Noncompetes hurt workers and their employers
As a CEO, I have no desire to hold my employees hostage.
But that’s standard practice at most Massachusetts companies — especially in the highly competitive technology sector. If you’re a skilled, in-demand worker, your salary and benefits probably came with a figurative pair of handcuffs. Many jobs require signing a noncompete agreement, a legal contract that forbids you from working for another company in your industry for up to a year after you leave.
Freedom of movement is a fundamental human right. None of us would tolerate limitations on where we choose to travel or live, yet there is passive acceptance of restricting where we can work. Noncompete agreements create a domino effect: When one person is blocked from furthering their career, another is denied a possible job opening.
That’s why my company, Onshape, is getting rid of noncompete agreements. With the exception of our founding team, every current employee and new hire is free to leave tomorrow and join a competitor. We want people who want to be here, not ones who feel trapped. Onshape is following the path of Massachusetts tech industry leaders like Acquia and RunKeeper, which both voluntarily banished noncompetes last year.
Onshape is a fast-growing tech company backed by $64 million in venture capital. Our workforce has almost doubled over the past year to 70. We’ve been contacted by many talented people we’d like to hire but who are restricted by noncompete agreements. After they endure their waiting period, it would feel hypocritical to then ask them to sign the same kind of draconian agreement at my company.
Unless you’re independently wealthy and can crash on your couch for a year, switching jobs under the shackles of a noncompete means taking work outside your area of expertise. In the words of Boston venture capitalist Sean Dalton, a general partner at Highland Capital Partners, a year in the world of entrepreneurship and startups is a “lifetime.”
“It would be like telling Patriots All-Pro defensive back Darrelle Revis, ‘Welcome to New England! But there’s just one catch,’ ” Dalton testified at a Beacon Hill hearing last year on noncompetes. “If you want to play cornerback for us, you either need to sit out a couple of years or play for the Bruins.”
Revis, of course, abandoned the Pats for the better-paying New York Jets. NFL free agents aren’t bound by noncompetes, but you’d be shocked to learn some of the professions that are: fast food workers, hairstylists, pet sitters, yoga instructors, and even camp counselors.
The most infamous noncompete agreement belongs to the Jimmy John’s sandwich shop chain, which requires employees to wait two years before bringing their sandwich-making expertise to Subway or Papa Gino’s. Sparked by such nonsense, US senators Al Franken and Chris Murphy recently filed the Mobility and Opportunity for Vulnerable Employees Act, which would ban noncompete clauses for workers earning less than $15 an hour.
That’s progress, but noncompetes should go away altogether. Whether they’re making sandwiches or computer chips, Americans deserve the right to decide where they spend the bulk of their waking hours. Silicon Valley, our region’s chief rival for attracting technology talent, retains a strategic recruiting advantage over us -- noncompetes are illegal in California.
Former Governor Deval Patrick tried to eliminate all noncompetes in Massachusetts before he left office. His bill fizzled, but a compromise version was passed by the state Senate before dying in the House. Now a similar law is under consideration by the Legislature, which held a public hearing last week. It’s time for lawmakers and Governor Charlie Baker to do the right thing.
When bosses no longer have the power to force their employees to stay, they are forced to make salaries, benefits, and workplace culture more attractive. They are forced to listen to their employees’ needs and wishes. Companies win by hiring the most talented people available in a free and open marketplace. And customers benefit from the contributions those prized employees make to their company’s products, whether it be a sports car or a breakthrough medical cure.
Businesses are only as good as their workers. Neither employer nor employee should have to settle for a second, third, or fourth choice.
John McEleney is chief executive of Cambridge-based Onshape.