4 ms·

Non-compete agreements aren't legal in California.

bsder 4y ago
That's not entirely true for people at Dorsey's level. However, it's been almost a year since Dorsey was CEO even though he didn't step down from the board until May. That is pretty close to the limit of what California would really allow in a non-compete.
Manuel_D 4y ago
In terms of personal employment, yes California is very leery of non-competes. In terms of business contracts, absolutely not. If you build a product for a customer, you can agree not to build a similar product for said customer's competitors. This is not unusual. Practical example: one customer was a cruise line, and the company had to tactfully ask if building a similar product for a hotel didn't violate the contract. As opposed to, say, a school which would not reasonably compete with cruise lines - Semester at Sea notwithstanding. If you don't want to agree to this, you don't need to sign a contract not to work with competitors. But of course, the customer is probably not going to want to pay as much if they know that they can very quickly lose whatever edge they're getting.
delecti 4y ago
That's not entirely true. California allows non-competes for someone selling a business. We don't know if Dorsey actually did sign a non-compete, but Musk is buying Twitter so this might be one of the rare instances where it'd be legal in California if he had. Source: California law: https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?division=7.&chapter=1.&part=2.&lawCode=BPC https://leginfo.legislature.ca.gov/faces/codes_displayText.x... > [...] any owner of a business entity selling or otherwise disposing of all of his or her ownership interest in the business entity [...] may agree with the buyer to refrain from carrying on a similar business within a specified geographic area in which the business so sold, or that of the business entity, division, or subsidiary has been carried on, so long as the buyer, or any person deriving title to the goodwill or ownership interest from the buyer, carries on a like business therein

That's not entirely true for people at Dorsey's level. However, it's been almost a year since Dorsey was CEO even though he didn't step down from the board until May. That is pretty close to the limit of what California would really allow in a non-compete.

Manuel_D 4y ago

In terms of personal employment, yes California is very leery of non-competes. In terms of business contracts, absolutely not. If you build a product for a customer, you can agree not to build a similar product for said customer's competitors. This is not unusual. Practical example: one customer was a cruise line, and the company had to tactfully ask if building a similar product for a hotel didn't violate the contract. As opposed to, say, a school which would not reasonably compete with cruise lines - Semester at Sea notwithstanding. If you don't want to agree to this, you don't need to sign a contract not to work with competitors. But of course, the customer is probably not going to want to pay as much if they know that they can very quickly lose whatever edge they're getting.

delecti 4y ago

That's not entirely true. California allows non-competes for someone selling a business. We don't know if Dorsey actually did sign a non-compete, but Musk is buying Twitter so this might be one of the rare instances where it'd be legal in California if he had. Source: California law: https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?division=7.&chapter=1.&part=2.&lawCode=BPC https://leginfo.legislature.ca.gov/faces/codes_displayText.x... > [...] any owner of a business entity selling or otherwise disposing of all of his or her ownership interest in the business entity [...] may agree with the buyer to refrain from carrying on a similar business within a specified geographic area in which the business so sold, or that of the business entity, division, or subsidiary has been carried on, so long as the buyer, or any person deriving title to the goodwill or ownership interest from the buyer, carries on a like business therein