Jeff Bennett's Blog

Massachusetts is blessed as the home of some of the worlds best universities.  Thousands flock to our region to be educated.  Thousands more utilize this ecosystem to conduct breakthrough research.  We also are home to what has been a vibrant venture capital community.  These should be the ingredients for robust innovation.  There are many drivers and issues and I have posted about the “innovation glut” in the past.  One area where we need help is at the state level to enable innovation and Massachusetts laws in their current form are not helping in this regard.

There has been a movement building for years to modify the Massachusetts laws on Non-Competes. The Alliance for Open Competition is a group of entrepreneurs, investors and academics that have come together to foster innovation throughout the US.  One of the areas that this group has been focused on is the elimination of non-compete agreements mandated by employers that force employees to sign away their rights to engage in any business of a competitive nature when they leave present jobs.  The Alliance for Open Competition blog is very informative and has been tracking this groups actions and views over the last couple of years.

The time is now to make something happen around Non-Cometes in Massachusetts.  State Representative Will Brownsberger has filed Massachusetts House Bill 1794.  The bill  is co-sponsored by State Senator Patricia Jehlen. If enacted into law, this bill  would void any part of an employment contract that restricts an employee’s ability to seek work after they’ve left their employer. The bill’s backers say that such clauses, which are extensively used in the technology industry to keep employees from setting up competing businesses or going to work for competitors, are bad for workers and bad for the state’s overall economy. They argue that in states such as California, where non-compete clauses are unenforceable, there’s more innovation because employees have more freedom to move between companies or start their own.

Most opponents of non-compete clauses say other mechanisms such as non-disclosure agreements and trade secrets protections are sufficient to keep employees from using a firm’s own intellectual property against it. The Brownsberger-Jehlen bill wouldn’t affect non-disclosure agreements.  These agreements should not be touched from my perspective.

Brownsberger’s bill was filed January 12. A hearing on the bill is expected to be scheduled this spring. A competing bill filed by State Representative Lori Ehrlich, House Bill 1799, would modify state law regarding non-compete clauses, but would not eliminate them; Ehrlich’s bill makes non-compete agreements unenforceable for employees whose yearly salary is below $100,000 and limits the term of the agreements for other employees to two years.

This week Boston-based Spark Capital, who are members of the Alliance for Open Competition, came out in  support of Brownsberger’s Bill.

As an entrepreneur who has been dedicated to Massachusetts innovation his whole career, I also support House Bill 1794.  I urge all of you who follow this blog to voice your support to your local House and Senate members…and feel free to ping Governor Patrick as well.  Lets enable innovation in Massachusetts!