Comments on: Case closed: Non-competes aren’t good

By: To Compete or Non-Compete « The Trade Secrets Blog

To Compete or Non-Compete « The Trade Secrets Blog — Fri, 07 Dec 2007 23:31:37 +0000

[...] in California through alternatives other than a non-compete. In summing up this complex issue, VentureBeat’s Matt Marshall says it best: “maintaining strict non-disclosure agreements and [...]

By: Case closed: Non-competes aren’t good « Alliance for Open Competition

Case closed: Non-competes aren’t good « Alliance for Open Competition — Fri, 07 Dec 2007 15:27:14 +0000

[...] 7, 2007 Matt Marshall weighs in and supports our point of view. The title says it all.Read the full post here. Posted by opencompetition Filed in [...]

By: Matt

Matt — Fri, 07 Dec 2007 00:47:51 +0000

It’s hard to say much beyond the fact that you are just plain wrong John. Cal Bus and Prof Code Sections 16601, 16602, 16602.5 specifically allow for the enforcement of non-competes in certain narrow circumstances.

By: Matt Marshall

Matt Marshall — Fri, 07 Dec 2007 00:40:35 +0000

California courts don’t enforce it. For the nuances — and there are many — read Todd’s piece:
http://venturebeat.com/2006/11/16/how-to-leave-a-company-and-not-get-sued/

By: John

John — Fri, 07 Dec 2007 00:32:09 +0000

Actually, Matt. Non-competes are not enforceable in the state of California. Better go back and do some more legal research.

By: Matt

Matt — Thu, 06 Dec 2007 23:47:29 +0000

I was just reciting the legal standard. The article said “In California, they [non-competes] are not [enforceable].” That is an incorrect statement.

I actually think that there are plenty of legitimate, economically beneficial reasons to have non-competes, so long as they are not abused. They can be a good bargaining chip to allow an entrepreneur more leverage when selling a company, they can ensure that an acquiror is actually getting what they are paying for, and they can give more certainty to a transaction. Of course they can be abused as well, but that doesn’t mean that there is no value in them.

By: Anthony Kuhn

Anthony Kuhn — Thu, 06 Dec 2007 23:06:24 +0000

Matt:
The only people who benefit from the tyranny of non-compete agreements are the robber barons who hold the capital or means to produce, abetted by sympathetic, rich judges who don’t have to work for a living. Karl Marx would love this stuff, er, I mean, hate it.

By: Matt

Matt — Thu, 06 Dec 2007 21:20:43 +0000

Non-competes ARE enforceable in California. There is certainly a legal presumption against validity, but as long as the agreements are (1) reasonable in scope, duration, and geography, and (2) they are connected with the sale of a business, then they are enforceable.