No New Non-Compete Law for Massachusetts in 2016
The Massachusetts legislature ended its 2015-2106 session on July 31, 2016, and lawmakers did not pass new legislation regarding non-compete agreements before doing so.
For the last few years, numerous efforts have been made in the Commonwealth to limit the use of non-compete agreements, resulting in several bills introduced in the Statehouse. The latest bills, introduced in the House in June and the Senate in mid-July, would have set clear boundaries on the use of non-compete agreements by employers, including by establishing requirements that such non-compete provisions be signed and in writing, not exceed 12 months in duration, and be limited to geographic areas where the employee actually provided services. Another notable feature of the proposed bills was the incorporation of the concept of “garden leave” into non-compete provisions, in which an employer would be required to pay its former employee at least 50% of his or her pay, on a pro rata basis, during the non-compete period. The bills also would have prohibited judicial modification of non-competes and enforcement of non-competes against certain types of workers like students, interns, or fired employees.
As the legislative session drew to a close, however, legislators were unable to reach compromises upon issues such as whether and in what form garden leave might be allowed, and whether an employer and employee could agree upon a payment to support a non-compete entered at the termination of employment.
In this presidential election year, the Massachusetts legislature is adjourned until the start of a new session in January 2017. Renewed efforts to pass a non-compete bill in Massachusetts can be expected then.