Any economic development legislation worthy of the name should help clear away barriers that keep workers from seeking better opportunities and discourage the emergence of new businesses. Unlike the economic development bill that came out of the House, the Senate’s stronger legislation tackles both the noncompete clauses that hamper the state’s high-tech economy and the byzantine liquor license rules that discourage restaurateurs. The Senate bill does not comprehensively solve either problem, but it includes valuable reforms.
Noncompete clauses prohibit a company’s employees from working for a competitor for a specified period of time; Silicon Valley’s labor market is more fluid than Boston’s because California doesn’t enforce noncompetes. It’s fair to require employees not to disclose confidential information. It’s another matter to strip employees, including relatively modest earners such as camp counselors, of work opportunities in their specialized fields. In emerging fields such as information technology, Bay State workers openly chafe at noncompete clauses — under which workers who quit or are fired from one firm end up going without work, switching fields, or even leaving the state entirely. Senator Will Brownsberger of Belmont has accurately described such restrictions as a “dead-weight drag on our struggling economy.”
The Senate stopped short of an outright ban, but it did address some of the most egregious situations: It would bar the use of noncompete agreements for hourly workers and short-term employees. Significantly, it also requires employers to divulge the agreements in advance and provide ample opportunity for prospective employees to review the terms. That demonstrates to employers that placing restrictions on employees’ freedom of movement is not a good recruitment tool.
The Senate bill also surpasses the House version by eliminating the cap on liquor licenses in nearly all communities statewide and making it possible for bars and restaurants along MBTA routes to extend hours of operation. Finally, municipalities would no longer be required to petition the Legislature for new liquor licenses. Boston would still remain under significant state control. But the bill pushes in the right direction by transferring the power to appoint Boston’s licensing board from the governor to the mayor. The Senate’s addition of 150 nontransferable liquor licenses in Boston would also open up opportunities in commercially barren sections of the city, such as Roxbury and Mattapan.
Both the House and Senate bills focus on training for new industries. But as a conference committee seeks to hammer out compromise legislation, members should also recognize that economic development also means eliminating barriers that hold individual workers and entrepreneurs back — including the barriers presented by noncompete clauses and outmoded liquor laws.