What I Wish Our Governor Had Said?

z(and hope that he will steal this doc... he talks better than I do anyhow... :) )

Idaho’s Noncompete Law Squeaks Through: What’s Next?

And What Do I Wish the Governor Had Said?

Idaho had received a hail of bad press[i] for a recent law that made it all too easy to enforce non-compete agreements, placing the burden of proof on employees (prove a negative? Yikes!) In response to this and to a letter[ii] signed by over 100 tech execs & entrepreneurs, the 2018 Idaho Legislature brought a bill that rolled things back to essentially the prior status quo. Not far enough. (There is exactly zero[iii] evidence that noncompetes are a positive. Even for those using them!) But it’s a start.

The bill’s language was formulated by backroom negotiations among the Important People (who did not testify, as noted by multiple House members) and the bill’s sponsors made it clear that any amendments to the bill would unravel the compromise, so please don’t meddle. However, the bill did pass easily and went to the Governor’s office. Pop the champagne? Uh….

We suddenly learn that the Governor was being pressed hard by Very Important People to veto the bill. Was this the plan all along? Sigh. We did manage a barrage of emails urging the Governor to sign the bill. (Thank you, Jeff Sayer!) At the end, Butch didn’t veto it, just let it become law without his signature. Make no mistake: This IS a win.

His transmittal letter scolded the legislature rather oddly by asserting that there was no consensus in (a) the business community or (b) the tech community. Of course, there’s no consensus between the people who want to impose great restrictions on employees and those who know it’s a horribly bad idea. Why would he think that? However, in the tech/entrep world, I heard exactly one voice who opposed the rollback –and she’d had a closeup view of the horrific employee theft that triggered the expansion of noncompetes. (Neither that bill nor the new one would have saved that ripped-off entrepreneur, alas.)

If the tech/entrepreneur community was responding so vigorously against noncompetes, then who the hell was telling the Governor that the tech community was ok with them? Who was/were the Very Important Person(s) who chose to speak on our behalf… and for our own good, I’m sure. ;)

On the other hand... doesn't this speak to the community stepping and taking the lead? We are seeing signs of that (keep an eye out for Mark Kaczor at INLand Zach Hanna & DJ Ramirez with the Boise edition of Nick Smoot's Innovation Collective and, well, a few more things lurking just beneath the surface!)

Would you mind if I fantasized how I wish Governor Otter had responded? I think he missed a HUGE opportunity to show the tech/innovation/entrepreneurial community that he gets it[iv] and is willing to go to bat for us. Imagine, if you will, this transmittal letter (or better yet, imagine this as a speech, Governor Otter at his most eloquent, engaging style!)

In Re Senate Bill S1287aa

Governor Clement “Butch” Otter

“Idaho is a great small business state. We’re not a great entrepreneurial state... yet. We’re not a great innovation state… yet. It’s high time we talked about that.

Hello, everyone. I appreciate the Legislature’s long, hard work this session. Things are never perfect but we did make some progress. Some bills, however, are needlessly imperfect. Let me share my concerns with one in particular.

Senate bill S1287 was presented as a response to demands that a prior bill had gone too far in making it easy for employers to enforce non-compete covenants on employees. But did the Legislature forge a good response? Let me share three major concerns I have with this bill. The good news is that this situation has implications for how I… how we can act effectively and swiftly. And just maybe there’s an elegant immediate solution, I’ll get to that at the end. First, though, my three big concerns.

Concern #1: It’s hardly news when the language of a bill gets thrashed out among competing interests, especially those who are used to getting their way ;) It does give me pause when that process is opaque. The negotiators didn’t testify and the bill’s sponsors were visibly concerned that if the legislature amended the bill, the compromise would collapse. However, that is far from uncommon. Sadly, nor is it uncommon for the compromisers turn around and ask me to veto.

What did really disturb me was that negotiations, whether private or public, should be grounded in fact. Policy facts, not policy opinions. It’s ok to fight for your constituents but at some point, shouldn’t we ask “Does this make factual sense? Does this work?” It is crystal clear that the legislature failed on this count. Policy expertise was visibly absent from the negotiations. Idaho policies must be fact-driven, evidence-based.

Implications for Action? We need to start talking about policy issues on how to make Idaho more innovative and more entrepreneurial, more competitive. I hereby call for [name redacted [v]] to create a team to brief Idaho on the state of the art of policy issues for new and small business. How DO we best grow entrepreneurship and innovation? Bring together policy expertise, not policy opinions. Even expertise from beyond Idaho. It is insane to hear Idaho leaders saying that we have nothing to learn from elsewhere (except maybe if they’re the “right” people? <insert audible sigh> )

Concern #2: Compounding the problem, it’s obvious to me that the grassroots entrepreneurs, techies, and small business owners were not being heard. You should have read the emails that were sent in support of the bill, ranging from Cradlepoint’s George Mulhern to passionate, articulate young entrepreneurs like Leif Elgethun & Francois Justice-Durham. (Yes, I do read my emails. Best part of my day.)

Implications for Action? This issue makes it clear that we also need to hear the voice of the innovators and entrepreneurs themselves, not the people who claim to speak for them. I will ask the team to begin listening sessions across Idaho. We have great role models on doing this and they have already expressed an enthusiastic interest in helping us. Let’s get busy. Now.

Concern #3: Are we even asking the right question? If you read the NY Times article, the real issue was that too many Idaho businesses feel they can’t compete to keep their employees, they simply can’t afford them. I hear on a daily basis how we have workforce deficits and yet when firms like Boise startup Vynyl pay market wages, they have zero trouble finding excellent people.

Implications for Action? Maybe we need to think that this isn’t a workforce problem, but a business model problem, a competitiveness problem. One study showed that if Idaho employers paid market wages, we’d have few shortages. So the real problem is… how do we help Idaho businesses to be more competitive? Small or large, new or old, high-tech or low-tech, for-profit or non-profit, urban or rural, how do help them to become more competitive?

To bring this full circle, what’s a great way to reduce the competitiveness of an industry or community? Restrict employee mobility. Let that irony sink in.

Meanwhile, how about something that we can do right now that doesn’t involve legislation. One thing I’m so proud of is how Idaho entrepreneurs are changing how we do business. Yes, we have tech success stories like BlackBox VR who stole the show at CES (and so many others) but I am even prouder to see Pete Gombert’s GoodWell and what Russ Stoddard is doing. What’s more Idaho than using market forces, consumer dollars to nudge businesses into being more responsible and sustainable?

In this spirit, a local entrepreneurship guru[vi] shared a great idea from Jon Cardella with Boise venture Ventive. Jon said something to the effect of “To heck with laws, why don’t we all just take the pledge? We just raise our right hand and vow to never misuse[vii] noncompetes, NDAs, etc.”

OK, I’m in. On Friday, 11 am in the State Capitol, I cordially invite the legislators and my cabinet to the first invocation of this pledge. I will lead the entrepreneurs and small business owners in that pledge. Symbolic? Of course. But it sends a message across the state and to other states[viii] who are still squabbling over this issue with little success. Great entrepreneurs know we’re all in this together.

See you Friday. (We might even start the policy discussions.)

p.s. Do you know what “ESTO” means in Esto Perpetua? Entrepreneurial, Small business & Tech Opportunities!

Esto Perpetua,

Clement “Butch” Otter

Governor, the great state of Idaho"

[again, this is me, fantasizing about what he might have said... and if he wants to steal this, I'm an open innovation guy ;) ]

[i] https://www.nytimes.com/2017/07/14/business/economy/boise-idaho-noncompete-law.html

[ii] https://www.spokesman.com/blogs/boise/2017/dec/13/100-idaho-business-leaders-urge-repeal-controversial-2016-non-compete-law/ 

[iii] https://www.slideshare.net/norriskrueger/idaho-senate-bill-s-1287aa

[iv] He does get it, more than we give him credit. He just hasn’t acted, though there’s so much he could do.

[v] Guess who? ;) seriously, this can’t be about me…

[vi] Ditto ;)

[vii] Note the word “misuse”

[viii] Heh, heh… like Washington state!