4 ms·

One of the key factors to Silicon Valley's success has been a lack of non-competes. It's about time to unlock that innovation in the rest of the country.

tptacek 3y ago
Until relatively recently, noncompetes were practically universal in Silicon Valley, very much including among startups.
- lotsofpulp 3y ago
  Do you mean since this 2008 ruling? https://www.cnet.com/tech/tech-industry/calif-supreme-court-finds-noncompete-clauses-invalid/ https://www.cnet.com/tech/tech-industry/calif-supreme-court-...
  - tptacek 3y ago
    Yes, though I feel like noncompetes were pretty standard for several years after that. Certainly in the years leading up to it they were; not only were noncompetes normal, but so too were IP contracts that assigned any side-project work you did in your off hours to your employer. All I'm saying is that you get well past the Google IPO before it becomes broadly accepted that noncompetes are invalid in California, which certainly rebuts the idea that Silicon Valley succeeded due to a lack of noncompetes. (Noncompetes are mostly very bad.)
    - anon291 3y ago
      Noncompetes are virtually unenforceable everywhere. Our business law professor told us to ignore them as long as you never accept payment for them. Or you can simply not sign them.
      - tptacek 3y ago
        I have personal friends who lost jobs when their employers were threatened with interference lawsuits for hiring them while they were bound by a noncompete. More than one. They are not virtually unenforceable.
        anon291 3y ago
        It wasn't enforced in your friend's cases though. Their employers got the heebie jeebies. That's an at-will issue. I do agree that the NLRB should go on an advertising campaign to inform employers that previous employers threatening legal action basically have no basis in law and you should just send them a reply saying 'No thanks'. Because that's what you should do in virtually all circumstances.
        kelnos 3y ago
        I think the distinction doesn't really matter. If an action taken by a company -- even if based on illegal contract terms -- causes harm, then the effect is the same. The idea of the "chilling effect" is predicated on this: if someone can ruin your life even if you are in the right and they are in the wrong, it doesn't matter what the law actually says.
        anon291 3y ago
        I agree, and I would like to see tougher enforcement of such behavior.
    - polpo 3y ago
      Pretty standard in that they were included in what you sign when you start a job? Or standard that they were actually enforced? When I was in California in the mid 00s I worked at several jobs that gave me a noncompete to sign when I started, and I knew then that they were unenforceable.
    - lmkg 3y ago
      > the idea that Silicon Valley succeeded due to a lack of noncompetes When people say "Silicon Valley succeeded," they're talking about Silicon Valley, the mythologized founding of the semiconductor industry in the 50's and 60's, beginning with the so-called Traitorous Eight. I think Apple's origins are also believed to have been enabled by the non-compete-less environment. It doesn't as much play into the success from the Dotcom era onwards.
- Hizonner 3y ago
  In case you're unclear, Silicon Valley is in California. Noncompetes have been legally unenforceable in California (in nearly all circumstances) for longer than there's been anything called "Silicon Valley". https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=16600.&nodeTreePath=9.2.1&lawCode=BPC https://leginfo.legislature.ca.gov/faces/codes_displaySectio... People have been known to write them. In fact it got so bad that the California AG had to issue a press release a couple of years ago as a "reminder" that they weren't enforceable. But they have never had any effect other than to intimidate the stupid.
  - tptacek 3y ago
    Maybe all the contracts I saw there were unenforceable, even before the California Supreme Court case everyone talks about, but they were certainly common (I lived and worked in California in the late 1990s and early 2000s).
    - Hizonner 3y ago
      I took my first job in California, at a company in Silicon Valley (in the actual silicon industry), in 1985. Everybody knew noncompetes were unenforceable then, and in fact nobody asked for them. The 1990s Web kids had a certain ideology that led them to believe that no law could possibly say what California law has said since 1872. But it has always said that.
      - tptacek 3y ago
        There were exemptions to the ban, right? Maybe all these noncompetes were done under the auspices of the trade secret exemption? I believe you, and I'm glad you called me out, but I also trust my own memory of this. There's a string of HN stories about it, as well.
        Hizonner 3y ago
        I replied to myself thinking I wouldn't be allowed to reply to this. Just in case this notifies you in some way that that doesn't.
- toast0 3y ago
  The noncompetes I've seen in California tech companies prohibit simultaneously working for the company and its competitors. But you could always quit to work for the competitor, as long as you don't break the confidentiality agreement and don't break the recruiting agreement. It's more complex when you work at a megatech company and there's barely anything you can do that could not be consider competition, but at a smaller company, it's not too restrictive.
phendrenad2 3y ago
> One of the key factors to Silicon Valley's success has been a lack of non-competes. Yes and I think that was a big factor when tech was made by "hackers" who had an open disdain for the rules. I think that lately even an unenforceable noncompete is enough to scare people away from competing directly with a former employer. And let's not forget the infamous Meta/Oculus fiasco (trade secrets issue, but close enough).

tptacek 3y ago

Until relatively recently, noncompetes were practically universal in Silicon Valley, very much including among startups.

lotsofpulp 3y ago
Do you mean since this 2008 ruling? https://www.cnet.com/tech/tech-industry/calif-supreme-court-finds-noncompete-clauses-invalid/ https://www.cnet.com/tech/tech-industry/calif-supreme-court-...
- tptacek 3y ago
  Yes, though I feel like noncompetes were pretty standard for several years after that. Certainly in the years leading up to it they were; not only were noncompetes normal, but so too were IP contracts that assigned any side-project work you did in your off hours to your employer. All I'm saying is that you get well past the Google IPO before it becomes broadly accepted that noncompetes are invalid in California, which certainly rebuts the idea that Silicon Valley succeeded due to a lack of noncompetes. (Noncompetes are mostly very bad.)
  - anon291 3y ago
    Noncompetes are virtually unenforceable everywhere. Our business law professor told us to ignore them as long as you never accept payment for them. Or you can simply not sign them.
    - tptacek 3y ago
      I have personal friends who lost jobs when their employers were threatened with interference lawsuits for hiring them while they were bound by a noncompete. More than one. They are not virtually unenforceable.
      - anon291 3y ago
        It wasn't enforced in your friend's cases though. Their employers got the heebie jeebies. That's an at-will issue. I do agree that the NLRB should go on an advertising campaign to inform employers that previous employers threatening legal action basically have no basis in law and you should just send them a reply saying 'No thanks'. Because that's what you should do in virtually all circumstances.
        kelnos 3y ago
        I think the distinction doesn't really matter. If an action taken by a company -- even if based on illegal contract terms -- causes harm, then the effect is the same. The idea of the "chilling effect" is predicated on this: if someone can ruin your life even if you are in the right and they are in the wrong, it doesn't matter what the law actually says.
        anon291 3y ago
        I agree, and I would like to see tougher enforcement of such behavior.
  - polpo 3y ago
    Pretty standard in that they were included in what you sign when you start a job? Or standard that they were actually enforced? When I was in California in the mid 00s I worked at several jobs that gave me a noncompete to sign when I started, and I knew then that they were unenforceable.
  - lmkg 3y ago
    > the idea that Silicon Valley succeeded due to a lack of noncompetes When people say "Silicon Valley succeeded," they're talking about Silicon Valley, the mythologized founding of the semiconductor industry in the 50's and 60's, beginning with the so-called Traitorous Eight. I think Apple's origins are also believed to have been enabled by the non-compete-less environment. It doesn't as much play into the success from the Dotcom era onwards.
Hizonner 3y ago
In case you're unclear, Silicon Valley is in California. Noncompetes have been legally unenforceable in California (in nearly all circumstances) for longer than there's been anything called "Silicon Valley". https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=16600.&nodeTreePath=9.2.1&lawCode=BPC https://leginfo.legislature.ca.gov/faces/codes_displaySectio... People have been known to write them. In fact it got so bad that the California AG had to issue a press release a couple of years ago as a "reminder" that they weren't enforceable. But they have never had any effect other than to intimidate the stupid.
- tptacek 3y ago
  Maybe all the contracts I saw there were unenforceable, even before the California Supreme Court case everyone talks about, but they were certainly common (I lived and worked in California in the late 1990s and early 2000s).
  - Hizonner 3y ago
    I took my first job in California, at a company in Silicon Valley (in the actual silicon industry), in 1985. Everybody knew noncompetes were unenforceable then, and in fact nobody asked for them. The 1990s Web kids had a certain ideology that led them to believe that no law could possibly say what California law has said since 1872. But it has always said that.
    - tptacek 3y ago
      There were exemptions to the ban, right? Maybe all these noncompetes were done under the auspices of the trade secret exemption? I believe you, and I'm glad you called me out, but I also trust my own memory of this. There's a string of HN stories about it, as well.
      - Hizonner 3y ago
        I replied to myself thinking I wouldn't be allowed to reply to this. Just in case this notifies you in some way that that doesn't.
toast0 3y ago
The noncompetes I've seen in California tech companies prohibit simultaneously working for the company and its competitors. But you could always quit to work for the competitor, as long as you don't break the confidentiality agreement and don't break the recruiting agreement. It's more complex when you work at a megatech company and there's barely anything you can do that could not be consider competition, but at a smaller company, it's not too restrictive.

phendrenad2 3y ago

> One of the key factors to Silicon Valley's success has been a lack of non-competes. Yes and I think that was a big factor when tech was made by "hackers" who had an open disdain for the rules. I think that lately even an unenforceable noncompete is enough to scare people away from competing directly with a former employer. And let's not forget the infamous Meta/Oculus fiasco (trade secrets issue, but close enough).