Non-Compete Pacts Called Bad For Tech Innovation

carusoj writes in with NetworkWorld reporting from a panel at Harvard last week. It concluded that employee non-compete agreements have stifled tech startup development in Massachusetts, where the pacts are aggressively enforced, but failed to hold back the tech industry boom in states like California, where they are mostly unenforceable. We've discussed non-competes often here in the past; Techdirt made much the same point a year and a half back.

Comments

Re:apropos

[7-Vodka]

Oh, and the CEO who was threatening to sue and having legal letters sent to him and his perspective employers was getting some kind of perverse gratification out of it. I guess when you're short on manhood it's the little bits of sadism that keep you happy...

And since the CEO was such a prick, I have no second thoughts about disclosing the company name: Intelligent Biosystems in waltham MA. Please work there if you want to be under payed, sued and have a prick for a boss :)

Despicable

[the eric conspiracy]

I really hate non-compete agreements. In an at-will employment state they are indefensible, and Massachusetts would do well to make them unenforceable.

BUT I think that conclusions of this article are very far fetched. With the exclusion of Silicon Valley, Metro Boston is the #1 startup hotbed in the United States. It is one of the best places to create a startup, with immense intellectual capital available from the biggest concentration of 4 year universities in the world. And the geography of the startup area covers 4 states, not just Massachusetts - NH, CT and RI as well.

The article gave no numbers, and no comparisons of the laws of the various states in the region and their effects. Where are the facts, Jack? The article is just speculation without substance to back it up.

I call Bullshit.

Re:this might be a small part of it

[Curlsman]

But DEC then sued MS:
http://www.businessreviewonline.com/blog/archives/2005/10/index.html

"Microsoft hired Cutler, who immediately started work on what would become Windows NT. DEC sued because it believed Cutler had put Mica or even VMS code in NT, and Microsoft eventually paid up $150m. As part of the settlement Microsoft agreed that Windows NT and its BackOffice applications would offer support for DEC's Alpha processor, which is why DEC Alpha was the only RISC chip that supported both Digital's version of Unix and Windows NT - quite a coup for DEC."

And
http://www.vanwensveen.nl/rants/microsoft/IhateMS_1.html

"As a result, many design principles found in the VMS kernel ended up in Windows NT. (The number and splitting of priority levels in the scheduler, the use of demand-paged virtual memory and the layered driver model are only a few examples of many, many similarities.) The first version of VMS was released in 1977. Without trivializing the efforts of Cutler and his team (they did a lot of work on the project) one has to wonder what Microsoft really means with "New Technology". To illustrate, in a little known out-of-court settlement Microsoft paid DEC $150 million in compensation for using portions of old Digital OS code in Windows NT."

Re:apropos

[mrchaotica]

Did it occur to you that the "recession" you mentioned--that is, a condition in which the supply of labor exceeds demand--means that you aren't worth as much as during times of tight supply?

So when the recession ends and your value goes up, you just find a new job at the new market value, right?

Oh, wait -- the non-compete says you can't, and instead have to keep working at your old, now undervalued, rate or starve to death on the street!

Re:apropos

[TheMCP]

First, your friend's compensation priced in this non-compete. If your friend didn't like it, he should have asked for more.

You obviously are too rich to have a clue.

There have been a number of times in the last couple decades when unemployment for geeks in Massachusetts was so high that you darned well took whatever job was offered to you because the alternative was starving. And if they said "sign this", you asked for a pen, not more money, because you damn well knew that the employer knew that there were 500 people desperate for the job you just got who would be delighted to sign if you wouldn't.

I had several periods of being unemployed for 18 months. I had one in which I lost my home and had to live on a friend's couch for six months. When I finally got a job, my employer advertised an open position for my staff, paying 1/4 of what the "market rate" for that job was, and they got 2000 applications.

Turning down a job over a non-compete is something people can do when times are great. For techies in Massachusetts, that hasn't always been an option lately.

Re:Sure, but keep paying me

[Interfacer]

That is exactly how it works in Belgium, and many other European countries.

Your previous employer has to pay your salary for the time during which you are not allowed to compete. Failure to include such a clause, or any of the other specific and mandatory details will void the entire non compete section and you are free to do what you want.