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Beacon Hill Charts Moderate Course

Posted on August 1, 2014

On a day when the Boston Globe reported that Massachusetts is “more liberal than you thought,” the Legislature ended its 2013-2014 session by steering a notably moderate course on business and economic issues.

Senate_ChamberLawmakers preserved the ability of employers to protect their intellectual property through the use of non-compete agreements; rejected a proposed version of the Uniform Trade Secrets Act that would have made defense of IP and trade secrets nearly impossible; and expanded the research and development tax credit in an effort to reverse a troubling 19.3 percent decline in R&D spending among Massachusetts employers between 2007 and 2011.

And though they extended a troubling solar-energy subsidy program, legislators also created a task force to study the long-term feasibility of such subsidies in Massachusetts. Associated Industries of Massachusetts will represent commercial and industrial ratepayers on that task force.

The flurry of last-minute activity capped a session that earlier saw long-term reform of the Unemployment Insurance system and an increase in the state minimum wage from $8 per hour to $11 per hour over three years. Taken together, the record reflects a Legislature seeking a prudent middle path to nurture an economy that remains fragile despite having recovered faster than the rest of the nation.

“Beacon Hill has developed a pretty sophisticated understanding of the need to create a predictable economic climate for the employers who create jobs and prosperity in Massachusetts,” said John Regan, Executive Vice President of Government Affairs.

“Employers did not get everything they wanted during this session ” most, for example, opposed increasing the minimum wage ” but lawmakers by and large shared the belief that only a vibrant, private-sector economy creates opportunity that binds the social, governmental, and economic foundations of our commonwealth.”

Legislators certainly listened on the issue of non-compete agreements.

The Patrick administration and a small group of well-heeled venture capitalists worked for more than a year to ban non-competes altogether, arguing that they inhibit the growth of new companies in the innovation economy. But the initiative created a backlash among the larger business community as hundreds of employers in sectors ranging from technology to manufacturing contacted members of the Legislature to underscore the importance of protecting the innovations that drive the Massachusetts economy.

Unlike last year’s repeal of the technology tax, when a unified coalition of employers persuaded legislators to change course, there was nothing approaching a consensus within the business community on non-competes.

“Speaker Robert DeLeo, Senate President Therese Murray and the Legislature deserve tremendous credit for recognizing that the current law governing non-compete agreements in Massachusetts is working just fine,” said Richard C. Lord, President and Chief Executive Officer of AIM.

There were other examples of economic prudence as well.

The Legislature declined to pass a workplace bullying bill that would have left employers open to litigation for taking corrective action against employees. Also left in the “no” pile was a bill that would have prevented employers from accessing the social-media logins of job candidates or employees. Legislators did pass a compromise worked out between AIM and domestic violence prevention advocates that would provide up to 15 days of leave to domestic violence victims who work for companies with 50 or more employees.

The future direction of the Legislature remains uncertain with the impending departures of several key lawmakers, including Senate President Murray, Senate Ways and Means Committee Chairman Stephen Brewer and Assistant House Minority Leader George Peterson Jr. Regan from AIM says all three exemplified the rare ability to reach consensus on thorny issues such as health care reform and gun control.

“AIM and the employer community will miss their determination to make Massachusetts a place where people with different opinions reach common ground on the best way forward. We look forward to their successors continuing that legacy and the moderate course the Legislature has charted,” Regan said.