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Massachusetts Bill to Ban Non-Competes backed by Spark Capital

xconomy.com

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Re: Massachusetts Bill to Ban Non-Competes backed by Spark Capital

#31

Post by sscheper »

tptacek wrote: post #24
sscheper wrote: post #12

Excellent movement on Spark's part. I've personally been handed a non-compete by a venture capital fund that would make a producer blush. It's preposterous what some firms try to con entrepreneurs into.

I'm really not sure why I'm expected to muster sympathy for entrepreneurs facing noncompetes from VC's. Isn't this an eminently reasonable use for noncompetes? You're epsilon from corporate-to-corporate contracts in this scenario.

The vc will issue non-competes relating to its portfolio companies and future investments. That, to me, seemed unreasonable

Re: Massachusetts Bill to Ban Non-Competes backed by Spark Capital

#32

Post by jfarmer »

I read this as [Massachusetts Bill to Ban] [Non-Competes backed by Spark Capital], rather than [Massachusetts Bill to Ban Non-Competes] [backed by Spark Capital], so it's good to see that Spark is backing the ban.

In general I think the state should take a utilitarian perspective in matters like this. If non-competes hurt the economy more than they help it would be self-defeating for the state to enforce them.

I'll leave the rest for politicians and pundits.

Re: Massachusetts Bill to Ban Non-Competes backed by Spark Capital

#33

Post by tptacek »

sscheper wrote: post #31
tptacek wrote: post #24

Earlier quoted context omitted.

I'm really not sure why I'm expected to muster sympathy for entrepreneurs facing noncompetes from VC's. Isn't this an eminently reasonable use for noncompetes? You're epsilon from corporate-to-corporate contracts in this scenario.

The vc will issue non-competes relating to its portfolio companies and future investments. That, to me, seemed unreasonable

But the VC market isn't the labor market. I don't see why the response to that isn't simply not to take their money.

Re: Massachusetts Bill to Ban Non-Competes backed by Spark Capital

#34

Post by biohacker42 »

tptacek wrote: post #21
biohacker42 wrote: post #19

Earlier quoted context omitted.

Noncompetes are a trade. Companies provide employees with access to resources, client lists, and trade secrets. They want to ensure that rolodexes aren't shopped and product plans aren't bootlegged. Isn't that an NDA? I see non-competes as nothing but attempts to reduce competition. Except that is exactly how markets are NOT supposed to work. You're supposed to out-compete , not simply reduce competition.

No. A sales account manager at AcmeTron can dump the entire CRM database, walk it over to WidgetCorp, and run all those same accounts for them without ever once violating an NDA. Frankly, and I hope respectfully, if you can't see the distinctions here, I'm not sure why you'd expect anyone to take your opinions about noncompetes seriously. You might also consider wording your ideas better: "noncompetes are nothing but…

I'm not a salesman so I wouldn't know but it seems to me A sales account manager at AcmeTron can dump the entire CRM database, walk it over to WidgetCorp, and run all those same accounts for them without ever once violating an NDA. is the very definition of why you need NDAs.

But again maybe I'm looking at this from an engineer's perspective and it's different for sales.

In either case, I don't think we'll change each others minds here on the Internet.

Re: Massachusetts Bill to Ban Non-Competes backed by Spark Capital

#35

Post by dsil »

tjic wrote: post #5

I dislike the government asserting that I am not a fully competent adult, capable of making my own decisions about what agreements I enter into and which I do not. If I'm not competent to read a non-compete and agree, or not agree, to it, then why do they think that I'm competent to drive a car, or vote, or sign a lease?

Driving a car, voting, and signing a lease are all much much simpler to do than understanding a non-compete agreement. And actually I think the line of "most" people falls somewhere in the middle.

Re: Massachusetts Bill to Ban Non-Competes backed by Spark Capital

#36

Post by tome »

frig wrote: post #29
tptacek wrote: post #13

Earlier quoted context omitted.

What does it matter what you can sign, if the contract doesn't have the support of courts to make it binding?

I know what you're getting at. I was commenting specifically because I hate sloppy language and sloppy thought: there's just no meaningful sense in which "a particular kind of contract becoming non-enforceable" simplifies into "not being able to sign a particular kind of contract"; the latter implies some kind of intrusive intervention -- a noncompete gestapo slapping pen-from-hand should you try to sign such a contr…

Exactly. The OP was suggesting that Mass. is taking an action to prevent him signing contracts. On the contrary, it is saying it will stay out of the way an refuse to take action to enforce a certain sort of contract.

Re: Massachusetts Bill to Ban Non-Competes backed by Spark Capital

#37

Post by tome »

tptacek wrote: post #28
redrobot5050 wrote: post #26

Earlier quoted context omitted.

Um, slavery is one of those things that've been outlawed -- meaning the courts will not recognize it as an institution. It makes his argument look strong. Outside of the state of nevada, he could've also said prostitution.

Slavery wasn't a matter of contract law.

Indeed, and once non-compete agreements are no longer enforced in Mass., non-compete agreements will no longer be a matter of contract law.

Re: Massachusetts Bill to Ban Non-Competes backed by Spark Capital

#38

Post by sfg »

jfarmer wrote: post #32

I read this as [Massachusetts Bill to Ban] [Non-Competes backed by Spark Capital], rather than [Massachusetts Bill to Ban Non-Competes] [backed by Spark Capital], so it's good to see that Spark is backing the ban. In general I think the state should take a utilitarian perspective in matters like this. If non-competes hurt the economy more than they help it would be self-defeating for the state to enforce them. I'll l…

How do we measure the utility?

Re: Massachusetts Bill to Ban Non-Competes backed by Spark Capital

#39

Post by electromagnetic »

dmillar wrote: post #10

I agree. If you feel your employee is a value to you and potentially a competitor, you ought to compensate them accordingly. Personally, I would never sign a non-compete unless there were not only adequate considerations for compensation, but also equity.

I agree with a ban on putting it into an employment contract, however I don't agree with them being banned completely.

I don't think my getting a job should hinge on if I agree not to use my knowledge for my own best interest. If a company wants to offer me something that (from my perception) is of better interest to me than competing with them, then I'd possibly sign it.

If it's that important to a company that I don't compete with them, they should be willing to pay me enough that I have an interest not to compete.

Re: Massachusetts Bill to Ban Non-Competes backed by Spark Capital

#40

Post by tptacek »

biohacker42 wrote: post #34
tptacek wrote: post #21

Earlier quoted context omitted.

No. A sales account manager at AcmeTron can dump the entire CRM database, walk it over to WidgetCorp, and run all those same accounts for them without ever once violating an NDA. Frankly, and I hope respectfully, if you can't see the distinctions here, I'm not sure why you'd expect anyone to take your opinions about noncompetes seriously. You might also consider wording your ideas better: "noncompetes are nothing but…

I'm not a salesman so I wouldn't know but it seems to me A sales account manager at AcmeTron can dump the entire CRM database, walk it over to WidgetCorp, and run all those same accounts for them without ever once violating an NDA. is the very definition of why you need NDAs. But again maybe I'm looking at this from an engineer's perspective and it's different for sales. In either case, I don't think we'll change eac…

In a consulting agreement, you may find "Non-use" terms along with "Non-disclosure" terms in the IP language; technically, this would prevent a consultant from stealing the sales rolodex and then using it to contact customers.

Otherwise, you violate an NDA by disclosing to someone not bound under the same NDA actual confidential information. Nothing prevents you from using confidential information to compete "unfairly" with your employer.

You can add whatever terms you'd like to whatever you call a "confidentiality" or IP agreement, but now you're on a slippery slope that leads to de facto noncompetes.

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