Not everyone buys that, though. We’ve seen Acquia, RunKeeper, and a few other companies partially or completely eliminate noncompetes. But there are also a number of local startups that have gone without the agreements from the beginning.
Here are two company founders that have never had noncompetes on why they chose to do so.
Change Collective. Launched in early 2013 by Zeo founder Ben Rubin, the startup has been developing an app that aims to bring the world of self-help onto mobile with courses created by experts that are designed to help users “succeed with change.” Rubin told me that going without noncompetes is part of encouraging freedom and accountability at Change Collective, which employs eight.
“We want folks to have freedom to do whatever you want,” he said. Refusing to make employees sign a noncompete goes hand-in-hand with the other features of working at the company, such as an unlimited vacation policy, ability to work from home as much as desired, and a “personal development budget” of $3,000 a year per employee that can be used for anything learning and growth related.
All those measures are designed on the idea that employees are most productive and happy when they don’t feel controlled. “It’s inconceivable of us to limit employees’ freedom,” Rubin said. Using legal means such as noncompete agreements to bind employees to the company, he contends, is ultimately a “counterproductive” approach.
Quantopian. Founded in early 2012, the company has developed online software that lets finance-minded individuals develop algorithms that can be used to make quant-style automated stock trades (the startup opened its beta up to more users on Thursday). Founder John Fawcett told me that after launching the company he managed to hire his “dream CTO,” Jean Bredeche, who he’d worked with previously in Boston, but who had since moved to San Francisco.
When the time came to draw up employment contracts, Quantopian came up against the disparity between Massachusetts and California laws on noncompetes, Fawcett said.
“We could either have different agreements for everyone in Massachusetts, or we could use the California-style agreement in both places,” he said. “It was so inherently unfair to have different agreements for different people, we decided to not use noncompetes.”
Bredeche has since moved to Massachusetts, but the company continues to avoid noncompete agreements.
The experience has shown Fawcett that noncompetes are not actually helpful for competitiveness — something he hopes other local tech companies will realize.
“I think there is some fear about local competition and a sense that we need mutual disarmament in Massachusetts tech to do away with noncompetes, but I think it really misses the point,” Fawcett said. “All the talent we recruit in Boston has the option to move West for a job. Noncompetes reduce your competitiveness.”
If more companies choose to avoid noncompetes — and employees choose to favor such companies — then noncompetes can fade to a large degree even without legislative moves, he said.
“I think the best thing that could happen from all the recent noise is that instead of moving to California, prospective employees just say: I don’t want a non-compete because it is not a standard in the tech industry,” Fawcett said. “It won’t take long for the standard Massachusetts [employment] agreement to drop noncompetes.”
Image of a chain breaking via Shutterstock.