COMMENTS ON AN ARCANE POLICY — NON-COMPETE EMPLOYMENT AGREEMENTS

PERSPECTIVE FROM THE 19TH HOLE: This is the title I chose for my personal blog, which is meant to give me an outlet for one of my favorite crafts – writing – plus use an image from my favorite sport, golf. Out of college, my first job was as a reporter for the Daily Astorian in Astoria, Oregon, and I went on from there to practice writing in all of my professional positions, including as a Congressional press secretary in Washington, D.C., an Oregon state government manager in Salem and Portland, press secretary for Oregon’s last Republican governor (Vic Atiyeh), and a private sector lobbyist. This blog also allows me to link another favorite pastime – politics and the art of developing public policy – to what I write.

It may be a surprise to learn I know anything about what often is a very complicated policy subject – the use of non-compete employment agreements to make it more difficult for high-level employees of one company to jump to another.

But, I learned a lot about the policy several years ago when I represented the Oregon Association of Broadcasters (OAB) as its lobbyist at the Capitol in Salem.

All of this came to mind this week as I read a piece in the Wall Street Journal that contained these paragraphs:

“Quitting a job for a better offer is a time-tested method of securing a pay raise, improved working conditions or both.

“Now a national backlash is building against employers that make such movement harder with non-compete agreements that bar departing employees from taking jobs with industry competitors for certain periods of time. That’s good news for workers, because eliminating barriers to job-hopping could help stir the kind of wage growth workers haven’t seen since before the last recession.

“Employers have long used non-competes to protect company secrets and intellectual property, applying them primarily to high-earning professionals such as business executives, scientists and lawyers.”

Well, I don’t know about the “phrase” good news. Perhaps for some workers, but not for executives of major companies trying to protect their organizations’ future.

For broadcasters in Oregon – and me as the organization’s lobbyist –the issue arose in 2009 because the American Federation of Television and Radio Artists (AFTRA) – a union — came to the Capitol to oppose OAB non-compete agreements.

No one knew why AFTRA showed up because it was not usually involved in Salem, but the union got support from then-Oregon Senator Rick Metsger, a former TV broadcaster who almost was able to work his will on a bill to bar non-competes.

No one, including Metsger, seemed to care about the rationale for non-compete agreements as they had been negotiated by OAB member stations.

The OAB’s rationale was this: After television and radio stations had invested heavily in promoting top talent – including television anchors – they ought to be able to protect their investment by requiring the talent to stay around at the same station, at least for a period of five years.

This made eminent sense, given the investment.

But, to legislators, fueled by Metsger, it didn’t matter.

We almost lost the battle until we proposed the following language, which, in the 2009 legislative session, made into law in the form of an amendment to ORS 653.020. Sorry, this is pretty detailed language, but, then, so is the issue.

“(c) The employer has a protectable interest. As used in this paragraph, an employer has a protectable interest when the employee:

“(A) Has access to trade secrets, as that term is defined in ORS 646.461;

“(B) Has access to competitively sensitive confidential business or professional information that otherwise would not qualify as a trade secret, including product development plans, product launch plans, marketing strategy or sales plans; or

“(C) Is employed as an on-air talent by an employer in the business of broadcasting and the employer: (i) In the year preceding the termination of the employee′s employment, expended re-sources equal to or exceeding 10 percent of the employee′s annual salary to develop, improve, train or publicly promote the employee, provided that the resources expended by the employer were expended on media that the employer does not own or control; and

“(ii) Provides the employee, for the time the employee is restricted from working, the greater of compensation equal to at least 50 per cent of the employee′s annual gross base salary and commissions at the time of the employee′s termination or 50 per cent of the median family income for a four-person family, as determined by the United States Census Bureau for the most recent year available at the time of the employee′s termination.”

Fortunately, this language recognized the specific circumstances of broadcast executives who often made huge investments in on-air talent. Why lose the benefit of that investment?

Over Metsger’s opposition, the compromise passed, saving genuine non-compete agreements, though with several conditions as listed.

Given the Wall Street Journal coverage – and the passage of bills barring non-compete agreements around the country – watch for this issue to re-emerge in future legislative sessions here in Oregon.

Further, what this shows is that, even back in 2009, many Oregon legislators couldn’t care less about perspectives from business. Today, my sources at the Capitol, lobbyists with whom I worked before retirement, tell me things are still the same, if not worse.

Many legislators, not only won’t consider perspectives from business, they won’t even listen.

At some point, probably in the next recession, which is inevitable, those “don’t consider and don’t listen” perspectives will come back around to haunt Oregon, still a state that depends on personal and corporate tax revenue to survive.

So, legislators, I say listen and consider business perspectives.

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