Non-Compete Clause in Proposed Washington Legislation Sparks Techie Twitter War

Two prominent Seattle tech leaders had a heated Twitter exchange about bills that would restrict — and in some cases ban — non-compete clauses from employee agreements.

by Rachel Lerman, The Seattle Times / February 3, 2016

(TNS) — Issues discussed at the state Legislature don’t always stay at the state Legislature.

Two prominent Seattle tech leaders had a heated conversation Tuesday on Twitter about proposed bills that would restrict, and in some cases ban, non-compete clauses from employee agreements.

A bill proposed by Rep. Derek Stanford, D-Bothell, would make the provisions unenforceable in the state.

Another, proposed by Rep. Matt Manweller, R-Ellensburg, would start by banning the provisions for hair- and nail-salon employees and a few other employees and add different industries over time.

The issue, though it may start with the service industry, has particular impact in the technology industry. Non-competes are standard fare across the state’s tech giants.

The WTIA, the Association of Washington Business and a few other business groups testified against the bills in Olympia on Monday, according to Geekwire.

Businesses and the associations that support them say non-competes are essential for keeping companies’ secrets and intellectual property safe from competitors. Supporters of non-compete clauses say Washington’s tech industry is growing well and the current non-compete laws have not caused problems.

But others think they are holding the region back from becoming a bigger technology powerhouse.

Chris DeVore, managing director of Techstars and co-founder of Founders Co-op, has said that he believes non-competes stifle innovation. The logic is that employees are less likely to leave big companies and start their own ventures if they are afraid of getting sued.

Those in favor of banning non-competes have used California’s laws as an example — state public policy there generally does not allow the clauses, and Silicon Valley’s tech industry is booming.

DeVore and WTIA CEO Michael Schutzler, who also has served as executive of several companies around the area, got into the issue on Twitter Tuesday morning in a conversation that involved DeVore’s asking for evidence of the benefits of non-compete policies; Schutzler defended them.

The conversation ended with a healthy amount of snark. Here’s the full back-and-forth:

. "We absolutely must ask ourselves how to keep the old incumbent companies from holding back progress"

— Chris DeVore (@crashdev)

Chris – a mountain of evidence that says you're wrong. Stanford bill is solution seeking a problem.

 

— Michael Schutzler (@CEOsherpa)

I’ll put my evidence against your corporate backers’ any day, how’s this for a start:

— Chris DeVore (@crashdev)

We will have to agree to disagree. Evidence says ICT not hampered by current laws.

— Michael Schutzler (@CEOsherpa)

Please cite actual “evidence”, not claims of such

— Chris DeVore (@crashdev)

I have 30+ years experience on this. You don't. ICT is not Jimmy Johns.

— Michael Schutzler (@CEOsherpa)

Ooh. Yours is bigger, huh? Pretty happy to go toe-to-toe on what makes entrepreneurial ecosystems function

— Chris DeVore (@crashdev)

You're the one claiming there is a problem in WA. Where's the beef?

— Michael Schutzler (@CEOsherpa)

Still waiting for that “evidence”, I offered a pretty widely-cited piece from a well-regarded foundation, whatcha got?

— Chris DeVore (@crashdev)

That study is (a) old and (b) about Boston and (c) the inverse of your proof. Where is WA evidence?

— Michael Schutzler (@CEOsherpa)

Of course, “more study is needed” is the incumbent’s favorite dodge; why is the most innovative state in the US? More study!

— Chris DeVore (@crashdev)

Which companies did you serve as CEO? How much capital did you raise? How many engineers did you hire?

— Michael Schutzler (@CEOsherpa)

Ooh, that’s a big one you’ve got there! How many entrepreneurs have you helped when your name wasn’t on the door or cap table?

— Chris DeVore (@crashdev)

22 companies with my own money. Another 100+ as advisor and mentor.

— Michael Schutzler (@CEOsherpa)

You are myopic. Apparently on non-competes and active angels. I'm at with 9mile labs. Good luck at TS.

— Michael Schutzler (@CEOsherpa)

Thanks for the name-calling, that definitely elevates the debate. Glad to know 9Mile has such a strong supporter in you.

— Chris DeVore (@crashdev)

©2016 The Seattle Times,Distributed by Tribune Content Agency, LLC.