Some common sense on noncompete clauses

Innovation Economy

July 03, 2011|By Scott Kirsner, Globe Correspondent

Logan Benson landed a pretty sweet job in early 2009: testing video game software at Harmonix Music Systems, the Cambridge company that developed Rock Band and Dance Central. Thinking there would be opportunities for promotion, he took a pay cut to work there.

But in December of that year, Benson, then 26, was laid off. Within a few weeks, he was in the running for an associate producer job at Seven45 Studios, a Boston video game company that was, like Harmonix, working on music-related video games. “It was the kind of job that felt like it would have advanced my career,’’ Benson says.

But executives at Harmonix blocked Benson from taking the new job. When he was hired at Harmonix, he’d signed a contract called a noncompete agreement, promising not to work for a rival company for a year. Harmonix wouldn’t nullify it. Benson kept looking, unsuccessfully, for another job with a local video game company. On the verge of filing for unemployment benefits, he took a job with a former employer, Boston University.

That is no way to build a cluster of video game companies in Massachusetts, and it is no way to grow an innovation-driven state economy in the insanely competitive 21st century.

On a weekend when we celebrate American independence - and all of the blood and sweat that gave us the right to life, liberty, and the pursuit of happiness - I think it’s time for a declaration of a different sort. It is talented, smart, and driven people who make Massachusetts one of the most innovative places on earth. Our residents ought to be able to take their skills where they want and start companies when they want. Dissolving the bonds of noncompete agreements in our state would not only help employees like Benson contribute to the industry they choose, it would also help start-ups grow, and it would prod our more established companies to be more competitive.

Some employees think signing a noncompete agreement is a harmless act. But it’s not tough to find examples where signing a noncompete agreement can derail an individual’s career, leading to threats, lawsuits, and problems finding future employment.

Bob Balaban of Lexington took a software engineering job in 2008 that required him to sign a two-year noncompete agreement. During the recession of 2009, he was laid off. Balaban had several interviews with managers at a prospective employer, but it had a business unit that competed with his old employer. “They informed me that their legal department advised them against hiring me because of that,’’ Balaban said. He was forced to scramble for consulting projects to pay his mortgage.

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