Yes and no
by catripledomer (2024-04-24 10:38:36)

In reply to: It’s been the law in California for 150 years.  posted by Kali4niaND

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In California, Noncompete Clauses are valid for key individuals, but not for a vast majority of workers. If you are a company founder who sells the company, you can, under California law, be bound by a non-compete from starting a new company that is similar under certain conditions. I don't think this is a bad idea.

Blanket elimination of non-compete clauses just means that now the price that someone will get for selling their business will be substantially less than they received before because the risk is higher that they will just go start a new, identical business. This can be mitigated through earn-outs and similar instruments, but essentially all this will do is reduce the selling price of businesses.

I wholeheartedly agree that noncompetes shouldn't exist for most workers. They do have a role in M&A transactions, though.

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