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Here’s another example: non-competes stifle innovation

A few days ago I received an email from an entrepreneur that wants to leave his current employer along with two other colleagues to start a new company. Here’s the email with the name removed:

On 1/26/08 7:19 PM, “nameremoved” wrote:

Hi Bijan:

I have been a big fan of your attempts to abolish “non-compete” agreements. Given your expertise and experience, I thought I might try to solicit your advice. A few of my colleagues and I came up with the idea to found a company in the telecom field. Within a week, we received verbal offers from multiple VCs. However, I am stuck with a non-compete with my present company while the other two colleagues have no issues as they never signed it (we all are from the same company). The non-compete is way too broad and covers the entire solar-system. However, as you know the drill, the VC’s don’t want any risks and are proposing to establish the company with only two members who did not sign it. Obviously, I will bow out and let them go forward. But, is there anything that I could do to get my non-compete waived by my present company, instead of waiting to be sued by t hem?

Thanks,
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I asked him a few follow up questions and understood that he works for a large company, he is mid level manager and the product he wants to go build is something well beyond any product roadmap at his current employer.

But as you can see from the email above, the VCs backing the new company with his colleagues aren’t ready to take on the risk of his direct participation in the new venture.

Compare that with the story on TechCrunch today about Gokul Rajaram leaving Google to join a new startup’s board that is doing something (I would argue is) competitive with Google. That’s great for Tumri, will create new opportunities at Google for the younger guys, keep everyone competitive and focused on innnovation across the landscape. California has it exactly right.

We need to get rid of the non-compete clause here in MA, NY, WA and other states.

Please take a look at the Alliance for Open Competition website and consider joining our list of supporters.