Colette Buser couldn’t understand why a summer camp withdrew its offer for her to work there this year.After all, the 19-year-old college student had worked as a counselor the three previous summers at a nearby Linx-branded camp in Wellesley, Mass. But the company balked at hiring her because it feared that Linx would sue to enforce a noncompete clause tucked into Ms. Buser’s 2013 summer employment contract. Her father, Cimarron Buser, testified before Massachusetts state lawmakers last month that his daughter had no idea that she had agreed to such restrictions, which in this case forbade her for one year from working at a competing camp within 10 miles of any of Linx’s more than 30 locations in Wellesley and neighboring Natick. “This was the type of example you could hardly believe,” Mr. Buser (pronounced BOO-ser) said in an interview.
Noncompete clauses are now appearing in far-ranging fields beyond the worlds of technology, sales and corporations with tightly held secrets, where the curbs have traditionally been used. From event planners to chefs to investment fund managers to yoga instructors, employees are increasingly required to sign agreements that prohibit them from working for a company’s rivals.
There are plenty of other examples of these restrictions popping up in new job categories: One Massachusetts man whose job largely involved spraying pesticides on lawns had to sign a two-year noncompete agreement. A textbook editor was required to sign a six-month pact.
A Boston University graduate was asked to sign a one-year noncompete pledge for an entry-level social media job at a marketing firm, while a college junior who took a summer internship at an electronics firm agreed to a yearlong ban.
“There has been a definite, significant rise in the use of noncompetes, and not only for high tech, not only for high-skilled knowledge positions,” said Orly Lobel, a professor at the University of San Diego School of Law, who wrote a recent book on noncompetes. “Talent Wants to be Free.” “They’ve become pervasive and standard in many service industries,” Ms. Lobel added. (...)
“Noncompetes are a dampener on innovation and economic development,” said Paul Maeder, co-founder and general partner of Highland Capital Partners, a venture capital firm with offices in both Boston and Silicon Valley. “They result in a lot of stillbirths of entrepreneurship — someone who wants to start a company, but can’t because of a noncompete.”
Backers of noncompetes counter that they help spur the state’s economy and competitiveness by encouraging companies to invest heavily in their workers. Noncompetes are also needed, supporters say, to prevent workers from walking off with valuable code, customer lists, trade secrets or expensive training.
Joe Kahn, Linx’s owner and founder, defended the noncompete that his company uses. “Our intellectual property is the training and fostering of our counselors, which makes for our unique environment,” he said. “It’s much like a tech firm with designers who developed chips: You don’t want those people walking out the door. It’s the same for us.” He called the restriction — no competing camps within 10 miles — very reasonable.
“The ban to noncompetes is legislation in search of an issue,” said Christopher P. Geehern, an executive vice president of Associated Industries of Massachusetts, a trade group leading the fight to defeat the proposed restrictions. “They’re used in almost every sector of the economy to the seemingly mutual satisfaction of employers and individuals.”
The legislative fight here pits two powerful groups against each other: venture capitalists opposing noncompetes and many manufacturers and tech companies eager to preserve them.
