Massachusetts Governor Announces Plan to Abolish Noncompetes • Hacker News Board

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#41

Post by dragonwriter » Thu, Apr 10, 2014, 5:40 PM UTC

GFK_of_xmaspast wrote: post #12

drawkbox wrote: post #3

Non-competes are anti-business, anti-innovation and feudal. I have never signed one. I can't tell you how many times I have been asked to sign one that locks up your skills, which you are bringing to the company that they might not have yet, solely for them for years even though the project might only be 3-6 months. I applaud this effort immensely in MA, there is no place for non-competes in the US. It is entirely an…

Non-competes are very much pro-business, in that they weaken the power of labor.

"pro-capital" isn't necessarily the same thing as "pro-business"; non-competes, in particular, reduce labor market mobility, which reduces overall market efficiency in the same way that barriers to capital market liquidity would.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#42

Post by danvoell » Thu, Apr 10, 2014, 5:40 PM UTC

For sales people I see a value in non-competes. I own a company which can run successfully with 100 clients. If I hire a sales person who builds good enough relationships with 50 of our existing clients such that he takes them to another company, he could cut our revenue in half. Why is that supposed to make me want to set up my business in Massachusetts? This announcement would seem to make businesses less competitive in my mind. I'm just going to look for competitors in Massachusetts who's sales people I can cherry pick.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#43

Post by CanSpice » Thu, Apr 10, 2014, 5:43 PM UTC

drpgq wrote: post #38

I wish Ontario would do this. The fact that California doesn't allow non-competes should be pretty compelling for any state or province that is trying to grow their tech sector.

Judging from this story (http://www.theglobeandmail.com/report-on-business/careers/ca...) it would appear that the Ontario courts are pretty firmly on the side of non-competes being unenforceable. "In short, most non-compete clauses are excessive, and thus will be upheld only in very limited circumstances."

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#44

Post by dragonwriter » Thu, Apr 10, 2014, 5:43 PM UTC

patrickmay wrote: post #5

Limited non-compete agreements have value to startups. It's not unreasonable to want to protect the company's intellectual property, business plans, product roadmap, marketing strategy, etc. from someone who comes in, works for six months, and leaves to start a competitor. Certainly large companies are abusing these agreements. However, so long as the non-compete is agreed at the time of hiring, is restricted to a ye…

> Yeah, many of us did exactly that back in 2007/2008. We nominated and worked hard to promote and to get elected a politician we believed -- based on our candidate's deeply-persuasive statements -- who would be "different". We did much more than vote. We built amazing software systems for our candidate, went door-to-door in places that almost got us shot, worked 80 hour weeks at the grass roots level, and in some cases estranged ourselves from our families. And of course we voted for him.

There are separate laws protecting IP directly, so you don't need a non-compete to do that any more than you do to protect company physical property. And specific restrictions on the use of proprietary information that isn't IP in the strict sense are often enforceable when non-competes (provision prohibiting someone from working in a particular field or capacity) are not.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#45

Post by rodgerd » Thu, Apr 10, 2014, 5:46 PM UTC

dsr_ wrote: post #2

I've been asked to sign a post-employment non-compete agreement several times. I never have, because I ask for a simple stipulation: for the length of time you don't want me to work in this field, you need to pay me the same salary. Everyone agrees that this is fair, and then never mentions the non-compete agreement again.

This is the legal position in New Zealand, not through an Act of Parliament, but as the result of various law court decisions. You cannot have a non-compete which prevents someone working for a living unless you pay compensation for that non-compete. Attempts to dodge the rules (claiming regular salary includes said compensation or a derisory amount) have been struck down.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#46

Post by chris_mahan » Thu, Apr 10, 2014, 5:57 PM UTC

danvoell wrote: post #42

For sales people I see a value in non-competes. I own a company which can run successfully with 100 clients. If I hire a sales person who builds good enough relationships with 50 of our existing clients such that he takes them to another company, he could cut our revenue in half. Why is that supposed to make me want to set up my business in Massachusetts? This announcement would seem to make businesses less competiti…

If those 50 clients would be better served getting a different product from a different vendor, then why would you want to stop that?

If your product is superior in value, the salesman won't be able to move the customers away from your products.

Make better products.

Anyway, you'll attract better salesmen.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#47

Post by JS1984 » Thu, Apr 10, 2014, 6:01 PM UTC

smackfu wrote: post #25

gtaylor wrote: post #10

Earlier quoted context omitted.

Some of the jobs I've had or looked at made employment contingent on a non-compete. In those cases, saying something like this would mean finding another job. Depending on your skills, your area of expertise, and your reputation, this may or may not be a big deal to you personally, but it's not an option for everyone. My last employer (when I was straight out of college) would have just shown me the door if I said so…

If wonder if companies with mandatory non-competes have lower salaries. They should.

In a good market, only more desperate candidates will go with non-compete positions. So lower salary argument makes sense

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#48

Post by nickff » Thu, Apr 10, 2014, 6:03 PM UTC

_delirium wrote: post #34

rz2k wrote: post #28

Earlier quoted context omitted.

And, if understood in that way, it is an instance where the term "pro-business" is a political ideology rather than an economic perspective. Historically the rationale for pro-business policies is that greater production creates more wealth for everyone in a society. As a result it could be argued that a labor union might hurt an economy if less output comes from the same input, while those labor unions' arguments wo…

Historically the rationale for pro-business policies is that greater production creates more wealth for everyone in a society. I don't think that's really true, in a realpolitik sense if you look into why different interest groups were advocating for "pro-business" policies at various points in various countries' histories. Historically the rationale for "pro-business" policies has most often been that they increase…

This is a 'bootleggers and baptists'[1] situation, and it is almost impossible to determine the true motives of the politicians.[1] We might be suspicious of the motives of the politicians, but we should also consider that they may be operating with a variety of rationales, all difficult to disentangle.

[1] http://en.wikipedia.org/wiki/Bootleggers_and_Baptists

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#49

Post by cookerware » Thu, Apr 10, 2014, 6:05 PM UTC

CanSpice wrote: post #43

drpgq wrote: post #38

I wish Ontario would do this. The fact that California doesn't allow non-competes should be pretty compelling for any state or province that is trying to grow their tech sector.

Judging from this story ( http://www.theglobeandmail.com/report-on-business/careers/ca... ) it would appear that the Ontario courts are pretty firmly on the side of non-competes being unenforceable. "In short, most non-compete clauses are excessive, and thus will be upheld only in very limited circumstances."

What about BC? I signed a non-compete clause a while back and it says I can't work for any competitor startup or start my own in that niche. Apparently the non-compete extends for a year after leaving. It mentions I can't offer consulting or work for the competition. It's been a few years now, but I wonder what other dirty tricks they may have up their sleeves regarding this.

I want to start my own company in this niche and I can't do it because of the fear that they will sue me if I ever make it on their radar.

BC government also is not in the habit of protecting tech workers and cares more about tax revenues. Maybe I should move to Ontario or leave Canada all together.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#50

Post by larrys » Thu, Apr 10, 2014, 6:06 PM UTC

danvoell wrote: post #42

For sales people I see a value in non-competes. I own a company which can run successfully with 100 clients. If I hire a sales person who builds good enough relationships with 50 of our existing clients such that he takes them to another company, he could cut our revenue in half. Why is that supposed to make me want to set up my business in Massachusetts? This announcement would seem to make businesses less competiti…

You are talking about the "book of business" problem.

I agree but I think there might be other legal (or see "know the customer yourself" below) ways to protect your clients.

So while you can't prevent someone from working for a competitor I believe there is a reasonable way to protect the customer list and/or specifically soliciting an existing customer. [1]

Nothing can prevent a client who knows the new business from approaching the salesman of course. But if the salesman is prevented from contacting them it is a bit of friction.

Separately, a way that you can protect against this is also to build some loyalty (as the business owner) with the client. Make contact yourself and let them know you value their business. Not fail safe but will definitely help. In other words multiple contacts, not just one contact.

[1] I've seen this even with hair salons for that matter. You will see ads which say "Joan is now at XYZ Salon" because Joan isn't allowed to go after her clients. But she can advertise that she has a new job. But not directly (by direct mail to a list of only her clients but she could spray direct mail though or advertise in the local paper because it's not targeted).