
Massachusetts gives workers new protections against noncompete clauses - LinuxBender
https://arstechnica.com/tech-policy/2018/08/massachusetts-gives-workers-new-protections-against-noncompete-clauses/
======
dunpeal
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.

~~~
randomQ44
From what I can tell from one listing of the text[0], it looks like there are
two levels of protection.

The first (what you were discussing) prohibits non-competes completely for
certain classes of employees (non-exempt, interns in school, employees
terminated without cause or laid off).

The second applies to everyone else and has 8 requirements for a non-compete
to be enforceable, including "the agreement includes a garden leave clause or
other mutually-agreed upon consideration between the employer and the
employee", where the garden clause includes at least 50% of the employee's
wage! Of course, "other mutually-agreed upon consideration" could be something
much less...

Also interesting: the law looks like it applies to any non-competes signed
after October 1 - it starts in 10 days!

EDIT: IANAL

0:
[https://www.faircompetitionlaw.com/2018/08/06/massachusetts-...](https://www.faircompetitionlaw.com/2018/08/06/massachusetts-
new-noncompete-law-the-text/)

~~~
dunpeal
50% salary isn't adequate protection. Imagine taking a 50% salary cut to
change jobs. Pretty much pulls the rug under any motivation to do that.

Of course, that's also 50% of _base_. For the type of well-performing employee
against whom non-competes are typically enforced, that means you have to
settle for 25% or less of your total comp.

I am not a lawyer either, but from what I've seen in states where compensation
is required, non-compete comp is typically 100% of base.

Of course, bonus is still a huge factor.

~~~
Retric
Often the difference between 0$ and 1$ is vastly more than 1$ and 2$.
Companies are happy to setup a non compete for free, but if they need to spend
real money then that get's rid of the vast majority of cases.

------
ScottBurson
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
>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.

------
bluecalm
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.

~~~
dunpeal
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
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.

------
acconrad
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
>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-...](https://washingtonmonthly.com/magazine/july-
august-2018/the-socialist-network/)

~~~
s73v3r_
"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".

~~~
eli_gottlieb
>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.

~~~
dsfyu404ed
>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.

She'd have been able to do a lot more good for us if she were still fighting
those fights instead of toeing the party line as a senator. There's plenty of
other senators to toe the party line day in and day out. Politicians that want
to protect consumers are much rarer.

~~~
eli_gottlieb
Have you seen the co-determination and anti-corruption bills she just
proposed? They're excellent.

------
Latteland
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.

~~~
dunpeal
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-s...](https://www.geekwire.com/2017/business-personal-amazon-web-services-
decides-enforce-non-compete-contracts/)

(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
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.

~~~
emodendroket
That's true, but the 2% chance of someone making your life miserable is
unfortunate.

~~~
dunpeal
Exactly. It's a nightmare scenario: you're a well-performing, well-paid (but
still underpaid) Amazon employee. You change jobs for much better pay... But
then Amazon sues.

Typically, you'll lose your new job, and probably become untouchable by most
other employers. You'll be forced to pay a small fortune for lawyers, and
spend numerous days in court, with the outcome uncertain, possibly for years,
all while you're likely unemployed.

Not a chance most people would like to take.

~~~
mrajcok
This small risk of something very bad sounds like a case where insurance
against this could be a win-win. "Pay a % of your increased earnings, and we
cover any litigation related to your non-compete." If someone were able to
analyze agreements and state laws to develop a good underwriting model there
could be potential for an insurance tech startup here.

~~~
emodendroket
Yeah, or we could just have passed a version of the "garden leave" that wasn't
toothless

------
dudul
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.

~~~
s73v3r_
"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
Interesting. My current non-compete mentions 50% of my salary at date of
termination for a year, and I'm pretty sure my previous non-competes had
similar provision. Maybe I only worked with mostly "ethical" companies.

~~~
s73v3r_
That sounds incredibly shitty, though. You have to take a 50% pay cut and not
be able to advance in your chosen field?

Most people I know would struggle quite a bit with such a huge pay cut.

~~~
ghaff
It wouldn't be great for a lot of people. I expect some here look at it and
think "Ooh. I get paid 50% of my generous tech salary to work on my side
project/travel the world for a year. Where do I sign up?" But the reality for
many people is that they'd be taking a big pay cut to sit on the sidelines for
a year which could be damaging both financially and professionally.

------
genericlogic
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
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
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.

------
monksy
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.

------
benjohnson
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
>Non-Solicitation Agreements

Aren't those fine and good pretty much everywhere, including California?

~~~
xenadu02
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
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.

------
mfringel
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.

------
nfrankel
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 :-)

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

------
s73v3r_
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.

