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Should Non-Compete Agreements Include a Partial Salary?

Are you bound by a non-compete agreement? If so, you're among nearly one-fifth of the U.S. workforce.

A recent White House report, meanwhile, estimates 37% of U.S. employees will be asked to sign a non-compete agreement at some point in their careers.

We tend to think that only well-compensated, "knowledge economy" employees are subject to non-compete agreements, but employees in all walks of work life can be asked to sign a non-compete agreement these days. The White House report finds 15% of employees without a college degree are currently subject to non-compete agreements, as well as 14% of employees earning less than $40,000 a year. Fast-food employees, warehouse workers, and camp counselors have also encountered non-compete agreements.

A few states have passed legislation to restrict the terms of non-competes placed on employees. Hawaii has banned non-compete agreements for technology workers. California, meanwhile, has essentially rendered non-compete agreements unenforceable.

Non-competes are accompanied by many questions. Instead of reading a boring article written by a lawyer, let's listen to a cool song written by someone who sounds like a lawyer.

Now Massachusetts will consider changing the terms of the average non-compete agreement, according to an article in Computerworld. A bill before state lawmakers would limit non-competes in Massachusetts to one year only. Massachusetts employers wouldn't be able to ask employees in low-wage positions, or employees who were terminated without cause, to sign a non-compete agreement, either.

But the bill doesn't stop there: Massachusetts employers would have to pay at least 50% of the former employee's salary during the year the non-compete is in effect. Opponents of the bill worry that this "garden leave" provision could have a big impact in tech-heavy Massachusetts.

On the other hand, employees bound by non-compete agreements can see a big impact on their career and earnings prospects. They're bound, unpaid, under an agreement.

So, what have we learned, other than it's not a good idea to give a guitar to a lawyer? Will Massachusetts join the list of states that have made the average non-compete agreement a little bit more employee-friendly? Stay tuned.


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