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Job hopping helped Silicon Valley thrive. So why do other states restrict it?


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Did California's lack of noncompetes -- not only are they not enforced, the ENTIRE employment agreement is void if one is present! -- lead to a more robust tech economy?

This theory has both proponents and skeptics:

Could the success of Silicon Valley simply be a coincidence that has little to do with its noncompete law? There are a few empirical studies looking at the economic impact of states' noncompete rules. One study found that Michigan suffered from "brain drain" after it began enforcing noncompetes more strictly. Another found that venture capital goes further — leading to more startups and more job creation — in states that don't enforce noncompetes.

Still, Evan Starr, an economist at the University of Maryland who has studied the economic impact of noncompete agreements, describes the evidence on the impact of noncompete agreements as "relatively thin."