An Update on Non-Competes in Massachusetts

On Tuesday, July 1, the MA Senate held a hearing on the status of non-compete employment contracts in the state. The vote came after Governor Patrick’s proposal this spring to ban noncompete agreements, which prevent workers who leave jobs from joining rival firms or launching new companies in the same industry, often for a year or longer. This past week, Governor Deval Patrick's organization has shown signs of a possible compromise on the issue, and indicated a willingness to accept a middle ground offered by Senator Brownsberger. The Senate voted strongly (32 - 7) in favor of placing limits on non-competes but not banning them outright. The vote will serve to limit the duration of noncompete agreements to six months and prohibit their use for hourly employees, which indicates some forward progress but doesn't address the issues the original ban was intended to address. Read the specific language of the compromise here.

MIT Sloan Professor Matt Marx testified, along with many others in academia and venture capital, to support a complete ban on non-competes. Having taken Prof. Marx's class, Dilemmas in Founding New Ventures, and read several cases on the subject, it's become an important determinant where we, and many of our classmates, choose to pursue not only our new business ideas but our careers after MIT Sloan. It's frustrating to see that the MA Senate might find a comprise suitable, as it fails to address many of the issues raised by non-competes. 

We strongly urge Sen. Canderas and Rep. Wagner to carefully consider the impact this legislation will have on our classmates, the broader Institute, and the young talent in the state of Massachusetts. We are fortunate to be classmates and colleagues with tremendously talented peers both at MIT and the dozens of other brilliant academic institutions in the Boston area alone. We see a mass migration of students to California each May, following graduation, and its a sad state of affairs when the MIT Club of North California is far larger than that in Boston. We hope the state does not settle for the proposed compromise and thinks about the broader impacts a full ban could have on the future of our state. 

As this issue unfolds, our leadership team and the broader MA student population, will be watching closely. We encourage everyone to attend our conference in December for opportunities to discuss this topic, as well as many others!

- Meltem Demirors