Massachusetts Moves to Eliminate Non-Competition Agreements.Massachusetts is on the move to eliminate non-competition agreements. Non-competition agreements are used by employers supposedly to prevent competition from former employees who might use information gained during employment. The purpose of a non-competition agreement is to prevent unfair competition. More often, it prevents the former employee from earning a living. In Ohio, courts have the power to rewrite such agreements. The general rule in Ohio is that an agreement that prevents former employee competition for two years within a reasonable geographic area will be upheld.
Massachusetts Governor Deval Patrick has submitted legislation to get rid of non-compete agreements in favor of adoption of the Uniform Trade Secrets Act (UTSA). In essence, the UTSA forbids former employees use of information developed by a company that is unavailable to other companies. Classic examples of a trade secret include the Coca-Cola formula and Colonel Sanders' secret herbs and spices. Allowing employees with access to such trade secrets to leave the company, set up shop and use the secret is and should be unlawful. But when it comes to things such as a customer list that can be duplicated by searching for customers on the internet or a business-to-business phone book, the the non-compete restriction tends to prevent legitimate competition.
It's about time for other states to take the same action as Governor Patrick has in Massachusetts.