I've been talking awhile about the move afoot in Massachusetts to ban noncompete agreements. This week, Massachusetts Governor Deval Patrick announced an economic development package that included a
plan to ban noncompetes. You'd think big business would be screaming about this, but there are some business interests that actually support the ban, especially in the tech sector.
One big supporter is the New England Venture Capital Association, a group that puts investors with businesses.
Here's what they say about noncompete agreements:
Today
the Governor announced an economic development bill that includes a key
provision that will drive innovation and job growth in
Massachusetts—the elimination of non-compete agreements.
Companies
use non-competes to hold employees captive and stifle competition all
in the name of protecting intellectual property. The truth is that
intellectual property is well protected by the use of non-disclosure and
non-solicitation agreements.
Let’s
level the playing field with California and other states who understand
that non-competes impede growth. Let’s create an environment in
Massachusetts that allows the creation of 100 new EMCs, 100 new Boston
Scientific’s. Abolishing non-competes will free talented people to start
and join new companies that will create thousands of jobs and grow
state revenues.
- See more at: http://salsa4.salsalabs.com/o/51078/p/dia/action3/common/public/?action_KEY=10711#sthash.CDq3Gkbr.dpuf
End Non-Competes Today
Today the Governor announced an economic development bill that includes a key provision that will drive innovation and job growth in Massachusetts—the elimination of non-compete agreements.
Companies use non-competes to hold employees captive and stifle competition all in the name of protecting intellectual property. The truth is that intellectual property is well protected by the use of non-disclosure and non-solicitation agreements.
Let’s level the playing field with California and other states who understand that non-competes impede growth. Let’s create an environment in Massachusetts that allows the creation of 100 new EMCs, 100 new Boston Scientific’s. Abolishing non-competes will free talented people to start and join new companies that will create thousands of jobs and grow state revenues.
Venture capitalist Bijan Sabet weighed in on the issue,
debunking many of the pro-noncompete arguments:
1. The opposition likes the status quo because it’s a often a tool for wage suppression
2. These agreements encourage new grads to leave the state.
Bright minds come and get educated at MIT. They specialize in things
like speech recognitoin or robotics. There is a high probability their
first job out of school won’t be their last. Knowing this, do they take a
job locally where they will be locked up in a broad non compete that
follows them or do they take a job in the bay area and have freedom if
things don’t work out with their first employer.
3. Non competes
stifle innovation because the companies can’t hire the best talent.
Silicon Valley companies hire the best people without limitation. It’s a
big problem if you can’t hire the best and brightest.
4. Non
competes are not the same thing as non solicitation and confidentiality
agreements. I’m amazed at how often the opposition will try to bundle
these altogether. That is nonsense. I’m an advocate for confidentiality
and non solicitation agreements. They are enforced in California and yet
allow for innovation and mobility.
5. The opposition will shout
that this will hurt their business but they have been unable to suggest
why silicon valley tech companies can thrive without non competes. Why
do east coast VCs fund west coast startups if non competes are so
harmful. The answer: non competes aren’t harmful….in fact that leads to a
new point — banning non competes hurt company culture.
6. Non
compete agreements hurt company culture. Imagine running a company where
your employees are only at the company because they signed a non
compete agreement. Every day those employees wish they were someplace
else. And their employer doesn’t have to inspire them because they know
the burden to leave is too high. Also managers will treat employees
better if they know they can leave.
7. Non competes are often vague
and broad. If challenged maybe a judge will throw it out but VCs aren’t
interested in dealing with litigation. We want to support new ideas not
deal with courts. Boston VCs have tremendous capital under management.
Much more than NYC VCs. Yet we invest mostly out of this state. We see
founders all the time that want funding but we aren’t prepared to deal
with legal risk so we pass on those opportunities.
8. Chilling effect. It is well known that companies like EMC will
go after former employees for violating their non compete agreement. It
creates a chilling effect where people are less likely to challenge it
even if they want to pursue a market that EMC is weaker in or doesn’t
participate in.
I can tell you from personal experience representing employees who have noncompetes that Mr. Sabet is right. They can be abused to suppress wages and abuse employees. Most people can't afford to pay for the legal fight involved in challenging a broad noncompete.
Now that business interests are fighting against noncompetes in Massachusetts, is anyone listening in Florida? If we want to be competitive in bringing new business to Florida, especially in the tech sector, we'll have to modify Florida's
truly obnoxious noncompete laws.
End Non-Competes Today
Today
the Governor announced an economic development bill that includes a key
provision that will drive innovation and job growth in
Massachusetts—the elimination of non-compete agreements.
Companies
use non-competes to hold employees captive and stifle competition all
in the name of protecting intellectual property. The truth is that
intellectual property is well protected by the use of non-disclosure and
non-solicitation agreements.
Let’s
level the playing field with California and other states who understand
that non-competes impede growth. Let’s create an environment in
Massachusetts that allows the creation of 100 new EMCs, 100 new Boston
Scientific’s. Abolishing non-competes will free talented people to start
and join new companies that will create thousands of jobs and grow
state revenues.
.
Today
the Governor announced an economic development bill that includes a key
provision that will drive innovation and job growth in
Massachusetts—the elimination of non-compete agreements - See more at:
http://salsa4.salsalabs.com/o/51078/p/dia/action3/common/public/?action_KEY=10711#sthash.CDq3Gkbr.dpuf
- See more at: http://salsa4.salsalabs.com/o/51078/p/dia/action3/common/public/?action_KEY=10711#sthash.CDq3Gkbr.dpuf
Today
the Governor announced an economic development bill that includes a key
provision that will drive innovation and job growth in
Massachusetts—the elimination of non-compete agreements - See more at:
http://salsa4.salsalabs.com/o/51078/p/dia/action3/common/public/?action_KEY=10711#sthash.CDq3Gkbr.dpuf
End Non-Competes Today
Today
the Governor announced an economic development bill that includes a key
provision that will drive innovation and job growth in
Massachusetts—the elimination of non-compete agreements.
Companies
use non-competes to hold employees captive and stifle competition all
in the name of protecting intellectual property. The truth is that
intellectual property is well protected by the use of non-disclosure and
non-solicitation agreements.
Let’s
level the playing field with California and other states who understand
that non-competes impede growth. Let’s create an environment in
Massachusetts that allows the creation of 100 new EMCs, 100 new Boston
Scientific’s. Abolishing non-competes will free talented people to start
and join new companies that will create thousands of jobs and grow
state revenues.
- See more at: http://salsa4.salsalabs.com/o/51078/p/dia/action3/common/public/?action_KEY=10711#sthash.CDq3Gkbr.dpuf
End Non-Competes Today
Today
the Governor announced an economic development bill that includes a key
provision that will drive innovation and job growth in
Massachusetts—the elimination of non-compete agreements.
Companies
use non-competes to hold employees captive and stifle competition all
in the name of protecting intellectual property. The truth is that
intellectual property is well protected by the use of non-disclosure and
non-solicitation agreements.
Let’s
level the playing field with California and other states who understand
that non-competes impede growth. Let’s create an environment in
Massachusetts that allows the creation of 100 new EMCs, 100 new Boston
Scientific’s. Abolishing non-competes will free talented people to start
and join new companies that will create thousands of jobs and grow
state revenues.
- See more at: http://salsa4.salsalabs.com/o/51078/p/dia/action3/common/public/?action_KEY=10711#sthash.CDq3Gkbr.dpuf
Today
the Governor announced an economic development bill that includes a key
provision that will drive innovation and job growth in
Massachusetts—the elimination of non-compete agreements.
Companies
use non-competes to hold employees captive and stifle competition all
in the name of protecting intellectual property. The truth is that
intellectual property is well protected by the use of non-disclosure and
non-solicitation agreements.
Let’s
level the playing field with California and other states who understand
that non-competes impede growth. Let’s create an environment in
Massachusetts that allows the creation of 100 new EMCs, 100 new Boston
Scientific’s. Abolishing non-competes will free talented people to start
and join new companies that will create thousands of jobs and grow
state revenues.
- See more at: http://salsa4.salsalabs.com/o/51078/p/dia/action3/common/public/?action_KEY=10711#sthash.CDq3Gkbr.dpuf
Today
the Governor announced an economic development bill that includes a key
provision that will drive innovation and job growth in
Massachusetts—the elimination of non-compete agreements.
Companies
use non-competes to hold employees captive and stifle competition all
in the name of protecting intellectual property. The truth is that
intellectual property is well protected by the use of non-disclosure and
non-solicitation agreements.
Let’s
level the playing field with California and other states who understand
that non-competes impede growth. Let’s create an environment in
Massachusetts that allows the creation of 100 new EMCs, 100 new Boston
Scientific’s. Abolishing non-competes will free talented people to start
and join new companies that will create thousands of jobs and grow
state revenues.
- See more at: http://salsa4.salsalabs.com/o/51078/p/dia/action3/common/public/?action_KEY=10711#sthash.CDq3Gkbr.dpuf
Today
the Governor announced an economic development bill that includes a key
provision that will drive innovation and job growth in
Massachusetts—the elimination of non-compete agreements.
Companies
use non-competes to hold employees captive and stifle competition all
in the name of protecting intellectual property. The truth is that
intellectual property is well protected by the use of non-disclosure and
non-solicitation agreements.
Let’s
level the playing field with California and other states who understand
that non-competes impede growth. Let’s create an environment in
Massachusetts that allows the creation of 100 new EMCs, 100 new Boston
Scientific’s. Abolishing non-competes will free talented people to start
and join new companies that will create thousands of jobs and grow
state revenues.
- See more at: http://salsa4.salsalabs.com/o/51078/p/dia/action3/common/public/?action_KEY=10711#sthash.CDq3Gkbr.dpuf
