Last night, Massachusetts state legislators made no changes to the law concerning the enforcement of noncompete agreements as part of an economic development bill.
State Senator Will Brownsberger confirmed reports that the Senate version of the bill — which included a compromise for those calling for the agreements to be abolished — dropped restrictions on noncompetes in favor of a House version of the bill that made no changes to the current noncompete laws.
Additionally, the Associated Industries of Massachusetts reported that, “The conference committee also declined to adopt a Senate version of the Uniform Trade Secrets Act that would make defense of intellectual property and trade secrets nearly impossible.”
Many local business leaders and legislators have called for the state to abolish the laws regarding noncompetes for a while, with little success. There was a growing sense that the state legislature would wise up and realize the negative impact the agreements have on a robust business ecosystem in Massachusetts. The tech and innovation community, in particular, made an big push to eliminate noncompetes, seeing that Massachusetts was losing tech and engineering talent to Silicon Valley. California does not enforce noncompetes.
In the blog post, AIM seemed to claim a victory for no change occurring with the state’s non-compete laws. Richard C. Lord, the president and chief executive officer of AIM, said in the blog post, “The conference committee deserves tremendous credit for recognizing that the current law governing non-compete agreements in Massachusetts is working just fine.”
The blog post also stated that members of AIM, which number at 4,500 employers in the state, “from every sector of the economy, from technology to manufacturing, expressed overwhelming support for keeping the law as is.” The statement went on to chide “The Patrick administration and a coalition of venture capitalists” who were trying to get noncompetes abolished.
BetaBoston had covered this topic extensively, with Kyle Alspach recently reporting that a compromise seemed imminent earlier this month. Alspach reported that, “The Senate voted 32-7 in favor of the compromise offered by Senator William Brownsberger,” which placed limits on noncompetes without banning them.
Alspach also reported on the hearings leading up to the bill, including the one at the beginning of July at which Andy Palmer, Vertica co-founder/angel investor/leader of Koa Labs and Tamr, asked the legislators to “Please pass this bill without compromise.”
Palmer added, “Please do not make me and folks like me move to California.”