The Wall Street Journal: Noncompetes are "Innovation-Killing"

| Andrew P. Torrez

We saw this over the weekend and thought you might like to know:  more on last week’s revelation that Massachusetts Gov. Deval Patrick (D) favors the “California policy” of making employee covenants not to compete generally unenforceable under state law.

As we told you last week, the linchpin of the administration’s argument is that while noncompete clauses may be perceived as generally pro-business, in the technology sector – a huge market in California, obviously, but also a significant industry in Massachusetts – many believe that the enforcement of noncompetes may hinder employee mobility necessary for such startups to thrive.  In this particular area, then, what's good for employees may also be good for employers.

This weekend, Gov. Patrick got an assist from a rather unlikely source – The Wall Street Journal.  Greg Gretch, managing director of Sigma West, a venture capital firm targeting technology startups, argues that noncompete agreements are “innovation-killing” and credits California’s decision not to enforce noncompetes for turning San Francisco into a “hot-bed of new startup activity.”  Mr. Gretch’s piece can be read in full here; it's worth checking out.

Information provided on InsightZS should not be considered legal advice and expressed views are those of the authors alone. Readers should seek specific legal guidance before acting in any particular circumstance.

As the regulatory and business environments in which our clients operate grow increasingly complex, we identify and offer perspectives on significant legal developments affecting businesses, organizations, and individuals. Each post aims to address timely issues and trends by evaluating impactful decisions, sharing observations of key enforcement changes, or distilling best practices drawn from experience. InsightZS also features personal interest pieces about the impact of our legal work in our communities and about associate life at Zuckerman Spaeder.

Information provided on InsightZS should not be considered legal advice and expressed views are those of the authors alone. Readers should seek specific legal guidance before acting in any particular circumstance.

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