Very good article by Conor Dougherty in Sunday's NY Times about the proliferation of non-compete agreements. Every year or so an article like this piques national attention, but the conversation usually peters out before meaningful change is implemented at the state level.
I put an enormous amount of effort into reforming our laws on non-competes while working for the Patrick Administration. Aside from being anticompetitive and patently unfair, they stifle entrepreneurship, drag down wages, and provide yet another reason for tech-minded graduates from our world class universities to flee to Silicon Valley (where non-competes are unenforceable under California law). Workers are often presented with these agreements under unfair circumstances, sometimes after they have accepted a position and given notice to a prior employer. Most disturbingly, employers are increasingly demanding that low-wage workers sign non-competes. With the Patrick Administration, I gathered testimony from a part-time pet groomer and a teenage camp counselor, both of whom signed non-competes and were subsequently threatened by former employers after taking other positions.
Employers have ample tools at their disposal to prevent former workers from misappropriating what's rightfully theirs. That's why we have nondisclosure agreements. That's why we have trade secret, copyright and patent laws. That's also why non-solicitation agreements and anti-poaching agreements are perfectly legitimate and enforceable.
But if employers want to prevent former employees from working, the solution is simple: Pay them for the time they're stuck on the sidelines. And provide employees fair and reasonable opportunity to review and understand what they're committing to.
The Dell-EMCs of the world would like us to believe that the sky will fall if we significantly reform our laws on non-competes. But guess what: Silicon Valley is home to the most vibrant tech ecosystem on earth, and a non-compete there isn't worth the paper it's printed on.
The Massachusetts legislature keeps failing us on this.