Silicon Valley Is the World's Innovation Capital Because of a Technicality
Forcing employees to sign non-compete agreements drives entrepreneurs into states where they have more rights, such as California
This article is for subscribers only.
The secret to Silicon Valley’s triumph as the global capital of innovation may lie in a quirk of California’s employment policy, a new study suggests.
Unlike most states, California prohibits the legal enforcement of non-compete clauses, which force people who leave jobs to wait for a predetermined period before taking positions at rival companies. That puts it in the ideal position to rob other regions of their most prized inventors, according to the paper, published this month in the journal Research Policy.