re: Non compete legislation – Will Brownsberger

In my case, I was/am a sales rep, not a high level mgr. I was recently terminated “without cause” by my employer and even though I was offered a great position with another company I cannot accept the postion as my previous employer has told me they would seek an injunction against me and file suit for ‘damages’ should I accept the postion with the new employer. So I’m stuck for the one year duration of my no compete, which I signed 14 years ago because I needed the job at the time. Why should I be forced to sit and not work in my chosen profession, which is something that I loved doing, because they say I can’t work in my field? It’s a totally unfair situation. Even my former customers have stated that they wold prefer to go with me, should I accept the new position saying that they ‘can buy the same products from many companies but chose to buy from (XYZ) because of (me), not the company”.

Rep. Brownsberger,

I would like to commend you for bringing this issue to the attention of the Legislature and for your efforts to educate the public about it. It was great to have had the opportunity to hear you and the other panelists speak at last week’s Symposium on Bills Affecting Employee Non-Compete Agreements at the Boston Bar Association and to be able to speak with you directly afterward.

Having worked in sales in the IT industry for many years, including for companies headquartered in Massachusetts and in California, although always as a resident of Mass., I am very well aware of this issue. I have been required to sign non-compete agreements as a condition of my employment with Mass. companies. I have never been asked to sign such an agreement by a Calif. company, even though they could presumably have legally required me to do so since they employed me in Mass. The situation that “wgh” now finds himself in is disgraceful and should not be tolerated.

Here are my thoughts regarding this issue and your legislation:

There are many problems with these so-called “non-compete” agreements, some of which the supporters of your original bill, H. 1794, have done a very nice job of pointing out, but I would like to focus on one very fundamental one, one that I believe gets to the very heart of the problem.

All but a very few employees in the Commonwealth of Massachusetts and throughout the U.S. are employed under a legal doctrine called “employment at-will.” Employment at-will has been adopted by Massachusetts courts as a rule of contract construction whereby if “an employment contract, be it express or implied, contains no definite period of employment, it establishes employment at-will [and] employment at-will is terminable by either the employee or the employer without notice, for almost any reason or for no reason at all.” If you look into the history of the at-will “rule” you will find that it was concocted by U.S. courts beginning in the late 19th century (during a period of time that came to be referred to as the Gilded Age). Over the years, some states, including Massachusetts, have carved out certain limited exceptions to the at-will rule, e.g., discharge in violation of public policy and breach of the covenant of good faith and fair dealing, but the rule is, otherwise, still followed to this day.

The problem is that the at-will doctrine rests on the idea that the employee is required to perform first and the employer is then obligated to compensate that performance as agreed upon prior to the work being undertaken. Once an at-will employment “contract” is thus fulfilled the “contract” is over, period. As much as we might like to not think about it, the at-will rule renders all employees who are subject to it, regardless of their level of expertise or compensation, as day laborers. The rule is also predicated on the absurd belief that the parties have exactly reciprocal rights, that is, the employee can quit at any time and the employer can fire at any time. The notion that there could be engrafted onto such a relationship something such as an employee non-compete agreement is completely ridiculous. Just imagine if an employee attempted to get an employer to agree to such a term.

Putting aside debate over whether or not continued use of the at-will rule itself should be permitted, if we are going to permit our economy to be structured around such a rule then we must recognize it for what it really is and put a stop to the ridiculous notion that an employer can somehow restrict an at-will employee’s right to earn a living in any way he or she desires after the employment relationship has ended.

With regard to the various proposed pieces of legislation, I believe that your original bill is on the right track, but does not go far enough. I would support H. 1794, and would ask the legislators who represent me to do so, provided the following changes were made to it:

Delete: “Whoever violates the provisions of this section shall be liable for reasonable attorneys fees and costs associated with litigation of an affected employee or individual.”

Delete: “This section shall apply to all contracts and agreements generated after the effective date of this act.”

(With respect to any concern over the constitutionality of outlawing existing non-competes I direct your attention to 163 Mass. 589.)

Add: Section 3. Section 27C of Chapter 149 of the General Laws of Massachusetts is hereby amended by adding prior to all occurrences of the words “section 26” the words: “section 19,”.

Add: Section 4. Section 150 of Chapter 149 of the General Laws of Massachusetts is hereby amended by adding prior to the words “section 33E” the words: “section 19,”.

I realize that this is not the direction you are looking to move in with your legislation, but the compromise bill you are now contemplating is legislation that only a lawyer could love, and it, or anything similar to it, would be a disaster once the courts get a hold of any cases under it.

I would be happy to expand upon my thoughts if you think it would be helpful. Good luck pursuing this issue with your colleagues in the Legislature.

Best regards,

Bill Okerman

5 replies on “re: Non compete legislation”

Will Brownsberger says:

July 15, 2009 at 6:55 AM

Thanks for speaking out.

Yours is the kind of case that motivates our legislation.

Unfortunately, for constitutional and practical reasons, our bill will give protection to employees entering contracts in the future.

But stay in touch, hopefully, your willingness to speak out can help others.

Will B.
1. Bill Okerman says:
  
  July 28, 2009 at 2:35 PM
  
  Rep. Brownsberger,
  
  I would like to commend you for bringing this issue to the attention of the Legislature and for your efforts to educate the public about it. It was great to have had the opportunity to hear you and the other panelists speak at last week’s Symposium on Bills Affecting Employee Non-Compete Agreements at the Boston Bar Association and to be able to speak with you directly afterward.
  
  Having worked in sales in the IT industry for many years, including for companies headquartered in Massachusetts and in California, although always as a resident of Mass., I am very well aware of this issue. I have been required to sign non-compete agreements as a condition of my employment with Mass. companies. I have never been asked to sign such an agreement by a Calif. company, even though they could presumably have legally required me to do so since they employed me in Mass. The situation that “wgh” now finds himself in is disgraceful and should not be tolerated.
  
  Here are my thoughts regarding this issue and your legislation:
  
  There are many problems with these so-called “non-compete” agreements, some of which the supporters of your original bill, H. 1794, have done a very nice job of pointing out, but I would like to focus on one very fundamental one, one that I believe gets to the very heart of the problem.
  
  All but a very few employees in the Commonwealth of Massachusetts and throughout the U.S. are employed under a legal doctrine called “employment at-will.” Employment at-will has been adopted by Massachusetts courts as a rule of contract construction whereby if “an employment contract, be it express or implied, contains no definite period of employment, it establishes employment at-will [and] employment at-will is terminable by either the employee or the employer without notice, for almost any reason or for no reason at all.” If you look into the history of the at-will “rule” you will find that it was concocted by U.S. courts beginning in the late 19th century (during a period of time that came to be referred to as the Gilded Age). Over the years, some states, including Massachusetts, have carved out certain limited exceptions to the at-will rule, e.g., discharge in violation of public policy and breach of the covenant of good faith and fair dealing, but the rule is, otherwise, still followed to this day.
  
  The problem is that the at-will doctrine rests on the idea that the employee is required to perform first and the employer is then obligated to compensate that performance as agreed upon prior to the work being undertaken. Once an at-will employment “contract” is thus fulfilled the “contract” is over, period. As much as we might like to not think about it, the at-will rule renders all employees who are subject to it, regardless of their level of expertise or compensation, as day laborers. The rule is also predicated on the absurd belief that the parties have exactly reciprocal rights, that is, the employee can quit at any time and the employer can fire at any time. The notion that there could be engrafted onto such a relationship something such as an employee non-compete agreement is completely ridiculous. Just imagine if an employee attempted to get an employer to agree to such a term.
  
  Putting aside debate over whether or not continued use of the at-will rule itself should be permitted, if we are going to permit our economy to be structured around such a rule then we must recognize it for what it really is and put a stop to the ridiculous notion that an employer can somehow restrict an at-will employee’s right to earn a living in any way he or she desires after the employment relationship has ended.
  
  With regard to the various proposed pieces of legislation, I believe that your original bill is on the right track, but does not go far enough. I would support H. 1794, and would ask the legislators who represent me to do so, provided the following changes were made to it:
  
  Delete: “Whoever violates the provisions of this section shall be liable for reasonable attorneys fees and costs associated with litigation of an affected employee or individual.”
  
  Delete: “This section shall apply to all contracts and agreements generated after the effective date of this act.”
  
  (With respect to any concern over the constitutionality of outlawing existing non-competes I direct your attention to 163 Mass. 589.)
  
  Add: Section 3. Section 27C of Chapter 149 of the General Laws of Massachusetts is hereby amended by adding prior to all occurrences of the words “section 26” the words: “section 19,”.
  
  Add: Section 4. Section 150 of Chapter 149 of the General Laws of Massachusetts is hereby amended by adding prior to the words “section 33E” the words: “section 19,”.
  
  I realize that this is not the direction you are looking to move in with your legislation, but the compromise bill you are now contemplating is legislation that only a lawyer could love, and it, or anything similar to it, would be a disaster once the courts get a hold of any cases under it.
  
  I would be happy to expand upon my thoughts if you think it would be helpful. Good luck pursuing this issue with your colleagues in the Legislature.
  
  Best regards,
  
  Bill Okerman
amrithkumar says:

July 20, 2009 at 6:51 AM

Rep. Brownsberger, would the proposed bill help wgh, if he signed on after it went into effect? My understanding is that it will not as his non-compete period is for one year. According to the current compromise bill, he could be required to “sit out” for one year. In contrast, what I have suggested is that his employer should be required to pay him 100% of wage for the duration that he is required to “sit out”.

Thanks,

-amrith
1. amrithkumar says:
  
  July 20, 2009 at 6:51 AM
  
  For the benefit of wgh and other readers, you can read my proposal at http://hypecycles.wordpress.com
  
  Thanks,
  
  -amrith
  1. Will Brownsberger says:
    
    July 21, 2009 at 6:35 AM
    
    Thanks, Amrith, your comments on this issue here and at your site are all terribly helpful.
    
    Our belief is that employers will draft shorter and more narrowly drawn non-competes after our legislation is effective, so that folks like wgh would not be so adversely affected.
    
    Also, for most sales people making under $100,000 the bill would completely ban non-competes.
    
    I am not sure I think that requiring 100% compensation for sitting on the beach is reasonable. I prefer an approach that leads to more shorter and narrower agreements

Comments are closed.