The dispute over whether to abolish employee noncompete contracts in Massachusetts yielded signs of a possible compromise Tuesday at the State House, with Governor Deval Patrick’s administration signaling a willingness to accept a middle ground and the Senate voting in favor of placing limits on the covenants but not banning them outright.
On the same day that a legislative committee held a hearing on the issue that included discussion of a compromise, the Senate voted to limit the duration of noncompete agreements to six months and prohibit their use for hourly employees.
The Senate voted 32-7 in favor of the compromise offered by Senator William Brownsberger. The vote came after 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.
The House previously opted against making changes to the use of noncompete clauses, meaning the issue could get settled during negotiations over the different versions of the economic development bill later this month. Some top lawmakers including House Speaker Robert DeLeo have said they are not convinced a total ban is appropriate.
Earlier on Wednesday, the Joint Committee on Economic Development and Emerging Technologies held the second State House hearing on noncompete agreements, and like at the initial hearing, a number of speakers argued that noncompete agreements stifle innovation and hurt small companies in Massachusetts. Others advocated for the status quo — an outcome favored by some larger companies for retaining talent and protecting intellectual property.
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