Noncompete Claws

Colette Buser worked as a camp counselor for three years, then – at age 19 – moved to a different camp. But the job offer was abruptly withdrawn. It seems Colette’s previous employer had a noncompete clause in her contract and threatened to sue.

You know how jealously those companies have to guard their intellectual property. What if a competitor – or the NSA or hackers from the Chinese Army –were to get hold of the technology for sharpening sticks to toast marshmallows?

In a similar case, hair stylist Daniel McKinnon left his salon job but then was prevented by a noncompete clause from taking a new job – and he hadn’t even quit.

He had been fired because of friction with his manager. They must have feared that in retribution he would reveal the secret of how to do a spit curl without expectorating.

Whatever their psychosis, the judge agreed that McKinnon’s ex-employers had Massachusetts law on their side (though Governor Deval Patrick is now trying to change it). Why do state legislatures enact laws so exploitative of workers and contemptuous of their rights?

Could it be this simple — that camp counselors and hair stylists have no political PACs and no lobbyists?

These are not isolated cases. Noncompete clauses are a hot trend, reports the New York Times (where these two episodes were cited) –not just for engineers and scientists with highly sensitive inside knowledge but also for chefs, stock clerks, green grocers, lawn trimmers, yoga teachers, beauticians, and grunts on the shop floor.

Many states, though far from all, insist that noncompetes be narrowly limited and serve a legitimate business interest. A majority of economists, labor experts, and venture capitalists see noncompetes as suppressing competition (obviously) and stifling innovation – and they point to Silicon Valley as the kind of dynamic that can flourish in the absence of noncompetes — which are banned in California.

“Where noncompetes are not enforced, there’s a more open labor market,” says Matthew Marx, a professor of entrepreneurship at MIT. “Companies compete for talent.”

Companies compete for talent. Can you imagine? Sounds almost like free market capitalism.

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About Al

Editors of The Horse You Rode In On (listed below) hail from Boston, Pittsburgh, and San Francisco. All contributions are signed. When guest contributors are included, their comments will be signed in a manner consistent with their needs for discretion, witness protection, or yearning for personal adulation.