in part or whole, a non-compete with the acquirer is enforceable.
- staticautomatic 7y agoIdk why anyone is down voting me. I consult on lawsuits for a living and recently worked on one where all the parties, lawyers, and the judge agreed that the non-compete was both valid and enforceable in exactly this situation.
- deleted 7y ago[deleted]
- dang 7y agoPlease don't break the site guidelines by going on about downvotes. Users will often come along and provide corrective upvotes (edit: your original comment has now been heavily upvoted), and then comments like this linger on, no longer accurate but just adding noise. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- your-nanny 7y agobecause voting on HN is broken.
- your-nanny 7y agofirst rule of HN voting is don't talk about HN voting, even if it's friggin broken and lame.
- your-nanny 7y ago-2 I should be proud. hn's voting system is trash and they do their best to make everyone look the other way. kind of dystopian.
- dang 7y agoWould you please stop this? It's strictly noise, and we're trying for better signal/noise, not worse. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- your-nanny 7y agoI know what the guidelines are. I'm protesting them.
- rolltiide 7y ago
- ozim 7y agoI think they downvoted you because that is totally different context than what discussion is about. We are not talking about CEO level agreements but simple workers.
- trjordan 7y agoI sold a two person company to a fifty person company, which triggered this situation. After the acquisition, I was a "normal worker" by most definitions.
- staticautomatic 7y agoI'm not arguing against the point. I'm simply clarifying-- for everyone's benefit-- that the assertion that "non-competes are unenforceable in CA" is not universally true.
- maccard 7y agoYou can be a simple worker and fall afoul of the above - if you have any options or stock you would be considered a part owner and then subject to a possible non compete, even as engineer #n
- staticautomatic 7y agoHow does this work in practice? When you accept employment, you sign a non-compete which commences at the close of a future acquisition? I don't doubt that it's possible but I'm skeptical of the idea that a company can make a unilateral decision that's legally binding on you as an individual simply by virtue of the fact that you're a stock-holder. Has anyone here signed such an agreement? I'd be genuinely interested in reading the non-compete language.
- maccard 7y agoNo, when you're acquired as part of being acquired you sign a non-compete agreement. You're probably renegotiating salary/perks at that point so you'll likely be signing a new contract anyway.
- mrandish 7y agoYou are absolutely correct. I went through exactly this when a large valley tech company bought the startup I founded and I joined the company as part of the deal. My lawyer explained it as "For regular employees these aren't enforceable but you're when you get millions of dollars personally, this is part of what they get in return." Seemed fair enough and we also negotiated the wording to be pretty specific. Basically, I couldn't go make another version of the products they purchased from me as part of the acquisition. However, if I wanted to quit and compete against any of their other pre-existing products I could (even though I wouldn't want to anyway).
- deogeo 7y agoSure is unusual how a lawyer, versed in California employment law, drafting a contract and including terms he knows are unenforceable, in an attempt to mislead a worker and cheat them out of their rights, isn't considered fraud.
- master-litty 7y agoYeah, that's... Interesting. Is this truly something that simply has no repercussions for the lawyer?
- deogeo 7y agoI'm not sure how it is in that specific case, but in general the penalties can be very severe. For example, when Apple was misleading Australians that they have only 1 year of warranty, instead of the 2 guaranteed by Australian law, they received a strongly worded letter from the courts telling them to stop. [1] [1] https://www.zdnet.com/article/apple-forced-to-comply-with-australian-consumer-law/ https://www.zdnet.com/article/apple-forced-to-comply-with-au...
- social_quotient 7y agoParts of the agreement aren’t enforceable but not everything? I’ve seen things like venue and arbitration rules established and persist in otherwise junk agreements. I see a lot of contracts from customers buying our dev services with weird language in it. The opposing counsel would have to know it not enforceable but it’s there anyway. Sometimes it’s silly stuff like “no open source software or code” yet it needs to be MEAN stack running on Ubuntu in AWS.
- lawrenceyan 7y agoAhh, interesting. So I suppose that means many companies add noncompete clauses into their contracts regardless, on the off chance that someday they can be retroactively enforced?
- MiddleEndian 7y agoOr on the more likely occurrence that employees will simply assume they're enforceable.
- matz1 7y agoEven if it legal doesn't mean it should stop you to work with competitor, what matter is how likely it is to cause you trouble.
- Animats 7y agoYes. I used to point that out to visitors from other states who wanted to create "Silicon Austin" or something. Their state won't have the guts to ban noncompetes, so they're doomed to lose.