Non-compete agreements are here to stay in Massachusetts. The House opted to not include the non-compete reform in the final version of the Bay State’s economic development bill on Friday.
Though originally proposed by Governor Deval Patrick in early April, the amendment to ban non-competes was written by State Senator William Brownsberger. The amendment is technically “held in conference,” meaning it could, in theory, be reported as a separate bill out of conference, but that outcome looks unlikely at this time.
"We believe the state’s current law on non-competes strikes an appropriate balance between protecting employers’ interests and allowing employee mobility," said Paul Guzzi, president and CEO of the Chamber, in a statement to the Boston Herald. "Non-compete policy in Massachusetts is well developed and its usage on a voluntary basis by both employers and employees is well established."
The tech and startup community has spoken out in favor of the elimination of non-competes, stating that such agreements smother innovation before it has a chance to sprout. Non-competes' enforceability is also thought to hinder Massachusetts’ reputation as an innovation ecosystem, putting the Bay State behind competing communities in California and New York.
The battle against non-competes seemed to take a turn in tech’s favor last month, when Boston City Councillor At-Large Michelle Wu and District 7 Councillor Tito Jackson called upon the Massachusetts Legislature to abandon non-competes.
Soon after, however, Speaker of the House Bob de Leo proposed his own economic development bill that failed to address the status of non-competes whatsoever. The reason: Too much division over the issue, within both the legislature and the company stakeholders.
de Leo’s stance seemed an harbinger that, if the Bay State’s business community couldn’t come together on an opinion on non-competes, then nothing would be done at the policy level. And on Friday, that’s exactly what happened.
It’s not a loss entirely, however. The New England Venture Capital Association, which led the grassroots charge for the ban, mobilized and educated hundreds of people within the ecosystem. Awareness is key to making the change happen, so let’s keep the conversation going.
