Non-Compete Law Blog

In the non-compete arena, the bill would:

• Limit non-competes to 12 months (or two years if the employee breached a fiduciary duty or unlawfully took property)

• Prohibit enforcing non-competes against certain categories of workers such as non-exempt employees, students, and employees terminated without cause or laid off

• Generally prohibit courts from “blue penciling” or reforming overbroad non-competes unless the provisions comply with certain safe harbors defined in the bill

• Require consideration independent of continued employment for non-competes entered into after commencement of employment

• Limit choice of law provisions for Massachusetts residents and employees

• Impose a number of procedural protections for employees both before and after signing the non-compete:

• Pre-signing: Employer must provide advance notice, and non-compete must be in writing and expressly state that employee has right to counsel

• Post-signing: Employer must review non-compete with employee at least once every three years and provide notice of intent to enforce within ten days of termination of the employment relationship

These requirements would compel many employers to overhaul their non-compete policies, and would place significant limits on the reach of non-competes in the Commonwealth.

In the trade secret arena, the bill would:

• Bring Massachusetts in line with the vast majority of states by substantially adopting the Uniform Trade Secrets Act

• Adopt a form of the inevitable disclosure doctrine by clarifying that: “Actual or threatened misappropriation may be enjoined upon principles of equity, including, but not limited to, consideration of party conduct before or after commencement of litigation and circumstances of potential use, upon a showing that information qualifying as a trade secret has been, or inevitably will be, misappropriated.”

While the bill tracks much of last year’s proposed House bill, there are several differences demonstrating that this will be only the start to a lengthy discussion this term. Massachusetts non-compete legislation has been at least eight years in the making and only time will tell whether this year’s efforts gain more traction than those in the past. It is unlikely that the bill will move too quickly through the legislature, but we will keep you updated on any progress, political commentary, or changes.