Massachusetts Governor Announces Plan to Abolish Noncompetes • Hacker News Board

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#71

Post by rimantas » Thu, Apr 10, 2014, 6:36 PM UTC

JS1984 wrote: post #20

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…

Agreed 100%. It may not be fully enforceable but it certainly helps startups to protect their IPs to some extent.

I'd argue, that any startup with such attitude has now IP worth protecting. Same goes for NDA.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#72

Post by yardie » Thu, Apr 10, 2014, 6:37 PM UTC

larrys wrote: post #50

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 fr…

> I've seen this even with hair salons for that matter.

This would be really odd for salons. Most beauticians are contractors so technically they are her clients. She's paying the salon to rent their facilities. So salons get the best of both worlds. They skirt labor laws and tax laws.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#73

Post by [deleted] » Thu, Apr 10, 2014, 6:40 PM UTC

bane wrote: post #4

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.

I use something similar "I'd be happy to sign a perpetual non-compete contract so long as it includes a clause that you'll continue to pay me at current salary (with a yearly cost of living increase pegged at inflation) as long as the contract is in effect. If you wish to cancel the non-compete after it takes effect, you agree to a six month notification and run-down period". I'd need the six month period so I could…

[deleted]

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#74

Post by nickff » Thu, Apr 10, 2014, 6:40 PM UTC

smackfu wrote: post #54

khuey wrote: post #40

Earlier quoted context omitted.

You would expect them to have higher salaries, to compensate employees for the risk of being prohibited from working for N months after their employment terminates.

Higher initial salaries perhaps, but lower annual increases, since employees don't have as many jobs to switch to so there is less incentive for raises.

It appears that you are making the unstated assumptions that these employees have experience in exclusively non-transferable skills and that they had no knowledge of future changes in salary at the time they accepted the agreement. I find both of these claims to be dubious at best; if you have supporting evidence, please enlighten me.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#75

Post by stephencanon » Thu, Apr 10, 2014, 6:45 PM UTC

JS1984 wrote: post #47

smackfu wrote: post #25

Earlier quoted context omitted.

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

No; in a good market the employer who wants a non-compete would need to pay me up front for the time period that I wouldn’t be able to work after leaving her firm, plus a premium for the expected difference between my salary at that point and my salary at hiring, which would make the wage for positions with a non-compete significantly higher than those without.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#76

Post by jt2190 » Thu, Apr 10, 2014, 6:49 PM UTC

tl;dr They're planning to replace overly-broad, vague non-compete agreements with the more focused Uniform Trade Secret Act. [1]

This should get rid of the ridiculous abuses of non-competes that we've seen here in Massachusetts. For example:

    Just before July 4th [2011], Angela, a 26 year-old Boston
    University alumna, was laid off from her job as a 
    software trainer. She had only been at the company for 
    two weeks... Angela had signed a non-compete contract 
    with an old employer — a job she'd left voluntarily [in]
    October [2010] — and the employer... was now threatening 
    to sue over it...She'd signed the non-compete in 2007 
    without giving its implications much thought. But it 
    prevented her from working for any other company that 
    developed software for the staffing or recruiting 
    industry for a year after she left... [2]

[1] http://en.wikipedia.org/wiki/Uniform_Trade_Secrets_Act [2] http://www.boston.com/business/technology/innoeco/2011/09/no...

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#77

Post by greyskull » Thu, Apr 10, 2014, 6:51 PM UTC

bane wrote: post #4

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.

I use something similar "I'd be happy to sign a perpetual non-compete contract so long as it includes a clause that you'll continue to pay me at current salary (with a yearly cost of living increase pegged at inflation) as long as the contract is in effect. If you wish to cancel the non-compete after it takes effect, you agree to a six month notification and run-down period". I'd need the six month period so I could…

I like that. I'm making note of it.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#78

Post by awda » Thu, Apr 10, 2014, 7:01 PM UTC

I work for EMC. Do we know if this will retroactively apply to existing contracts?

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#79

Post by chris_mahan » Thu, Apr 10, 2014, 7:05 PM UTC

larrys wrote: post #56

chris_mahan wrote: post #46

Earlier quoted context omitted.

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.

"If those 50 clients would be better served getting a different product from a different vendor, then why would you want to stop that?" Because you need to earn a living for one thing. And you won't keep your job for long as another reason (see strategic cases below because there are exceptions of course). Anyway along those lines would you suggest that a salesman for jet engines for Boeing not take an order and simp…

"Because you need to earn a living for one thing. "

Then make a better product, a more valuable product.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#80

Post by deveac » Thu, Apr 10, 2014, 7:06 PM UTC

ghaff wrote: post #21

iamthepieman wrote: post #11

Just because they are non-enforceable doesn't mean they have no effect. The COO of one of past employers was offered a job at a competitor shortly after he was fired. When the new company heard of his non-compete clause and the intent of the old company to enforce it, they withdrew their offer.

When I worked for a small research firm, we basically wouldn't have employment discussions with anyone who had a non-compete even if it seemed unlikely their current employer would go to the mat over it. Just the existence of a non-compete would have meant getting lawyers involved and it was just too much hassle and risk. (It's also the case that one of our large competitor firms, at least at the time, put non-compet…

>When I worked for a small research firm, we basically wouldn't have employment discussions with anyone who had a non-compete even if it seemed unlikely their current employer would go to the mat over it. Just the existence of a non-compete would have meant getting lawyers involved and it was just too much hassle and risk.

Had a similar experience at my company. We worked as a subcontractor whose parent company lost a contract at renewal time to a rival. The rival did not sub out and instead approached our employees on site and hired one directly. The owners got in touch and told the new firm that we had a non-compete and their response was basically "Ok, that's fine. Let us know if you intend to enforce it. If not, we're hiring him. If so, we won't, but we're not subbing the work out to you. It really doesn't matter to us what you do, just let us know. If we don't here back from you by this time tomorrow we're not hiring him."

In the end I'm happy to say that management did the right thing and just let him go unmolested, but the hiring firm explicitly stated that his job wasn't worth the expense and hassle to them, and just threw the ball back at us.