9 ms·

Massachusetts gives workers new protections against noncompete clauses

139 points by LinuxBender 8y ago

acconrad 8y ago
It's about time. Unfortunately not time for this audience...mostly. It mainly applies to low wage workers, though there is a loose garden clause as well as provisions for hourly workers (which I guess can include us contractors/freelancers). It's a step in the right direction but falls flat in addressing the competition in high tech with SV...which sounds like exactly the sort of timely pandering a guy like Baker would do right before re-election season: let the working class know he's "got their back" while still keeping the people lining his pockets happy. For a guy who calls himself a Republican he's sure got a backwards idea of how free market competition works.
- eli_gottlieb 8y ago
  >It's a step in the right direction but falls flat in addressing the competition in high tech with SV...which sounds like exactly the sort of timely pandering a guy like Baker would do right before re-election season: let the working class know he's "got their back" while still keeping the people lining his pockets happy. For a guy who calls himself a Republican he's sure got a backwards idea of how free market competition works. Well, as long as we're being political, speaking as both a Mass resident and a Millenial American in general, when Republicans talk about "free markets" they mean free from state interference specifically. They make no guarantees, even rhetorical ones, about making sure the markets stay competitive. If you're hearing that from them, you're hearing what you want to hear, rather than what they're saying. And it's not like the Democrats are super-good on this issue either! The parties can, by now, be viewed as coalitions of cultural and economic sectors squabbling over how to distribute the outputs of, and authority over, a fundamentally low-productivity, uncompetitive, oligarchical system in which you "ask permission, not forgiveness" if you want to get something done. Neo-Brandeisianism is the most under-appreciated political idea today[1]. [1] https://washingtonmonthly.com/magazine/july-august-2018/the-socialist-network/ https://washingtonmonthly.com/magazine/july-august-2018/the-...
  - s73v3r_ 8y ago
    "And it's not like the Democrats are super-good on this issue either!" Democrats don't claim to be "super-good" on free markets. Democrats would rather see fair treatment of employees and consumers, even if it makes the markets "less free".
    - ghaff 8y ago
      >Democrats would rather see fair treatment of employees and consumers It's been a strongly Democrat-controlled MA legislature that has avoided passing non-compete reform for a decade or more.
      - Latteland 8y ago
        Plus false equivalence is a way of dismissing anything you can't support. Dems should be more likely to support this because it helps individuals. It also likely helps the whole business economy too.
        s73v3r_ 8y ago
        I don't know where you're getting this isn't supported. I'm entirely on board with this; I just wish it went further.
    - eli_gottlieb 8y ago
      >Democrats don't claim to be "super-good" on free markets. Democrats would rather see fair treatment of employees and consumers, even if it makes the markets "less free". One would think that fair treatment of workers and consumers would involve significantly more stringent enforcement of antitrust law. This is why I appreciate having Elizabeth Warren as our Senator: she has spent her life fighting for our basic interests on issues that weren't sexy enough to get a thousand-person protest march going.
      - rectang 8y ago
        I also admire Warren's emphasis on competitive markets. It's the main thing that draws me to Warren-style capitalism, and I'm with you that "competitive markets" is a worthy rejoinder to "free markets". Free markets deliver monopolies. Competitive markets deliver innovation.
dudul 8y ago
A little disappointing that it doesn't go as far as CA, but it's a good start (why the F do you even need a non-compete in the food or summer camp industries ??). Out of curiosity though, has anybody ever faced an enforced non-compete? I signed many, but never had to deal with this. Don't most of them include a provision forcing the company to pay a share of your salary if they decide to activate it? You would have to be a freaking rockstar to justify that.
- eli_gottlieb 8y ago
  > Don't most of them include a provision forcing the company to pay a share of your salary if they decide to activate it? Not in Massachusetts, that I've ever seen.
  - dudul 8y ago
    I'm in Mass and most of my past non-competes had this clause.
- arielweisberg 8y ago
  I have never seen that outside of finance. I think they are fine as long as the company is willing to give up something of similar value to get it.
  - s73v3r_ 8y ago
    They never are. And given that the company is usually the one making the demand, they get to define "similar value".
- s73v3r_ 8y ago
  "Don't most of them include a provision forcing the company to pay a share of your salary if they decide to activate it?" Almost none of them do that. That's one of the reasons why they're so shitty.
  - dudul 8y ago
benjohnson 8y ago
As a small business owner, this is perfectly fine. It's fair for our employees to jump ship - we wish them well and often they come back. What I'm more concerned with is Non-Solicitation Agreements where our employees can't poach our customers based on inside knowledge - and it looks like those are still fine and good in Massachusetts.
- ghaff 8y ago
  >Non-Solicitation Agreements Aren't those fine and good pretty much everywhere, including California?
  - xenadu02 8y ago
    The situation is murkier in this regard. For the most part, anti-solicitation that covers recruiting people to switch jobs is void in CA. Non-solicitation that covers customers? I’d clear that with a lawyer first.
    - ghaff 8y ago
      Anti-poaching is pretty hard to enforce generally though I've heard of ex-employees systematically trying to recruit ex-coworkers being told to knock it off. (I'm guessing it would be hard to do anything besides scare them off a bit though.) But I'm thinking more of non-solicitation in the vein of calling your entire client list and trying to get them to move. That's much more broadly enforceable.
dunpeal 8y ago
Too little, too late. It only protects "minors, students, and low-wage workers". So non-competes against most of us reading this article are still perfectly enforceable. It's good that they're protecting the weakest class of workers, and those who need this protection the most. Enforcing non-competes against sandwich makers in fast-food chains was probably the most egregious abuse of non-competes ever committed, and a blatant attempt to keep down wages for jobs that already pay barely livable wage. But these are not the classes of workers who made California's economy boom. It's too bad lawmakers prioritize their short-term funding needs and donors over long-term welfare of their state and its economy.
- presscast 8y ago
  >Too little, too late And a damn shame, too. One of the major enabling factors for Silicon Valley's success has been the unenforcability of non-compete clauses in CA. MA has a lot going for it (e.g.: MIT, relative proximity with Europe, ...), but seems hell-bent on being the place where only large government contractors can emerge.
  - dsfyu404ed 8y ago
    >And a damn shame, too Meh, you reap what you sow and MA has spend decades cultivating incompetent government that's incapable of addressing the needs of the population but perfectly capable of spending our money. I'm sure we look like we have out shit together from far away in SillyValley but I assure you we don't. >MA has a lot going for it but seems hell-bent on being the place where only large government contractors can emerge. Large government contractors naturally find it easier to exist under a government that likes to stick its nose in all sorts of things (god forbid it actually stick its nose in things in a way that makes life better for people) than companies that are not specifically optimized to work with government.
- emodendroket 8y ago
  Well, I completely agree that it doesn't go far enough (that's Massachusetts for you...) but it's a start. The article also specifies that laid-off workers are exempt.
s73v3r_ 8y ago
Good. These agreements by themselves are completely immoral, but when you have a sandwich shop and a summer camp using them, then you know you've reached a new level of evil.
ScottBurson 8y ago
Noncompetes are a classic tragedy of the commons, where it's in every individual company's interest to use them, but doing so nonetheless works against the vitality of the whole economy, and the competitiveness of the state. Great to see Massachusetts taking a step in the right direction.
- dsfyu404ed 8y ago
  >Great to see Massachusetts taking a step in the right direction. As a Masshole I assure you that this is just a distraction disguised to hide the fact that we've taken at least two steps back on some other issue.
Latteland 8y ago
I want to run for office in the Washington state legislature on this issue. But I expect that would draw negative attention from Amazon, Microsoft et Al. You'd have to be in a race where you have an excellent shot before drawing recruited opposition.
- teachrdan 8y ago
  To the contrary: You could start the cultural shift needed to make such a big change by running as a single-issue candidate. The negative attention would be valuable in bringing to light an issue that most Americans still don't know about.
- dunpeal 8y ago
  I'd expect Amazon to fight you hard. They take their non-competes very seriously. I had friends get offers for senior positions, successfully negotiate every aspect of the package - especially substantial pay increases - yet fail to get any traction on the non-competes. Amazon was clear that this clause is non-negotiable, even when everything else is, and even when that clause alone caused the candidate to decline. They also have one of the most notorious records of actually suing former employees for non-compete breaches: https://www.geekwire.com/2017/business-personal-amazon-web-services-decides-enforce-non-compete-contracts/ https://www.geekwire.com/2017/business-personal-amazon-web-s... (Which didn't prevent them from telling my friend "why worry about the non-compete, it's almost never enforced".) So yeah, I don't expect them to give it up so easily. It's a clear case where the best interest of the state clashes with the best interest of large corporations... and the corporations prevail. TFA mentions research that supports the claim that California became tech capital of the US because of non-compete non-enforcement. What's good for each individual business is bad for all of them together and the economy as a whole. Tragedy of the commons.
  - Twirrim 8y ago
    On a scale of "number of staff who leave" vs "number of staff who threatened with legal action", it really does count as almost never enforced.
sharemywin 8y ago
To me they only really make sense for sales people and the accounts they currently are assigned.
bluecalm 8y ago
Non-competes should require regular payment of for example 50% of your salary with some maximum, for example 2 years. Don't want your previous workers to compete? Pay them. This it will only be used in justified cases and most people will happily accept significant salary for doing nothing.
- ghaff 8y ago
  >most people will happily accept significant salary for doing nothing. Nonsense. Most people are not in a position to just take a 50% pay cut. Furthermore, taking a year or two off from a career can be very damaging when you look for a new job after the non-compete expires.
  - bluecalm 8y ago
    You can do something else. Usually non-competes are very specific. I don't know anyone who wouldn't take 50% of salary for day 2 years in exchange to have all this free time to do other things. It's not like you can't get another job.
- dunpeal 8y ago
  50% is a huge paycut. Most people won't voluntarily accept that, so it's hardly an adequate protection. For what it's worth, in states that do require compensation for non-competes, that compensation is typically about the same as the base salary, i.e. at or close to 100%.
  - bhandziuk 8y ago
    But it is a heck of a lot of money if you want to get a job in another sector for a period of time.
  - bluecalm 8y ago
    It's a huge pay cut but you're not working. You have tons of time to do something else while collecting money. It's a very sweet deal.
  - 8y ago
monksy 8y ago
A thought about this: How are these even legally enforceable? If the employment is contingent upon this agreement, how can you make this claim that there are penalties for you after you leave or you're forced to leave? This is completely a one-sided contract that is detrimental to the person with less resources. It seems like to me, this contract no longer puts you "at-will." You're punished for walking away.
mfringel 8y ago
One of the big protections in there is that a noncompete can not be enforced against someone who is terminated without cause or laid off.* There are certain kinds of maneuvers that Just Shouldn't Work. Laying off someone and then invoking a non-compete against them is one of them. --- * The one exception being if they put in a non-compete as part of a severance payment.
genericlogic 8y ago
While I'm happy to see some sensible restraints come to noncompetes I'm sad that it wasn't taken further. I actually applied, interviewed and got a job offer to a great little startup in Boston. After all was said and done they slipped in that I had to sign a noncompete. This noncompete was incredibly broad. It could have applied to nearly any future employer. I worked with my lawyer and asked for some further limiting language but everything I asked for was rejected by HR. I stuck to my guns and said that I could not sign this. The job was a perfect fit for me. I still wonder what I could have done there.
- ghaff 8y ago
  That's too bad. My understanding is that it's mostly the big companies who pushed the hardest against non-compete reform. EMC was particularly prominent. I actually had to sign an EMC non-compete when the company I was at was acquired a number of years back. Fortunately, the terms didn't seem likely to affect me (and they didn't).
jaxtellerSoA 8y ago
The only situation where non-competes make sense and should be allowed is when someone is selling a business to someone else. If I was buying a business, I would want to be damn sure the guy selling it to me isn't going take my money, turn around and open a competing business and poach all the customers, since they know the previous owner and don't know me. That is only time non-competes should be allowed.
nfrankel 8y ago
I don't like my country that much (France), but here, to be lawful, a noncompete clause must be: * limited in time * limited in area * paid I don't know the specifics and I'm not a lawyer, but in general, employees who sign such clauses are extremely happy if those are enforced :-)
deleted 8y ago
[deleted]

139 points by LinuxBender 8y ago

It's about time. Unfortunately not time for this audience...mostly. It mainly applies to low wage workers, though there is a loose garden clause as well as provisions for hourly workers (which I guess can include us contractors/freelancers). It's a step in the right direction but falls flat in addressing the competition in high tech with SV...which sounds like exactly the sort of timely pandering a guy like Baker would do right before re-election season: let the working class know he's "got their back" while still keeping the people lining his pockets happy. For a guy who calls himself a Republican he's sure got a backwards idea of how free market competition works.

eli_gottlieb 8y ago
>It's a step in the right direction but falls flat in addressing the competition in high tech with SV...which sounds like exactly the sort of timely pandering a guy like Baker would do right before re-election season: let the working class know he's "got their back" while still keeping the people lining his pockets happy. For a guy who calls himself a Republican he's sure got a backwards idea of how free market competition works. Well, as long as we're being political, speaking as both a Mass resident and a Millenial American in general, when Republicans talk about "free markets" they mean free from state interference specifically. They make no guarantees, even rhetorical ones, about making sure the markets stay competitive. If you're hearing that from them, you're hearing what you want to hear, rather than what they're saying. And it's not like the Democrats are super-good on this issue either! The parties can, by now, be viewed as coalitions of cultural and economic sectors squabbling over how to distribute the outputs of, and authority over, a fundamentally low-productivity, uncompetitive, oligarchical system in which you "ask permission, not forgiveness" if you want to get something done. Neo-Brandeisianism is the most under-appreciated political idea today[1]. [1] https://washingtonmonthly.com/magazine/july-august-2018/the-socialist-network/ https://washingtonmonthly.com/magazine/july-august-2018/the-...
- s73v3r_ 8y ago
  "And it's not like the Democrats are super-good on this issue either!" Democrats don't claim to be "super-good" on free markets. Democrats would rather see fair treatment of employees and consumers, even if it makes the markets "less free".
  - ghaff 8y ago
    >Democrats would rather see fair treatment of employees and consumers It's been a strongly Democrat-controlled MA legislature that has avoided passing non-compete reform for a decade or more.
    - Latteland 8y ago
      Plus false equivalence is a way of dismissing anything you can't support. Dems should be more likely to support this because it helps individuals. It also likely helps the whole business economy too.
      - s73v3r_ 8y ago
        I don't know where you're getting this isn't supported. I'm entirely on board with this; I just wish it went further.
  - eli_gottlieb 8y ago
    >Democrats don't claim to be "super-good" on free markets. Democrats would rather see fair treatment of employees and consumers, even if it makes the markets "less free". One would think that fair treatment of workers and consumers would involve significantly more stringent enforcement of antitrust law. This is why I appreciate having Elizabeth Warren as our Senator: she has spent her life fighting for our basic interests on issues that weren't sexy enough to get a thousand-person protest march going.
    - rectang 8y ago
      I also admire Warren's emphasis on competitive markets. It's the main thing that draws me to Warren-style capitalism, and I'm with you that "competitive markets" is a worthy rejoinder to "free markets". Free markets deliver monopolies. Competitive markets deliver innovation.

dudul 8y ago

A little disappointing that it doesn't go as far as CA, but it's a good start (why the F do you even need a non-compete in the food or summer camp industries ??). Out of curiosity though, has anybody ever faced an enforced non-compete? I signed many, but never had to deal with this. Don't most of them include a provision forcing the company to pay a share of your salary if they decide to activate it? You would have to be a freaking rockstar to justify that.

eli_gottlieb 8y ago
> Don't most of them include a provision forcing the company to pay a share of your salary if they decide to activate it? Not in Massachusetts, that I've ever seen.
- dudul 8y ago
  I'm in Mass and most of my past non-competes had this clause.
arielweisberg 8y ago
I have never seen that outside of finance. I think they are fine as long as the company is willing to give up something of similar value to get it.
- s73v3r_ 8y ago
  They never are. And given that the company is usually the one making the demand, they get to define "similar value".
s73v3r_ 8y ago
"Don't most of them include a provision forcing the company to pay a share of your salary if they decide to activate it?" Almost none of them do that. That's one of the reasons why they're so shitty.
- dudul 8y ago

benjohnson 8y ago

As a small business owner, this is perfectly fine. It's fair for our employees to jump ship - we wish them well and often they come back. What I'm more concerned with is Non-Solicitation Agreements where our employees can't poach our customers based on inside knowledge - and it looks like those are still fine and good in Massachusetts.

ghaff 8y ago
>Non-Solicitation Agreements Aren't those fine and good pretty much everywhere, including California?
- xenadu02 8y ago
  The situation is murkier in this regard. For the most part, anti-solicitation that covers recruiting people to switch jobs is void in CA. Non-solicitation that covers customers? I’d clear that with a lawyer first.
  - ghaff 8y ago
    Anti-poaching is pretty hard to enforce generally though I've heard of ex-employees systematically trying to recruit ex-coworkers being told to knock it off. (I'm guessing it would be hard to do anything besides scare them off a bit though.) But I'm thinking more of non-solicitation in the vein of calling your entire client list and trying to get them to move. That's much more broadly enforceable.

dunpeal 8y ago

Too little, too late. It only protects "minors, students, and low-wage workers". So non-competes against most of us reading this article are still perfectly enforceable. It's good that they're protecting the weakest class of workers, and those who need this protection the most. Enforcing non-competes against sandwich makers in fast-food chains was probably the most egregious abuse of non-competes ever committed, and a blatant attempt to keep down wages for jobs that already pay barely livable wage. But these are not the classes of workers who made California's economy boom. It's too bad lawmakers prioritize their short-term funding needs and donors over long-term welfare of their state and its economy.

presscast 8y ago
>Too little, too late And a damn shame, too. One of the major enabling factors for Silicon Valley's success has been the unenforcability of non-compete clauses in CA. MA has a lot going for it (e.g.: MIT, relative proximity with Europe, ...), but seems hell-bent on being the place where only large government contractors can emerge.
- dsfyu404ed 8y ago
  >And a damn shame, too Meh, you reap what you sow and MA has spend decades cultivating incompetent government that's incapable of addressing the needs of the population but perfectly capable of spending our money. I'm sure we look like we have out shit together from far away in SillyValley but I assure you we don't. >MA has a lot going for it but seems hell-bent on being the place where only large government contractors can emerge. Large government contractors naturally find it easier to exist under a government that likes to stick its nose in all sorts of things (god forbid it actually stick its nose in things in a way that makes life better for people) than companies that are not specifically optimized to work with government.
emodendroket 8y ago
Well, I completely agree that it doesn't go far enough (that's Massachusetts for you...) but it's a start. The article also specifies that laid-off workers are exempt.

s73v3r_ 8y ago

Good. These agreements by themselves are completely immoral, but when you have a sandwich shop and a summer camp using them, then you know you've reached a new level of evil.

ScottBurson 8y ago

Noncompetes are a classic tragedy of the commons, where it's in every individual company's interest to use them, but doing so nonetheless works against the vitality of the whole economy, and the competitiveness of the state. Great to see Massachusetts taking a step in the right direction.

dsfyu404ed 8y ago
>Great to see Massachusetts taking a step in the right direction. As a Masshole I assure you that this is just a distraction disguised to hide the fact that we've taken at least two steps back on some other issue.

Latteland 8y ago

I want to run for office in the Washington state legislature on this issue. But I expect that would draw negative attention from Amazon, Microsoft et Al. You'd have to be in a race where you have an excellent shot before drawing recruited opposition.

teachrdan 8y ago
To the contrary: You could start the cultural shift needed to make such a big change by running as a single-issue candidate. The negative attention would be valuable in bringing to light an issue that most Americans still don't know about.
dunpeal 8y ago
I'd expect Amazon to fight you hard. They take their non-competes very seriously. I had friends get offers for senior positions, successfully negotiate every aspect of the package - especially substantial pay increases - yet fail to get any traction on the non-competes. Amazon was clear that this clause is non-negotiable, even when everything else is, and even when that clause alone caused the candidate to decline. They also have one of the most notorious records of actually suing former employees for non-compete breaches: https://www.geekwire.com/2017/business-personal-amazon-web-services-decides-enforce-non-compete-contracts/ https://www.geekwire.com/2017/business-personal-amazon-web-s... (Which didn't prevent them from telling my friend "why worry about the non-compete, it's almost never enforced".) So yeah, I don't expect them to give it up so easily. It's a clear case where the best interest of the state clashes with the best interest of large corporations... and the corporations prevail. TFA mentions research that supports the claim that California became tech capital of the US because of non-compete non-enforcement. What's good for each individual business is bad for all of them together and the economy as a whole. Tragedy of the commons.
- Twirrim 8y ago
  On a scale of "number of staff who leave" vs "number of staff who threatened with legal action", it really does count as almost never enforced.

sharemywin 8y ago

To me they only really make sense for sales people and the accounts they currently are assigned.

bluecalm 8y ago

Non-competes should require regular payment of for example 50% of your salary with some maximum, for example 2 years. Don't want your previous workers to compete? Pay them. This it will only be used in justified cases and most people will happily accept significant salary for doing nothing.

ghaff 8y ago
>most people will happily accept significant salary for doing nothing. Nonsense. Most people are not in a position to just take a 50% pay cut. Furthermore, taking a year or two off from a career can be very damaging when you look for a new job after the non-compete expires.
- bluecalm 8y ago
  You can do something else. Usually non-competes are very specific. I don't know anyone who wouldn't take 50% of salary for day 2 years in exchange to have all this free time to do other things. It's not like you can't get another job.
dunpeal 8y ago
50% is a huge paycut. Most people won't voluntarily accept that, so it's hardly an adequate protection. For what it's worth, in states that do require compensation for non-competes, that compensation is typically about the same as the base salary, i.e. at or close to 100%.
- bhandziuk 8y ago
  But it is a heck of a lot of money if you want to get a job in another sector for a period of time.
- bluecalm 8y ago
  It's a huge pay cut but you're not working. You have tons of time to do something else while collecting money. It's a very sweet deal.
- 8y ago

monksy 8y ago

A thought about this: How are these even legally enforceable? If the employment is contingent upon this agreement, how can you make this claim that there are penalties for you after you leave or you're forced to leave? This is completely a one-sided contract that is detrimental to the person with less resources. It seems like to me, this contract no longer puts you "at-will." You're punished for walking away.

mfringel 8y ago

One of the big protections in there is that a noncompete can not be enforced against someone who is terminated without cause or laid off.* There are certain kinds of maneuvers that Just Shouldn't Work. Laying off someone and then invoking a non-compete against them is one of them. --- * The one exception being if they put in a non-compete as part of a severance payment.

genericlogic 8y ago

While I'm happy to see some sensible restraints come to noncompetes I'm sad that it wasn't taken further. I actually applied, interviewed and got a job offer to a great little startup in Boston. After all was said and done they slipped in that I had to sign a noncompete. This noncompete was incredibly broad. It could have applied to nearly any future employer. I worked with my lawyer and asked for some further limiting language but everything I asked for was rejected by HR. I stuck to my guns and said that I could not sign this. The job was a perfect fit for me. I still wonder what I could have done there.

ghaff 8y ago
That's too bad. My understanding is that it's mostly the big companies who pushed the hardest against non-compete reform. EMC was particularly prominent. I actually had to sign an EMC non-compete when the company I was at was acquired a number of years back. Fortunately, the terms didn't seem likely to affect me (and they didn't).

jaxtellerSoA 8y ago

The only situation where non-competes make sense and should be allowed is when someone is selling a business to someone else. If I was buying a business, I would want to be damn sure the guy selling it to me isn't going take my money, turn around and open a competing business and poach all the customers, since they know the previous owner and don't know me. That is only time non-competes should be allowed.

nfrankel 8y ago

I don't like my country that much (France), but here, to be lawful, a noncompete clause must be: * limited in time * limited in area * paid I don't know the specifics and I'm not a lawyer, but in general, employees who sign such clauses are extremely happy if those are enforced :-)

deleted 8y ago

[deleted]