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Bill Guarantees 50% Salary For Workers Laid Off With Non-Compete (computerworld.com)
Reader dcblogs shares a Computer World report: Non-compete agreements are controversial for many reasons, but what may be worst of all: Even if you are laid off from your job, a non-compete agreement may still apply. California has made non-compete agreements unenforceable, but Massachusetts has not. Some opponents say that's partly the result of lobbying by EMC, which has considerable clout as a major state employer, headquartered in the Boston suburb of Hopkinton. But the pending $67 billion merger of EMC with Dell, and the prospect of merger-related layoffs, is spurring a new attack on non-compete agreements. State lawmakers are considering limiting non-compete agreements to one year, banning them for low-wage workers and for people terminated without cause. The leading legislative proposal will also require an employer to pay at least 50% of the former employer's salary during the period of time the non-compete is in effect. This salary guarantee is called "garden leave" and is in Massachusetts House bill H.4323. In May, the White House released a report about non-compete agreements. It found that 18% of the workforce is now covered by a non-compete agreement, but over the course of a career, some 37% of all workers (PDF) will be subject to them.
What if the company cut your salary before firing you?
"Hey Bill, you've had your salary reduced to minimum wage, but don't worry, we're firing you!"
Non-compete for 1 year price: ~$8,000
Or even better:
"Hey bill, we'll give you severance pay of $X, but you have to sign these papers..."
Included in that pile is an agreement to take a lower base salary for your last pay check, which is then used for non-compete salary calculations.
Non-compete agreements were historically an executive clause, designed to protect a company against having a key man quit and then immediately apply a headful of inside knowledge against the former employer. When such a worker separated with a non-compete in effect, he was usually walking off with a tidy stack of equity shares whose value would be diminished if he were to violate the agreement.
So when a company requires a non-compete from a worker who does not in any way benefit from the clause, let's require compensation in the form of a percentage of former salary.