California Supreme Court: Non-compete clauses are not enforceable

By Cory Doctorow at 10:05 am Friday, Aug 8

The California State Supreme Court has ruled that non-compete clauses in employment contracts are not enforceable in California. I'm reminded of the study from the Duke Center for the Public Domain that concluded that the reason that the tech corridor on Route 128 near Boston had grown so much more slowly than Silicon Valley was that Massachusetts has enforceable non-competes, while California does not. The researcher concluded that in California, the best talent moved to the best companies, while on Route 128, crummy companies could lock up great people for years at a time through non-compete agreements.

Note that none of this invalidates confidentiality agreements -- you're still not allowed to disclose secrets -- but you're allowed to work for whomever will hire you, without the cold dead hand of your last boss tugging on your belt.

Californians have the right to move from one company to another or start their own business and can't be prohibited by their employer from working for a competitor in their next job, the state Supreme Court ruled Thursday.

In a unanimous decision, the justices said state law since 1872 has forbidden what are called noncompete clauses that restrict management employees' options after they leave a company.

State Supreme Court rejects noncompete clauses (via /.)