Free the American worker!
After a truly wretched New England winter, news that EMC’s David Donatelli is moving to HP’s sunnier climbs isn’t a total surprise. Nor is it surprising that EMC is trotting out its noncompete agreement to keep Dave from HP.
Bad public policy
The theory behind noncompetes is that a company is protecting its intellectual and commercial property such as customer relationships and product plans. But we already have laws protecting intellectual and commercial property — laws that are quite regularly enforced through civil and sometimes criminal action. Nor is it difficult to suss out who major customers are or what v6.4 of product X will look like.
The problem with noncompetes is twofold. First, they interfere with the free movement of labor to the highest and best use. Shouldn’t Mr. Donatelli be free to take his talents to the highest bidder for the maximum benefit of the free enterprise system?
Second, non-competes are bad for the US economy. Unlike Massachusetts California does not honor them. Yet California has managed to create many more jobs and much more wealth than Massachusetts in the postwar period – despite the Bay state’s early lead in computers and telecommunications as well as DoD and DARPA funding.
Looks like EMC lost this one
If you are a California company following HP’s example could be profitable. As a law firm noted:
If an employee with a noncompetition agreement . . . joins a California company, there is a good chance that the California employee and the new employer may sue in California to invalidate the agreement . . . . The former employer will opt to sue in a state that enforces noncompetition agreements. . . . [U]ltimately, it may come down to whichever side can first obtain a judgment in its favor.
In other words: “you have a good case Mr. Donatelli. How much justice can you – and HP – afford?”
Bay state readers: throw off your chains
Bay state readers: contact your state rep and state senator to support House Bill 1794 that would outlaw all non-competes in the state. Yay!
Somehow I doubt EMC’s top brass is supporting this long overdue reform. But it will be good for you and and your children. Maybe EMC and other companies will be more considerate of employees if it is easier to leave.
The StorageMojo take
There is no evidence that non-competes have helped the economy or the companies that employ them, while hurting labor mobility. Let’s end this relic of medieval serfdom and give labor the same freedom accorded capital.
Hiring companies should also think hard about whether EMC execs are worth the hassle. I’ve seen too many EMC long-timers make a mess at their new company because of cultural differences. EMC’s unique culture has served them well, but it isn’t like most other tech companies.
Courteous comments welcome, of course. I wish HP luck with their new hire. Expect culture shock on both sides.