

Legislator Drafting Bill to Outlaw Non-Compete Agreements in Massachusetts - rfreierman
http://www.xconomy.com/boston/2008/12/16/legislator-drafting-bill-to-outlaw-non-compete-agreements-in-massachusetts/

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tptacek
Massachusetts is already hostile to noncompete agreements; they have a "blue
pencil" standard that allows judges to rewrite noncompetes instead of
requiring the original agreement to be enforced verbatim, and noncompetes in
MA have to be specific to the work the employee was doing.

Like I said last time when this subject came up, consider whether this
development is a great thing; there's unlikely to be a federal ban on
noncompetes, which means other jurisdictions may be nominally more attractive
for sales and knowledge businesses because they're legally favorable to
business owners.

~~~
kragen
Noncompete agreements shift some power from employees to owners of capital. A
jurisdiction that forbids noncompete agreements will tend to be less
attractive to owners of capital and more attractive to employees. But a
_business_ generally requires both employees and owners of capital. Whether
jurisdictions that forbid noncompete agreements are more attractive to a
certain kind of business therefore depends in the short term on whether
employees or owners of capital have more power in that kind of business, and
in the long term on whether employees or owners of capital are more important
to the success of that kind of business.

As pg has repeatedly asserted at great length, the capital requirements for
software businesses are at an all-time low, so we would expect noncompetes to
repel such businesses.

~~~
tptacek
To be clear, I'm anti-noncompete.

However, I'd ask you to consider that in Graham's world, this distinction
between "employees" to "owners" gets fuzzy; _you're_ supposed to be the owner,
not an "employee". You can't do everything yourself. You might want to hire
someone to help QA your application. You might not want that person to take
their test plan, bug list, and design documents to your next nearest
competitor, or to use your internal wiki as a blueprint to start their own
competing company.

~~~
anamax
> You might want to hire someone to help QA your application. You might not
> want that person to take their test plan, bug list, and design documents to
> your next nearest competitor, or to use your internal wiki as a blueprint to
> start their own competing company.

Confidential information agreements, which are legal in CA, seem to handle
that case.

~~~
kragen
Inevitably, though, your competitor will learn a lot when they hire someone
experienced in the field.

~~~
anamax
Yes, but that's because they hired someone experienced, not because they hired
someone who knew your plans and designs.

In my experience, CA employers are very careful about IP from former
employers.

The "IP theft" cases that I'm (somewhat) aware of weren't "took stuff to new
employer" but "started own biz using prev employer's stuff".

~~~
tptacek
The real textbook case isn't the knowledge workers themselves, but salespeople
joining competitors and taking their rolodex.

The same thing applies to consultants, who can parlay relationships their
previous employers built up for them.

~~~
DenisM
If rolodex is built on company's time and dime then it's company's IP. No need
for non-compete in that case.

Reltionships are fair game. I don't think any corproation should be able to
dictate whom I can and can not talk to. This is where their business interests
end and my personal liberties begin.

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tjic
Legislation that forbids two consenting adults from engaging in mutually
beneficial interactions is always bad.

One does not have to be in favor of non-competes to dislike legislators
removing or curtailing a civil right like the freedom of contract.

~~~
imichael
An agreement between a big company and an individual really isn't a case of
"consenting adults". The company has too much power. In the case of top
officers, then I agree, it should be negotable. Put another way the choices
are

1) negotiated noncompete 2) noncompete is a given 3) noncompete forbidden

We now have (2). In theory (1) would be better. (3) is bad for the same
reasons that (2) is. But more people benefit from (3), so this legislation
could be an improvement.

Re. (1), if a company had to pay me to not compete in the future, I wonder
what it would really be worth to them? I bet it's worth more to the
individual.

Many years ago I saw the managers at a former employer prevent an ex-employee
from taking a new job based on one of these agreements. They were not really
concerned about the competition. They wanted to teach him, and the rest of us,
a lesson.

~~~
tptacek
So then, noncompetes should be allowed for 4-person startups, but disallowed
for Walgreens.

~~~
tocomment
In general I think all regulations should only apply to large companies. It
sounds absurd at first glance, but starts to make sense once you think it
over.

~~~
eru
Then large companies will just set up small straw-companies to do non-
regulated deals with you.

