Are Non-Competes Hurting the Massachusetts Economy?
In the January 24-31, 2013 “Business View” section of the Boston Business Journal, State Senator William Brownsberger and State Representative Lori Erlich claimed that one reason Massachusetts is losing jobs to Silicon Valley is that California law prohibits non-compete agreements, whereas in Massachusetts they are routinely enforced. The authors then use this conclusion to argue that the Commonwealth should legislate the elimination, or at least curtail the enforceability, of non-compete agreements.
While I have no reason to doubt that Senator Brownsberger and Representative Erlich genuinely believe that eliminating or curtailing the enforceability of non-competes would be beneficial to the Commonwealth, their argument is deeply flawed. As an initial matter, the legislators’ starting point is the “dozens of stories [they have been told] of young workers whose careers were delayed or substantially derailed by overreaching noncompetition agreements.” Even assuming all of these stories are true, if the issue is the impact non-competes are having on the Massachusetts economy, the real starting point should be the number of people who actually left the Commonwealth simply to avoid signing a non-compete agreement. Further, while Senator Brownsberger and Representative Erlich provide no empirical or even anecdotal data with which to make such … Keep reading