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Stanford Study Credits Lack of Non-Competes For Silicon Valley's Success
HughPickens.com writes Natalie Kitroeff writes at Bloomberg that a new study says the secret to Silicon Valley's triumph as the global capital of innovation may lie in a quirk of California's employment law that prohibits the legal enforcement of non-compete clauses. Unlike most states, California prohibits enforcement of non-compete clauses that force people who leave jobs to wait for a predetermined period before taking positions at rival companies. That puts California in the ideal position to rob other regions of their most prized inventors, "Policymakers who sanction the use of non-competes could be inadvertently creating regional disadvantage as far as retention of knowledge workers is concerned," wrote the authors of the study "Regional disadvantage? Employee non-compete agreements and brain drain" (PDF). "Regions
that choose to enforce employee non-compete agreements may therefore be subjecting
themselves to a domestic brain drain not unlike that described in the literature on international emigration out of less developed countries."
The study, which looked at the behavior of people who had registered at least two patents from 1975 to 2005, focused on Michigan, which in 1985 reversed its longstanding prohibition of non-compete agreements. The authors found that after Michigan changed the rules, the rate of emigration among inventors was twice as a high as it was in states where non-competes remained illegal. Even worse for Michigan, its most talented inventors were also the most likely to flee. "Firms are going to be willing to relocate someone who is really good, as opposed to someone who is average," says Lee Fleming. For the inventors, it makes sense to take a risk on a place such as California, where they have more freedom. "If the job they relocate for doesn't work out, then they can walk across the street because there are no non-competes."
The study, which looked at the behavior of people who had registered at least two patents from 1975 to 2005, focused on Michigan, which in 1985 reversed its longstanding prohibition of non-compete agreements. The authors found that after Michigan changed the rules, the rate of emigration among inventors was twice as a high as it was in states where non-competes remained illegal. Even worse for Michigan, its most talented inventors were also the most likely to flee. "Firms are going to be willing to relocate someone who is really good, as opposed to someone who is average," says Lee Fleming. For the inventors, it makes sense to take a risk on a place such as California, where they have more freedom. "If the job they relocate for doesn't work out, then they can walk across the street because there are no non-competes."
Great. Then you don't mind if I take a hit out on your life? I mean, its just a contract, the fact its to kill someone doesn't outweigh my liberty to enter into it, does it?
Congratulations, you've just said the stupidest thing I've ever read on the internet. That includes "Where does babby come from".
I still have more fans than freaks. WTF is wrong with you people?
There is no freedom when the contract is de-facto mandatory for employment.
Libertarian crank theory #44732: Contract law trumps all!
Hate pesky worker freedoms? Human rights? Basic human dignity? The laws of physics?
Don't worry! Sign a contract! Contracts are magical documents that can nullify even the most annoying and persistent impediments that get in the way of you god given right to make money.
Simply apply your favorite form of corrosion or obfuscation to get that signature and you're gold!
Libertarian crank theory #44732: Contract law trumps all!
Don't be an ass. It is illegal to MAKE a contract that discriminates in certain ways, breaks certain laws, etc.
Nobody I know thinks "contract law trumps all". You don't know much about Libertarians, do you?
The Libertarian philosophy says that in an ideal world, such laws would not be necessary. But only an idiot thinks we currently live in an ideal world.