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Massachusetts Governor Announces Plan to Abolish Noncompetes

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Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#31

Post by mathattack »

geebee wrote: post #26

This is good news for and from Massachusetts. I read a very interesting thing about how non-compete agreements signed in other states are treated in California... http://lawzilla.com/content/noncompete.shtml "Who wins often depends upon a race to the courthouse. For multi-state employers it is often a rush to the courthouse to determine if a non-compete agreement is valid. The employer's strategy is to get an order o…

I had heard similar - that if you go to CA, you have to pre-emptively sue to get out of it.

Are non-competes enforced often enough that this is an issue?

I've only heard of a few cases, and these were notorious hedge funds, or flagrant post-move poaching of employees. (Not just "I'm gone" but "I'm gone and taking my team even though I signed something that said I wouldn't.")

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#32

Post by [deleted] »

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.

[deleted]

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#33

Post by ScottBurson »

tptacek wrote: post #6

It's worth knowing, maybe just because it's interesting, than even if pro-forma employee noncompetes are unenforceable, that doesn't mean all of them are. Get acquired sometime. Those noncompetes are binding, even in California.

You mean "get acquired" as an owner, or as an employee? I've been through two acquisitions as an employee and don't recall anything special in the way of non-compete agreements.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#34

Post by _delirium »

rz2k wrote: post #28
GFK_of_xmaspast wrote: post #12

Earlier quoted context omitted.

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

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 the profits of businessmen, which is why parties mainly representing the business sector have advocated for them. Sometimes they produce more wealth for everyone in society, sometimes they reduce it, other times they're roughly wealth-neutral but just reallocating it. But that isn't the point or the parties' raison d'être, though they may pretend it is in their politicking.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#35

Post by dalek2point3 »

My professor at MIT has done some of the most path breaking research on the impact of non-competes on innovation, and what he finds is mostly negative. http://mitsloanexperts.mit.edu/matthew-marx-non-compete-agre...

This is the best example for the impact of policy-driven legislation.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#36

Post by tptacek »

iamthepieman wrote: post #19
tptacek wrote: post #17

Earlier quoted context omitted.

They could conceivably be liable for interference. A previous employer of mine had that problem.

This was a company with under 50 employees who had a full time general counsel. They had no lines of business that were remotely related to law. Maybe that's not abnormal but I had never, and have never since, seen a small company who didn't outsource their GC needs.

I think the general pattern I'm referring to is:

* Candidate inbound

* Has presumably-unenforceable noncompete

* Prospective employer made aware of noncompete

* Prospective employer concerned that former employer might make a claim that the hiring process constituted knowing interference with a contract, and that that claim might be colorable even if the noncompete had no teeth.

* No hire

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#37

Post by tptacek »

ScottBurson wrote: post #33
tptacek wrote: post #6

It's worth knowing, maybe just because it's interesting, than even if pro-forma employee noncompetes are unenforceable, that doesn't mean all of them are. Get acquired sometime. Those noncompetes are binding, even in California.

You mean "get acquired" as an owner, or as an employee? I've been through two acquisitions as an employee and don't recall anything special in the way of non-compete agreements.

Mostly owner, although depending on the grants and the terms of your acceleration, maybe? employee too?

The issue as I understand it is "consideration", beyond simple wages for employment.

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#39

Post by ghaff »

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.

Economic theory would suggest so. I suspect that, adjusting for everything else, it's a pretty small effect. Would be an interesting study though. I wonder if there's one there.

[EDIT: Duh. I misread the original post. Of course, the salary should be higher not lower to compensate for such a restriction--though I still suspect it would be small.]

Re: Massachusetts Governor Announces Plan to Abolish Noncompetes

#40

Post by khuey »

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.

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.
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