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Total Articles: 8

Groundhog Day for Massachusetts Non-Compete Reform

Once again, the Massachusetts legislature was unable to agree on non-compete reform legislation by the July 31, 2016, end of the current legislative session. The House and Senate had passed versions of non-compete reform that differed on key provisions. At the end of the session, however, the House and Senate failed to pass a compromise bill.

Non-Competes to Stay in Massachusetts...For Now

This morning, Massachusetts woke up to what is becoming a regular occurrence: the legislature was unable to pass a bill limiting the use of non-competition agreements in the Commonwealth, although it came the closest it has in years. On June 29, 2016, the House unanimously passed a bill that would have drastically changed the landscape for non-competes in Massachusetts. Weeks later, on July 14, the Senate passed its own bill, but with several significant differences. The House rejected the Senate bill, and on July 18, the bill went to conference.

Massachusetts Noncompete Bill Advances, but Passage Remains Uncertain

In March, we reported that Massachusetts House Speaker Robert A. DeLeo had announced his support for legislative restrictions on employee noncompetition agreements, signaling a potential turning point in the long-running debate in Massachusetts over whether noncompetes should be banned or restricted through legislation.

Renewed Life for Potential Legislative Restrictions on Noncompetition Agreements in Massachusetts?

On March 2, 2016, Massachusetts House Speaker Robert A. DeLeo announced that he supported legislative restrictions on employee noncompetition agreements. Speaker DeLeo’s statements, made in a speech to the Greater Boston Chamber of Commerce, may be a turning point in the long-running debate in Massachusetts over whether noncompetes should be banned or restricted through legislation.

Massachusetts Legislature Fails to Pass Bill to Ban Noncompetes and Adopt the UTSA

Employers in the Commonwealth of Massachusetts can breathe a sigh of relief now that the Massachusetts legislature has rejected a bill to ban noncompetition agreements. The effort to outlaw noncompetes in the Commonwealth has been underway since 2009, and numerous bills to reform noncompete and trade secret law have been proposed and rejected since that time. However, earlier this year, Massachusetts Governor Deval Patrick joined in the effort to outlaw noncompetes and reform Massachusetts trade secret law, garnering more support for the effort than it had ever received. In April, the governor proposed a bill to ban noncompetition agreements in the Commonwealth. The bill also proposed that Massachusetts adopt the federal Uniform Trade Secrets Act (UTSA). Massachusetts is one of the few remaining states that has not adopted the UTSA. Despite the support of the governor and many legislators, even a watered-down version of the bill failed to pass in the most recent legislative session, which ended on July 31, 2014.

Massachusetts Governor Wants to Ban Non-Compete Agreements and Enact the Uniform Trade Secrets Act

Massachusetts Governor, Deval Patrick, recently announced a bill—An Act to Promote Growth and Opportunity—that would provide workforce training opportunities and promote economic development incentives across the Commonwealth. As part of his economic development package, the Governor proposes to enact the Uniform Trade Secrets Act, but at the same time eliminate traditional non-competition agreements.

First Circuit Holds Massachusetts Salesman Violated Nonsolicitation Covenant, Even Though Customer Made “Initial Contact”

On September 23, 2013, the First Circuit Court of Appeals, applying Massachusetts law, upheld a preliminary injunction in a nonsolicitation covenant case, and discussed the often-murky line between “soliciting” and “accepting business” from a former customer. The court affirmed the district court’s preliminary finding that the employer was likely to succeed in establishing that its former salesman and his new employer crossed that line in breach of his non-solicitation covenant. The First Circuit held that, although there was no authoritative Massachusetts law on this topic, the Massachusetts courts would likely find that there should be no per se rule that a customer’s initial contact with the former employee foreclosed a finding of solicitation—particularly when, as is often the case, that customer was prompted to contact the employee by a targeted announcement of the salesman’s new affiliation. Corporate Technologies, Inc. v. Harnett, No. 13-1706 (1st Cir. Sep. 23, 2013).

New Massachusetts Non-Compete Legislation Introduced

A few weeks ago, we outlined the Top 5 Non-Compete Issues to Watch For In 2011. Among our top five, we noted that non-compete legislation stalled in the Massachusetts Legislature in 2010, and we forecasted that new and modified legislation would be introduced in 2011. Sure enough, a new bill was recently introduced. It contains numerous changes from the prior legislation, and it addresses issues ranging from consideration to garden leave to inevitable disclosure. An excellent summary of the proposed legislation along with a description of the changes from last year's bill is available on Russell Beck's blog at FairCompetitionLaw.com.