IANAL and I'm not familiar with the act, but I can totally see the ability to sure under the Uniform Trade Secret Act being abused by companies in Massachusetts if this passes. Hopefully that act includes provisions for protecting employees from frivolous fishing lawsuits against former employees.
Massachusetts Governor Announces Plan to Abolish Noncompetes
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Re: Massachusetts Governor Announces Plan to Abolish Noncompetes
#102I'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.
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…
> In those cases, saying something like this would mean
> finding another job.
Re: Massachusetts Governor Announces Plan to Abolish Noncompetes
#103Earlier 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?" 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.
Perhaps you should learn something about sales instead of being so incredibly obtuse.
When an employer sends a salesman out to sell his product, he is sending him out on the company dime to wine and dine customers and get them to sign that contract for services rendered or product delivered. This costs the employer a great deal of money. The salesperson is worth nothing except for the relationships he can create between the employer and the client. These business relationships are created on behalf of the owner, not the salesperson.
So when a salesperson leaves a company and then decides to use the information he gathered during his tenure there to create new business elsewhere, he is essentially stealing what he was hired to create in the first place. I don't know of many companies that allow their employees to walk off with proprietary information, and information related to core business functions is certainly proprietary.
"Create a better product" doesn't fly. Anywhere. Not even in California. They simply call the list of customers a "trade secret" and sue your ass when you decide to start dialing them up at your fancy new employer.
Re: Massachusetts Governor Announces Plan to Abolish Noncompetes
#104Re: Massachusetts Governor Announces Plan to Abolish Noncompetes
#105Earlier quoted context omitted.
"Because you need to earn a living for one thing. " Then make a better product, a more valuable product.
Perhaps you should learn something about sales instead of being so incredibly obtuse. When an employer sends a salesman out to sell his product, he is sending him out on the company dime to wine and dine customers and get them to sign that contract for services rendered or product delivered. This costs the employer a great deal of money. The salesperson is worth nothing except for the relationships he can create betw…
But the real reality is that it's the salesperson the client is forming a relationship with, and that it's the salesman they trust to get stuff done.
Also, companies often like to hire experienced salesmen _because_ of their rolodex.
(Do they still use rolodexes?)
Re: Massachusetts Governor Announces Plan to Abolish Noncompetes
#106Earlier 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
You're making the error of deducing market conditions from price (or price from market conditions).
Market price is determined (in a well-functioning market) by the intersection of supply and demand. So the salary could go other way: higher, if a non-compete makes it harder for the employer to find employees willing to sign the clause, lower, if result is fewer alternatives and/or more desperate employees interested in the position.
I'd actually argue the second: that noncompetes raise employees' switching costs, and reduce their alternatives, so that a state in which noncompetes are valid and widely applied would tend to have depressed labor rates.
Re: Massachusetts Governor Announces Plan to Abolish Noncompetes
#107What I don't get is why companies in states that allow non-competes just seem to do them by default. Someone on their legal team or board pushes for them, and then just just become defacto and no one can seem to justify them.
I may have had a conversation with a company recently where a friend was trying to get hired for a temporary 3 week position, and the company wanted them to sign a non-compete in MA that would exclude them from working in the industry for a year. The same company has presence in California. I asked the company if they have problems with people taking their experience and running off to another company and exposing their secrets- the company said they had never had such a problem in California. I asked them why they thought they'd have a problem in Massachusetts then, and why they needed/wanted a non-compete for a problem that didn't seem to actually have any material risk (they've had hundreds of employees now, if an issue were to pop up, it would have popped up by now). They didn't have a good answer, aside from the fact that HR/the board wanted it that way.
Re: Massachusetts Governor Announces Plan to Abolish Noncompetes
#108Perhaps of interest is that non-competes are unenforceable against lawyers. There are many reasons but the prevailing reasons are that a non-competes against lawyers interrupt a client's right to hire counsel of their choice and otherwise significantly limit access to the Courts, both are constitutionally protected rights. Enforcement of non-competes in any jurisdiction is a complex analysis, where the scope, term an…
Non-competes are enforceable against lawyers in most states, including California. Indeed, in some states, non-competes are even mandatory in certain situations, such as the sale of a law practice, and violation of the non-compete is treated as an ethical violation that could result in bar sanctions. However, non-competes for lawyers are more limited in scope--they only apply to partners, and only to specific areas o…
American Bar Association Model of Professional Conduct Rule 5.6:
A lawyer shall not participate in offering or making:
(a) a partnership, shareholders, operating, employment, or other similar type of agreement that restricts the right of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement; or
(b) an agreement in which a restriction on the lawyer's right to practice is part of the settlement of a client controversy.
49 of the 50 states have adopted their own version of the ABA rule prohibiting non-competes in the practice of law. In fact in Florida if an associate leaves a firm, for every file the associate worked on, said associate must notice each client of their right to continue representation with the firm or the associate, of course the associate can not be forced to accept any client(s). Your examples of non-solicitation is generally true, but there is a difference between non-solicitation and non-compete under the rule, especially against a partner who sold the practice or retired.
Re: Massachusetts Governor Announces Plan to Abolish Noncompetes
#109Non-compete clauses have their place in the law but they have in my view been abused in the employment context. The classic case of a good reason for having an enforceable non-compete arises with the sale of goodwill in a business. Proprietor X sells his business for $10M and then sets up shop next door to steal the customers of the business back to his new, competing one. In effect, this is a case of theft. Someone…
I agree with you 100%. But as an anecdote I know full time employee that was supposed to be working on a football game for company ABC. He had an arrangement to work from home. He worked for ~1 year and appeared to be very behind schedule. He then quit, started his own company, 3 months later his company shipped a football game.