Like any fast-growing tech company, Onshape is aggressively competing to recruit the best of the best. We’re not only hiring the most talented and accomplished professionals in the CAD industry, but we’re also building a “Dream Team” of innovators in the web, mobile and cloud space as well.
But there’s a problem – one we share with all our competitors.
Some of the elite personnel we’d love to recruit next are legally forbidden to work for us. As a condition of prior employment, they’ve signed mandatory non-compete agreements preventing them from taking another job in the same industry for a year or longer.
If you’re completely euphoric about your current job and future prospects, signing a non-compete doesn’t seem like much of a sacrifice. But if you are seeking new challenges, better pay or benefits, or desperately need to leave a toxic workplace, that seemingly innocuous agreement can quickly become a pair of handcuffs. Being freed involves choosing between options that for many are untenable: Either give up your salary for a year (or more!) or take another job that diverts you far from your career goals.
Onshape’s leadership team and Board of Directors recently agreed to unilaterally get rid of non-compete agreements for everyone at the company except for the founders and executive team. It’s a bold move, essentially saying to our competitors, “We don’t need an artificial mechanism to keep our best employees here. They WANT to be here.”
Today at the Massachusetts Statehouse, Onshape CFO Dan Shore is scheduled to testify on a bill (SD809 & HD2332) that would ban non-compete agreements statewide for workers in every industry. Currently, the only states that outlaw non-competes are California, Oklahoma and North Dakota.
Sponsored by state Sen. Will Brownsberger (D-Belmont) and Rep. Lori Ehrlich (D-Marblehead), “An act relative to the judicial enforcement of non-competition agreements” would forbid any oral or written agreement that “prohibits, impairs, restrains, restricts, or places any condition on a person’s ability to seek, engage in, or accept any type of employment” after a job ends.
Shore, who previously was the CFO of Harvard University before joining Onshape, will be testifying before the Joint Committee on Labor and Workforce Development. In a letter submitted to the legislature last week, Shore asserts that Massachusetts companies will have a better chance to hire their top prospects if non-competes disappear altogether.
“While Northern California is merely one of many regions with whom we compete for talent, it is worth noting California’s restrictions on most non-compete provisions – which help distinguish Northern California as a ‘safer’ place to pursue their careers. We can safely assume that California-based companies are using this as a recruiting tool in head-to-head situations. It is in our collective best interests to prevent our most talented employees from voting with their feet.”
Beyond the wider economic benefits, he also suggests that eliminating non-competes is a critical gesture of trust between a company and its employees.
“Non-compete provisions constitute a not-so-subtle red flag for employees, communicating something along the lines of: ‘We trust that you share our values, and that we can deliver on what you are seeking from us... but just in case, we are going to insert a whole lot of friction between you and your next opportunity so that you always will have ample incentive to stay.’ Sure, these provisions may help protect a company’s intellectual property, but at a steep cost – by using employees as hostages to manage competitive risks that can be managed in other ways.”
Shore, noting his own recent career change, says it’s pragmatic for bosses to realize that even happy, talented and productive employees may choose to move on for personal reasons. “We want the kind of trust-based relationships with our staff that would allow us to celebrate those moments, rather than inhibit them,” he says.
Other bill supporters expected to testify on Beacon Hill today include Boston companies (Acquia, RunKeeper, Vertex Pharmaceuticals); startup incubators (Cambridge Innovation Center - CIC); entrepreneurs (Rich Miner, co-founder of Android); and the New England Venture Capital Association.
To read Dan Shore’s full letter to the Joint Committee on Labor and Workforce Development, click here.