Many Florida workers are familiar with the idea of a non-compete clause. These legal documents prevent workers from taking their skills that were learned at one company and transferring them to another firm. In essence, they are designed to protect the intellectual property rights of the original company. Now, professionals in one state are working to create employment law provisions that would effectively block non-compete agreements in Massachusetts. This interesting trend could spread throughout the country if it is successful in that area.
Official reports show that administrators in large organizations such as the New England Venture Capital Association are working with legislators to ban the non-compete agreements entirely. Those professionals say that such legal documents “stifle innovation” in their state. This is, of course, receiving a significant amount of push-back from industry leaders, who argue that their intellectual secrets should be protected, even at a cost to workers’ careers.
California has led the charge against these employment agreements. Non-compete agreements are fully banned in that state. Those clauses are generally included in larger employment agreements, and they legally prevent workers from joining or founding another similar company in the same industry for a period of about two years.
Venture capitalists in the area say that non-compete agreements prevent entrepreneurs from feeding money back into the area economy. Indeed, one woman said that after a non-compete agreement 20 years ago, she had to fly to a different state twice a month — the employment agreement was not enforceable there.
Such legal changes could expand employment rights for scores of workers on the East Coast, but these movements could also inspire similar legislation in other areas. This would prevent workers from facing lawsuits if they decide to form their own company after leaving their previous employer.
Source: Boston Herald, “Investors, firms decry non-compete clauses” Jordan Graham, May. 29, 2014