5 ms·

California has banned noncompete clauses since 1872. It doesn't seem to have killed innovation or destroyed businesses.

jseliger 3y ago
Banning noncompetes is key to California's tech and other industries: https://www.vox.com/new-money/2017/2/13/14580874/google-self-driving-noncompetes https://www.vox.com/new-money/2017/2/13/14580874/google-self...
- fragmede 3y ago
  Which leads to the question, is this ban in NJ good for California?
  - chaostheory 3y ago
    It is not. 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://en.wikipedia.org/wiki/Traitorous_eight https://computerhistory.org/stories/spinoff-fairchild/ https://computerhistory.org/stories/spinoff-fairchild/ https://computerhistory.org/blog/fairchild-and-the-fairchildren/ https://computerhistory.org/blog/fairchild-and-the-fairchild...
    - deleted 3y ago
      [deleted]
    - lotsofpulp 3y ago
      I don’t think anywhere in the US has a blanket ban on non competes and protection of an employees’ work like California. https://law.justia.com/codes/california/2010/lab/2870-2872.html https://law.justia.com/codes/california/2010/lab/2870-2872.h... https://news.ycombinator.com/item?id=38746969 https://news.ycombinator.com/item?id=38746969
SamoyedFurFluff 3y ago
California doesn’t survive on finance, which is much more woo and social network effects. Who leaves where makes way more waves.
- kstrauser 3y ago
  > California doesn’t survive on finance You’ve gotta be kidding me.
  - smabie 3y ago
    Not that many trading firms / hedge funds in California
    - radicaldreamer 3y ago
      This is more of a function of where these industries developed historically and not tied to non-competes. There’s a lot of financial innovation in California (see crypto/fintech) but trading itself is still tied to proximity and network effects and historical entities (broker dealers etc.)
      - eesmith 3y ago
        See also Hollywood accounting. Return of the Jedi, for example, has never gone into profit.
        deleted 3y ago
        [deleted]
    - mike_d 3y ago
      Venture capital is a fancy word for hedge fund. Pool institutional money and try to do a better job than your peers at picking investments that will yield overall returns for the fund. It only differs in liquidity timeframes. https://en.wikipedia.org/wiki/Sand_Hill_Road https://en.wikipedia.org/wiki/Sand_Hill_Road
bionhoward 3y ago
If noncompete is banned in California then how is the OpenAI customer noncompete legal? https://archive.ph/O9iMu https://archive.ph/O9iMu 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? https://tinyurl.com/cali-openai-complaint https://tinyurl.com/cali-openai-complaint
- kortilla 3y ago
  Because customers and clients are not the same at all?
  - throwup238 3y ago
    The CA law that bans noncompetes actually says "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." [1] 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_displaySection.xhtml?lawCode=BPC&sectionNum=16600 https://leginfo.legislature.ca.gov/faces/codes_displaySectio.... [2] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB699 https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm... [3] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240AB1076 https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...
    - hiatus 3y ago
      > However, in eight days (1/1/2024) SB 699 [2] goes into effect, extending that protection to everyone outside the state too How can a state unilaterally extend its jurisdiction across state lines?
      - kortilla 3y ago
        It’s not, it’s applying it to company’s operating in California. The expansion is to all of their customers/clients. If the company leaves California then the state has no jurisdiction over their business.
deleted 3y ago
[deleted]
pyuser583 3y ago
Didn’t California ban non-competes “by accident” when it just copied a bunch of New York las back in the 1800s?
probablynish 3y ago
NY has a lot of finance/law/consulting businesses that California doesn’t have as much of. It’s possible that the effect of banning non competes would be different for different industries

Banning noncompetes is key to California's tech and other industries: https://www.vox.com/new-money/2017/2/13/14580874/google-self-driving-noncompetes https://www.vox.com/new-money/2017/2/13/14580874/google-self...

fragmede 3y ago
Which leads to the question, is this ban in NJ good for California?
- chaostheory 3y ago
  It is not. 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://en.wikipedia.org/wiki/Traitorous_eight https://computerhistory.org/stories/spinoff-fairchild/ https://computerhistory.org/stories/spinoff-fairchild/ https://computerhistory.org/blog/fairchild-and-the-fairchildren/ https://computerhistory.org/blog/fairchild-and-the-fairchild...
  - deleted 3y ago
    [deleted]
  - lotsofpulp 3y ago
    I don’t think anywhere in the US has a blanket ban on non competes and protection of an employees’ work like California. https://law.justia.com/codes/california/2010/lab/2870-2872.html https://law.justia.com/codes/california/2010/lab/2870-2872.h... https://news.ycombinator.com/item?id=38746969 https://news.ycombinator.com/item?id=38746969

SamoyedFurFluff 3y ago

California doesn’t survive on finance, which is much more woo and social network effects. Who leaves where makes way more waves.

kstrauser 3y ago
> California doesn’t survive on finance You’ve gotta be kidding me.
- smabie 3y ago
  Not that many trading firms / hedge funds in California
  - radicaldreamer 3y ago
    This is more of a function of where these industries developed historically and not tied to non-competes. There’s a lot of financial innovation in California (see crypto/fintech) but trading itself is still tied to proximity and network effects and historical entities (broker dealers etc.)
    - eesmith 3y ago
      See also Hollywood accounting. Return of the Jedi, for example, has never gone into profit.
      - deleted 3y ago
        [deleted]
  - mike_d 3y ago
    Venture capital is a fancy word for hedge fund. Pool institutional money and try to do a better job than your peers at picking investments that will yield overall returns for the fund. It only differs in liquidity timeframes. https://en.wikipedia.org/wiki/Sand_Hill_Road https://en.wikipedia.org/wiki/Sand_Hill_Road

bionhoward 3y ago

If noncompete is banned in California then how is the OpenAI customer noncompete legal? https://archive.ph/O9iMu https://archive.ph/O9iMu 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? https://tinyurl.com/cali-openai-complaint https://tinyurl.com/cali-openai-complaint

kortilla 3y ago
Because customers and clients are not the same at all?
- throwup238 3y ago
  The CA law that bans noncompetes actually says "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." [1] 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_displaySection.xhtml?lawCode=BPC&sectionNum=16600 https://leginfo.legislature.ca.gov/faces/codes_displaySectio.... [2] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB699 https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm... [3] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240AB1076 https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...
  - hiatus 3y ago
    > However, in eight days (1/1/2024) SB 699 [2] goes into effect, extending that protection to everyone outside the state too How can a state unilaterally extend its jurisdiction across state lines?
    - kortilla 3y ago
      It’s not, it’s applying it to company’s operating in California. The expansion is to all of their customers/clients. If the company leaves California then the state has no jurisdiction over their business.

deleted 3y ago

[deleted]

pyuser583 3y ago

Didn’t California ban non-competes “by accident” when it just copied a bunch of New York las back in the 1800s?

probablynish 3y ago

NY has a lot of finance/law/consulting businesses that California doesn’t have as much of. It’s possible that the effect of banning non competes would be different for different industries