Thursday, August 14, 2008

Non-compete Ruling May Indirectly Help Broken Organizations

Last week's California court ruling against non-competes is interesting, not least because I've had one client who was more interested in a getting me to sign a specially crafted non-compete that he hoped to use in a lawsuit than in having me actually deliver work.

Actually I'm not sure this ruling would even affect independent contractors like me; the view of employment law towards contractors (where it applies at all) is very different from that toward employees.

This ruling may play a small role spurring innovation by making it easier for employees to quit and then compete with their former employer.

I'm also hopeful that the newly prominent threat of such competition may encourage dysfunctional tech organizations to renew their efforts at achieving better group dynamics. (Is there such a thing as therapy for whole organizations? No, I don't mean those motivational or consulting clown-schools that involve offsites and create a distraction ... at least until the check is cashed.)

In addition to the ominpresent threat that one's best employees might leave, there is now renewed emphasis on the fact that a group of them might well leave together and "do it right" if they can.

While the ruling does not of course give anyone license to loot protected IP from the former company, history shows that's rarely the issue in Silicon Valley anyway.

Every development manager should view this as a wake-up call to think about keeping the team on board.

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