It doesn’t look good for the effort to ban noncompete agreements in Massachusetts. The tech community is divided, giving lawmakers an excuse to ignore the matter, and Massachusetts House Speaker Robert DeLeo has left the proposal out of the House economic development bill.
The reasons for ridding Massachusetts of noncompetes are myriad, from the practical (more freedom should lead to more innovation) to the philosophical (noncompetes just seem antithetical to where the tech industry has gone). As the New England Venture Capital Association puts it: “Companies use non-competes to hold employees captive and stifle competition all in the name of protecting intellectual property.”
But here’s another reason why those who oppose noncompetes shouldn’t give up: The newly increased awareness around the issue could, ironically, lead to more employees looking to California.
That’s because many workers in Massachusetts simply don’t know what noncompetes are (and don’t learn they must sign the agreement until they start work).
At least, workers didn’t used to know what noncompetes are: A flood of attention around the issue in recent months has likely made many workers more informed about it.
So, the genie is out of the bottle. And that might have some yet-undiscussed consequences for Massachusetts.
This new awareness could lead some workers — those who are particularly keen on being able to move around to other companies in their industry — to more strongly consider moving to California or other states without noncompetes.
Same goes for entrepreneurs who are especially focused on having as few constraints as possible around recruiting for their startup.
It’s just conjecture, of course, but I ran it by MIT Sloan’s Matthew Marx, who has done a significant amount of research on the effects of noncompetes on workers.
“That’s entirely possible,” Marx said. “Given the awareness that the governor has promoted, that the hearings have promoted, the press coverage — if workers become more knowledgable and savvy, then maybe even more of them go to California.”
Image of a vintage postcard from California via Shutterstock.
Kyle Alspach has worked in journalism in Massachusetts since 2005 and was one of the original staff writers at BetaBoston.
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