Clarence Fanto: Noncompete clauses are out of hand


LENOX -- It always pays to read the fine print.
During an enlightening visit by Gov. Deval Patrick to The Eagle last week, he voiced hope that state lawmakers would pass his proposal to eliminate noncompete clauses often overlooked by new hires if they have to sign employment contracts.

This isn’t just an issue for high-tech specialists, attorneys, accountants, financial managers, bankers and other high-income professionals.

During a hearing on Beacon Hill last month on Patrick’s efforts to persuade reluctant legislators, the father of Colette Buser, a 19-year-old college student, explained how she lost her job offer at a summer camp. The problem was that another camp in Wellesley, where she had worked as a counselor for three years, could have sued to enforce the noncompete provision she had signed.

The clause, as depicted in published reports from Boston, barred her for one year from working at a competing camp within 10 miles of Wellesley or Natick.

Company executives insist the provisions protect businesses that invest time and money in training employees.

Understandable, perhaps, in specialized fields where trade secrets presumably could be revealed.

But camp counselors? Event planners? Chefs? Hair stylists? Yoga instructors? Fitness counselors?

A Massachusetts man who sprayed pesticides on lawns for a living had to sign a two-year noncompete agreement, The New York Times reported. A textbook editor was subjected to a six-month exclusive deal; a Boston University grad needed to pledge a one-year noncompete provision for a low-level social media job at a marketing firm. One year was the requirement for a college junior’s summer internship at an electronics firm.

A recent book by a University of San Diego law professor on the subject is titled "Talent Wants to be Free." I second that emotion.

Gov. Patrick’s proposal would ensure that workers couldn’t leave their jobs with trade secrets and includes a handful of exceptions to the ban on these noncompete requirements.

Even though a state House committee approved the legislation, House Speaker Robert DeLeo may have derailed the governor’s efforts by failing to include noncompete contracts in an economic development package he offered as an alternative to Patrick’s jobs bill.

"One of the most important aspects that we have to address in the House, especially in these difficult economic times, is the creation of jobs, jobs, and more jobs," DeLeo told reporters. "That’s what this legislation does." He did not mention noncompete clauses.

But other House lawmakers called the issue too divisive, citing opposition in the business community. So, barring a last-minute compromise that would revive the governor’s proposal, California and North Dakota will remain the only states that prohibit noncompete agreements, giving workers their freedom in the job market.

Tech companies argue that the pledges protect "intellectual property" and keep talented, high-skilled employees from jumping ship. But one can argue that innovation, especially at start-ups, is blocked when desirable employees are locked into their current jobs.

Maybe there’s a middle course -- say, a time limit of six months until a worker is a free agent, especially in high-tech companies where there could be legitimate concern over trade secrets.

But counselors? The camp that put the figurative handcuffs on its employee who wanted a change after three years is part of an eastern Massachusetts chain of 30.

Its owner and founder, Joe Kahn, stated: "Our intellectual property is the training and fostering of our counselors, which makes for our unique environment. It’s much like a tech firm with designers who developed chips: You don’t want those people walking out the door. It’s the same for us."

Next time you’re up for a job, read the details if you’re required to complete an employment contract. Trouble is, with work still scarce in many fields, you might decide you need to sign on the dotted line anyway.

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