In Massachusetts, we are home to some of the most transformative industries in the world. Leading companies in consumer technology, robotics, healthcare, biotechnology, and so many more have chosen to start here and thrive here.
That’s not by accident. Much of our success is thanks to the incredibly talented people we have in this state, and the parents and schools that teach them. We also have taken concrete steps to establish a fair, supportive atmosphere for innovative companies to succeed. This has meant more jobs, more innovation, and a strong economy.
That’s the good news.
The bad news is that if we don’t continue to adapt and change, we risk falling behind. Other states and nations are constantly looking for ways to establish themselves as a better option for that next great company, that next transformative industry.
The unfortunate reality is that in some areas, we are already behind. As markets have grown and outpaced the ways in which we regulate them, we have been too slow to adapt.
That’s why I have introduced legislation to address two core components of our innovation economy – our outdated non-compete law and our trade secrets law.
Most people are probably not familiar with non-compete agreements, at least until they are hired by an employer who requires one. Non-competes restrict where someone can work after leaving their job. There is little question that non-competes are unfair to workers and considerable evidence that they stifle innovation.
At a legislative hearing on my bill, we heard testimony from a man who has been at the same job for 29 years, largely because if he left, he wouldn’t be able to get a job in his field due to the strict non-compete agreement he signed nearly 30 years ago.
States that restrict non-competes have seen positive results in the number of patents issued, the number of start-ups, and jobs created. California took the significant step of eliminating non-competes, and it has become a major draw for entrepreneurs and new companies to start and grow there.
Whether you are an employee who may be subject to a non-compete, or just a resident of Massachusetts who benefits from increased jobs and innovation, we should all be concerned with the impact of non-compete agreements in our state. My bill would put us on par with California and Silicon Valley.
My bill also addresses another little known law that has a significant impact on innovation – our trade secrets act.
The trade secrets law is designed to protect the intellectual property of companies. Unfortunately, the current law allows Massachusetts companies to use our legal system as a battering ram – filing overly broad suits against competitors without having to prove what property was stolen with specificity. This grinds innovation to a halt, clogs our legal system, and sends a negative signal to businesses looking to put down roots in our state.
At the same legislative hearing, we heard from a local firm developing lifesaving therapies for children and adults with rare diseases. Recently, they have been subject to a trade secret lawsuit by a competitor that has held up the development of an important drug for which many families are praying.
The fact is we have fallen behind almost every other state on this issue. Massachusetts is only one of two states in the country that has not updated its trade secrets law since the invention of the Internet. That is unacceptable. Innovation should be encouraged by our laws, not hindered by them.
In the innovation economy, we are either stepping forward, or falling behind. These common sense updates to our non-compete and trade secrets laws will keep us on that forward path. We must act, and act now. If we do, it will be good news for our innovative companies, for our ability to produce transformative technologies and treatments, and for all of us who benefit from them.