More on non-competes

Bijan Sabet is once again talking about getting rid of non-competes. And it looks like he is fairly serious about actually trying to do it, not just giving his opinion. I have discussed that subject here before, but I have stuff I want to add...

Non-competes are ridiculous. I have one in my contract and it prevented me from looking for another job while my company was spiralling down. Even though I knew they are difficult to enforce (it's hard for a company to prevent an individual from making a living) I didn't want to take the chance.

About a decade ago I was working for a very small IT consulting company. They started contracting me out to do programming for another small web start-up that happened to have a lot more money for about ten what they were paying me. The start-up ended up making me an offer of three times my current salary, but the original company had written a no-hire clause into the contract. The CEO of the start-up brought in his big expensive lawyers and they figured out a way around that clause for me. They did not hire me - they hired my company to do work for them. They also paid me ridiculous sums of money in addition to the base salary as bonuses and incentives or maybe just to burn money. The CEO of the start-up went bankrupt, pissed off all of his friends who had invested lots of money in his company, and got divorced. I haven't heard of him in about 7 years. The guy who owned the original consulting company is still plugging away, I am still in touch with him, and consider him a friend.

This story doesn't really apply to non-competes, although I suppose it could. I am also reminded of the lessons I learned while working for that start-up, which could be a whole other post. But right now we are discussing non-competes.

I don't know about employment laws in California at all, as Bijan pointed out in response to my last post, I guess my wife is probably not the best legal expert on California employment law, despite her having many, many jobs in California. But I do believe that non-competes stifle innovation and creativity. What is the point when you have NDAs and confidentiality agreements that cover the same effect but are much more enforceable (to a degree at least).

I don't know about the company, but the non-compete forced me to take huge risks upon myself and my family, namely that this company would be able to keep us clothed, fed and sheltered for the two year term of the non-compete. It was a two year contract and I assume the non-compete would have extended for two years past the end of the contract. So that's four years of my life I had to lock up! They compensated me for taking that risk with equity, but that equity is now worthless due to gross incompetence on the part of the management team.

What could have happened if the non-compete was not there? I would have felt more comfortable looking for another job. I may have gotten an offer from, say, Google. They could easily bankroll any legal defense I would have to put up against the company. They could crush the company with their pinky, or buy us with pocket change (which, incidentally, they did want to do but did not due to the gross incompetence and unfettered arrogance of the management team.) So the only effective difference is my comfort level and pocket change for Google in possible legal costs.

More will be written on the situation regarding my company as I can without compromising anything, but as for non-competes... They are silly and ridiculous and pointless.

Go here to voice your support for eliminating non-competes.

Noncompete Clauses, Advertising and Natalie Del Conte

Natalie Del Conte is moving to NY! Sweet! She is so cute. Although I will likely never meet her it is nice knowing that she is close by.

AdBrite is switching AVN Ads over to Black Label Ads and Etology is taking over AVN Ads. I use both AdBrite and Etology so it doesn't really effect me at all.

Fred Wilson on why start-ups fail, from a VCs perspective.

Some guy wants to get rid of non-compete clauses. That would be nice as I have one in my contract. However I have heard that they are extremely difficult to enforce from the company's perspective. Apparently the courts are not too keen on letting companies deny people the right to make a living. Something about the Constitution.