VentureBeat - Latest Comments in Case closed: Non-competes aren’t good

Re: Case closed: Non-competes aren’t good

Matt — Thu, 06 Dec 2007 19:47:51 -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.

Re: Case closed: Non-competes aren’t good

Matt Marshall — Thu, 06 Dec 2007 19:40:35 -0000

California courts don't enforce it. For the nuances -- and there are many -- read Todd's piece:
http://venturebeat.com/2006...

Re: Case closed: Non-competes aren’t good

John — Thu, 06 Dec 2007 19:32:09 -0000

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

Re: Case closed: Non-competes aren’t good

Matt — Thu, 06 Dec 2007 18:47:29 -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.

Re: Case closed: Non-competes aren’t good

Anthony Kuhn — Thu, 06 Dec 2007 18:06:24 -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.

Re: Case closed: Non-competes aren’t good

Matt — Thu, 06 Dec 2007 16:20:43 -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.