Our bill to reduce abuse of non-competition agreements is still alive in this session.
The Globe just ran an op-ed from me and cosponsor Lori Ehrlich about the issue.
The basic purpose of the bill is to narrow the use of non-competition agreements — too many employees are unable get new jobs as a result of having signed these agreements. The strategy of the bill was to create an incentive for employers to write less restrictive agreements by charging attorneys fees to the employer in cases where a court found that an agreement was too restrictive. We’ve been unable to get agreement around this approach and are thinking of taking a simpler approach — perhaps just shortening the maximum term of non-competition agreements.
Our hope at this stage is to get the legislation added in to some other package — perhaps the “jobs” package that may be moving in the Senate. Hard to tell what will happen at the end of the session, but we are still hopeful.
Will, there’s no need or purpose for compromise here. Just junk them completely, just like California. If it works well there, it can work well here.
Not 100% what the very best theoretical answer is, but there is definitely a political need for compromise — some progress is better than no progress.
David is right, theoretically — a ban would be best. If significant progress isn’t made soon, the alternative is an initiative petition for a statewide referendum on a ban. It’s an incredible amount of work and would take serious money for advertising to explain the issue statewide and rebut whatever misleading ads opponents create; but it does produce some motion. Just look at teachers’ seniority.
Not that this subject comes up very often but I have never run into anyone who didn’t think noncompetes weren’t self-evidently a terrible idea. As David Chase says, the example of California seems like a proof by existence that there is no point in inflicting this infringement on personal liberty on our workforce. Is there really another side to this question — one that explicitly takes California into account? How would it work? Is there a non-absurd claim that Massachusetts industries are by their nature more dependent on non-competes than California industries? That Silicon Valley would be even more prosperous and dynamic if they had the same non-compete system we do? I can’t think of an argument that isn’t ridiculous. What would a lobbyist say?
Completely agree – ditch ’em. Anyone who depends on a no-compete as a business vehicle should be shipped to soviet-era Russia. If you can’t retain key resources then you deserve, as a company, to lose them. If they become a viable competitor, you stupid for not trying to retain them. If they put you out of business… even better… competition is good. No-competes are for 5-year planners.
Thank you to you and Lori for the op-ed and for continuing to pursue this important legislation.
I look forward to hearing any news of further progress, such as incorporating the legislation into the Senate jobs bill. Any new information gained from yesterday’s Boston Bar Association symposium (https://www.bostonbar.org/membership/events/event-details?ID=11405) would also be appreciated.
Update: It didn’t make it into the jobs bill.
But I do feel we are making good progress in increasing awareness of the issue and moving towards action in future sessions.
Apparently non-compete law is one area where labor law is actually stronger in China and India than in the US:
Re China, from http://www.chinalawblog.com/2010/01/employee_noncompete_agreements.html “Employers simply need to face the fact that non-competition agreements have very limited utility under Chinese law. The better approach is to deal with the whole issue under the terms of a trade secrecy agreement.”
From http://www.pepperlaw.com/publications_update.aspx?ArticleKey=1714 : “…Indian courts have consistently refused to enforce post-termination non-compete clauses in employment contracts, viewing them as “restraint of trade” impermissible under Section 27 of the Indian Contract Act, 1872 (the Act), and as void and against public policy.”
Interesting!