HACKER Q&A
📣 deadbeef_abcd

Noncompete Lawsuit Against Bloomberg/Second Measure (YC W15)


The Earnest Analytics Company is suing a former Product Manager to prevent her from working at Bloomberg/Second Measure in violation of her noncompete.

The critical part here is that she is a California employee.

One of Bloomberg's defenses: > The restrictive covenants contained within the RCA are void and unenforceable under California law on the facts alleged, as applied against a California employee attempting to commence new employment in California.

Lawsuit documents: https://iapps.courts.state.ny.us/nyscef/DocumentList?docketId=Kb202IGKAVydWSR0TY2yMw==&display=all

If this lawsuit is successful, is this going to have implications for the tech industry in California? IANAL

  👤 YuriNiyazov Accepted Answer ✓
The argument that Earnest can make here is something like this:

The employment agreement (and therefore, the non-compete) says that it is governed by the laws of the state of New York. The employee, when signing such a letter, agrees that the employment is to be governed by the state of New York, and therefore the non-compete is enforceable. Especially since the other company, Bloomberg/Second Measure, is also a New York company.

This has no consequences for the tech industry in California - a company based in California with employees in California is not going to have an employment agreement that says the agreement is governed by the laws of the state of New York.

This only has consequences for remote workers that live in California and work for companies in states that allow non-competes and the employment agreement says that the employment is to obey the laws of the non-California state.