Looking back at the failed non-compete bill

SHNS House Speaker Robert DeLeo said it was unfortunate legislation to limit non-compete agreements was not voted through this session.

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By State House News Service

Reiterating his support for the bill as it passed the House, Speaker Robert DeLeo on Tuesday said it was unfortunate that legislation to limit the use of non-compete agreements in Massachusetts did not reach Gov. Charlie Baker's desk.

A conference committee of six House and Senate lawmakers failed on Sunday to reach a deal on the non-compete bill, one of six major pieces of legislation Baker had identified as a priority for the end of legislative session.

"We felt very strongly, after spending hours discussing this with all parties, that all parties came together and supported the House legislation," DeLeo said during an interview on Boston Herald Radio. "Things changed, you know, in terms of what had happened in the Senate, and unfortunately, at the end of the day, we weren't able to get it done."

The two versions of the bill diverged in several key areas, including the permissible length of non-compete contracts. The Senate bill (S 2418) capped agreements at three months, while the House bill (H 4434) allowed one year. The Senate's "garden leave" provision required employers to pay an employee's full salary or a "mutually agreed upon consideration" of higher value during the restricted period, while the House called for a garden leave of half the salary or any mutually agreed upon consideration. Conferees said the detail that emerged as a sticking point was when to negotiate a worker's garden leave compensation.

DeLeo, who first mapped out plans for non-compete legislation before the Greater Boston Chamber of Commerce in March, has described the House bill as a compromise. It won the support of Gov. Charlie Baker and business groups including the Associated Industries of Massachusetts.

"We have to get legislation passed, and I look at it as my role as speaker -- and others may have different philosophies -- to see if we can get something that doesn't just grab a headline, but gets a bill passed," DeLeo said Tuesday. "And I felt the way to do this was to get all parties, and talk to both sides and see if there was some type of middle ground that they could both live with and support."

Baker, speaking to reporters on Monday, said he gave DeLeo "tremendous credit for pushing that one out and making it part of the final conversation, mostly through sheer force of personality."

The governor said any future attempts at non-compete legislation will need to position the state properly to deal with its vibrant technology and startup sector.

"I certainly don't want to do any harm," Baker said. "I mean, one of the things I heard from a number of law firms that advise startups and entrepreneurs was that some of the versions they saw kicking around around the non-compete issue would have led them to encourage their clients to go locate somewhere else. So whatever we do here, it needs to build on the tremendous success we've had developing an innovation economy and make it stronger."

On Sunday night, Senate President Stan Rosenberg said the Legislature would return to non-competes next session, citing "growing concern" around the issue. He said the differences between the House and Senate bills "became insurmountable in that conference committee."

"There were some differences of opinion that needed to be much more thoroughly vetted," Rosenberg said. "As one of the conferees said to me, this is a very, very complex area of policy and nuance is critical. You don't get nuance when you're rushing."