Non-Compete Agreements are Bad for Business

As you may know, New York and most other states do not prohibit non-compete agreements. In fact, NY courts will enforce these agreements. In California, non-compete agreements have been prohibited since 1850 and many believe that this policy has contributed to the growth of California’s economy and especially so in the technology field.

A while back, the National Law Journal ran an article by Richard A. Booth that suggests that California’s law against non-compete agreements may actually be good for business – especially the technology business. Mr. Booth argues that without non-compete agreements, companies are forced to retain quality employees with equity or other inducements. He also argues that with out the shackles of non-compete agreements, good employees are free to leave less productive companies at will. He suggests that this freedom of movement creates a more efficient marketplace and allows the best employees to be drawn to the best companies.

In New York, by contrast, good employees get trapped with bad companies by non-compete agreements and this hinders growth as human resources get stuck in poorly run companies. The net effect of non-compete agreements is that employees lose the ability to move and the economy is handicapped. Companies can tie up human resources with non-compete agreements. In my opinion, New York should change its ways and stop letting companies hamper the market place with non-compete agreements.

Robert Ottinger, Esq.

Robert Ottinger is an employment attorney who focuses on representing executives and employees in employment disputes. Before starting his firm, Robert slugged it out in courtrooms trying cases for the government. Robert served as a Deputy Attorney General for the California Department of Justice in Los Angeles and then as Assistant Attorney General for the New York Attorney General’s Office in Manhattan.

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