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Volume X, Number 194

July 10, 2020

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July 09, 2020

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Massachusetts Once Again Is Considering Enacting Comprehensive Noncompete Legislation

For nearly a decade, Massachusetts legislators have considered various bills aimed at regulating the use of noncompetition agreements in the commonwealth. Noncompetes currently are governed by Massachusetts case law which, although relatively well developed, sometimes leads to inconsistent results, in turn leading to uncertainty as to what restrictions will be enforced. Many proponents of noncompete legislation also believe that the current system has resulted in employers’ overuse and/or abuse of noncompetition agreements. On the other hand, some business advocates argue that noncompete agreements stifle innovation and new business creation in Massachusetts.

Legislative efforts to regulate the use of noncompetes began in earnest in 2009, and there have been multiple bills introduced each year since. Hopes for legislation gained significant momentum in 2016, when both the Massachusetts House of Representatives and Senate passed noncompete bills. However, the 2016 legislative session ended before a compromise could be reached on the bills.

Current Legislative Action

Bill sponsors are back at it again this year. In January of 2017, legislators introduced no fewer than eight different bills to regulate the use of noncompetition agreements. On October 31, 2017, the Massachusetts Joint Committee on Labor and Workforce Development held and heard substantial testimony from supporters and opponents of the bills.

The various bills this year build upon bills introduced in prior years and share many similarities among them, including:

  • imposing a geographic scope and maximum noncompete duration;
  • requiring additional consideration, beyond the continuation of employment, when agreements are executed after employment has commenced;
  • requiring employers to provide advanced notice to prospective employees that a noncompete is required;
  • addressing a court’s ability to reform an otherwise noncompliant agreement;
  • outlining classes of employees exempt from noncompete agreements; and
  • outlining procedural protections for employees both before and after signing such agreements.

The bills that address business trade secrets generally call for Massachusetts to adopt the Uniform Trade Secrets Act as well as a form of the inevitable disclosure doctrine under which actual or threatened misappropriation can be enjoined.

Key Takeaways

Though the fate of these bills remains uncertain, concerns about the use of noncompetes, including perceived abuses disadvantaging employees and stifling innovation, suggest that legislation is likely inevitable. For now, Massachusetts employers and employees can take a wait-and-see approach as the bills either progress towards passage or again stall.   

© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.National Law Review, Volume VII, Number 335

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About this Author

Robert M. Shea, Ogletree Deakins, Lawful Termination Lawyer, worker misclassification attorney
Shareholder

Bob Shea is a Shareholder in the Boston office of Ogletree Deakins. Bob’s practice includes working closely with clients to develop best practices, and providing advice on discipline and discharge, discrimination, harassment, worker misclassification, wage-hour compliance, disability, non-competition, and workforce reductions. He also focuses on drafting employment agreements, independent contractor agreements and separation agreements, and he regularly conducts workplace training for clients, including anti-harassment training and performs worker wage-hour...

617-994-5722
Kimberley Odum, Partner Boston, Employment Litigation & Data Privacy
Partner

Kimberley K. Odums is an associate in the Boston office where she focuses her practice on employment litigation and counseling, and Data Privacy work.  In litigation, she defends clients in employment disputes. Among the types of cases she takes on are employment disputes and provides defense against claims arising under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), and a host of other federal and state labor and employment statutes. 

Kimberley also advises clients on the full spectrum of labor and employment law matters including statutory compliance, antidiscrimination practices, employment policies, and HR procedures. She also provides advice in relation to cyber security, data, for federal and state law requirements. Kimberley participates in a number of pro bono organizations and has led and participated in various workshops and training programs for the Citizens Project and the Lawyers’ Committee for Civil Rights and Economic Justice.

She is licensed under the State Bar's in: Massachusetts, Connecticut and New York.  She is also an active member, and current Executive Board member, of the Massachusetts Black Lawyers Association. Before joining the firm she practiced labor & relations in Boston. 

617-994-5735