Category Archives: Noncompete Debate

MA Legislative Session Ends Without Noncompete Compromise

The Massachusetts legislature ended its 2015-16 session last night without reaching a compromise on a bill to significantly reform the law of non-competition agreements in the Commonwealth. Negotiations continued late into the waning hours of the session, but legislators could not resolve the significant differences between the competing reform visions represented by the House and Senate bills.  Early reports indicate that the final disagreement was focused on the garden leave requirement,… More

MA Senate Passes Stringent Noncompete Bill

As expected, the Massachusetts Senate last night passed comprehensive legislation on non-competition agreements that imposes significantly more stringent requirements and limitations on noncompetes than is present in the legislation passed by the House two weeks ago (which already would significantly alter current law).  The bill passed by the full Senate differs only slightly from the the proposal advanced by the Rules Committee earlier this week and described in this post.  … More

MA Senate’s Proposed Noncompete Bill is MUCH More Stringent Than House Bill

The Massachusetts Senate’s Committee on Rules is advancing legislation on noncompetes that differs markedly from the bill passed by the House and described here last week.  (Thank you to Brad MacDougall of AIM for bringing this to my attention.)  The bill, S.2418, is structured similarly to the House bill, but has the following significant differences:

  • Noncompetes generally would be limited to 3 months in duration,…
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MA House Passes Significant Noncompete Reform Bill

On June 29, 2016, the Massachusetts House of Representatives passed a comprehensive noncompete reform bill by a vote of 149-0.  Given that the Senate last year passed a somewhat similar bill (but the legislation stalled on the House side), it seems quite likely that a new noncompete law will be passed by the legislature before the close of the current session on July 31.  Whether the Governor will sign it is uncertain.  … More

Noncompete Reform Finally May Be Coming to Massachusetts

2000px-Seal_of_the_House_of_Representatives_of_Massachusetts.svg_-300x300After falling off the radar recently, it appears that non-compete reform is back on the agenda on Beacon Hill.  As reported by the Boston Globe, in a March 2, 2016 speech to the Greater Boston Chamber of Commerce, House Speaker Robert A. DeLeo voiced support for placing restrictions on non-competition agreements.  Among the measures advanced by DeLeo were: (1) limiting the duration of non-competes to 1 year;… More

Update on Noncompete Legislation

Here is an update on new developments in the few weeks since Governor Patrick introduced legislation that would largely abolish employment-based noncompetes in Massachusetts (described here).

As summarized by Russ Beck here, the MA legislature’s Joint Committee on Labor and Workforce Development has favorably reported out a previously-filed bill very similar to Gov. Patrick’s legislation banning noncompetes.  Interesting, Governor Patrick’s bill is being considered by a different committee,… More

MA Governor Pushes to Abolish Noncompetes

In case you missed the news splash over the past 48 hours, MA Governor Patrick this week announced that he is introducing legislation to abolish employee noncompete agreements except in very limited circumstances.  The proposed legislation would have Massachusetts join California as one of the very few states that generally prohibit these post-employment restrictions.   The proposed law is part of a larger bill — the Growth and Opportunity Act of 2014 —… More

CFAA and Noncompete News

            Over the past two months, several interesting items of Computer Fraud and Abuse Act (CFAA) and noncompete news have crossed my desk.  Below are summaries of the two most important items:

            1. Encryption Can Be a CFAA Violation: In early December, Judge Denise J. Casper of the U.S. District Court in Massachusetts ordered a former employee of a company to, among other things, disclose the password that he put on an important file on the company’s server because the company was likely to prevail on its CFAA claim against the employee under the “preliminary injunction”… More

More on the Noncompete Debate

An Op-Ed in last Sunday’s Boston Globe joins the chorus of advocates for noncompete reform in Massachusetts.  The author, Jeremy Hitchock, CEO of New Hampshire-based Dyn, prefers California’s “prohibition” approach (in which employee noncompetes generally aren’t enforceable) , arguing that California’s model  “has created a unique employment ecosystem that thrives on employee movement.”  Conceding that this model “reduces the protection of an individual company’s business know-how,” Hitchcock asserts that “major trade secrets”… More

Update on Noncompete Legislation in Massachusetts

Earlier this month, the Joint Committee on Labor and Workforce Development of the Massachusetts state legislature held a hearing during which it discussed a proposal to limit the enforcement of noncompetes.  The bill, in both its House and Senate versions, provides, with certain exceptions relating to acts by the employee, a presumption that noncompetes for no longer than six months are reasonable (and enforceable), but noncompetes that are longer than six months are presumed to be unreasonable (and not enforceable to the extent they last longer than six months). … More

Litigation Over Noncompete Clauses Is Rising

            A Wall Street Journal article published yesterday states that litigation over employee noncompetes has risen by more than 60% in the past decade, and this increase is affecting entrepreneurs who are unable to leave their current jobs to start new businesses or hire employees.  This generally is the argument in favor of reform legislation, such as what has been proposed in Massachusetts, to limit or even eliminate noncompetes,… More

Noncompete Symposium and Update on Legislation

Earlier this week, I participated in the Boston Bar Association’s Fifth Annual Symposium on Employee Non-Compete Agreements, Trade Secrets and Job Creation.  The panelists included Senator Will Brownsberger and Representative Lori Ehrlich, the sponsors of the currently pending bill that would focus noncompete reform efforts on limiting the duration of noncompetes.  More information about that proposal can be found here and here.  The panel also included Russell Beck,… More

Gov. Patrick Again Expresses Doubts About Noncompetes

As reported in the Boston Business Journal, this week at the annual meeting of the Mass. Technology Leadership Council, Governor Deval Patrick again expressed his view that non-competition agreements restrain jobs and that arguments in favor of eliminating them altogether are “compelling.” At the same time, the Governor acknowledged that he knows there are technology executives who support continued enforcement of these agreements. As reported on this blog,… More

Text of New Noncompete Bill Now Available

The new noncompete bill discussed in my last post is now available here. As expected, it is substantially shorter and simpler than the previous proposal.  Among other things, it dispenses with a pre-hire notice requirement, garden leave, and attorneys’ fees shifting for unreasonable restrictions. Here are the salient features of the new bill:

  • A noncompete of up to six months is presumptively reasonable in duration. …
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2013 Noncompete Reform Effort Will Focus on Durational Limits

The Massachusetts legislature has begun a new, two-year session, and with it comes a pared-down approach to reforming the law of noncompetition agreements in the Commonwealth.  The two principal sponsors of past reform legislation, Senator (previously Rep.) Will Brownsberger and Rep. Lori Erhlich, explained in a recent Boston Business Journal piece that they are introducing a new bill intended to address objections from smaller businesses about attorney’s fees shifting provisions in the previous bill. … More

The Status of Noncompete Reform in Massachusetts

Yesterday, I attended a panel presentation at the Boston Bar Association on the status of noncompete legislative reform in Massachusetts. As Michael Rosen has discussed in numerous prior posts on this blog, recently there has been a push to limit noncompetes in order to increase employee mobility and productivity, led by state Rep. Lori Ehrlich (D-Marblehead) and state Sen. William Brownsberger (D-Belmont). The presentation was designed to update the legal community on the movement.… More

“Employee Non-Compete Agreements, Trade Secrets and Job Creation: The Status of Law Reform” at the Boston Bar Association

On Tuesday, July 24, the Boston Bar Association will be hosting a symposium on noncompete and trade secret legislation in Massachusetts.  State Representatives Brownsberger and Ehrlich, the leaders of the movement to substantially limit the enforceability of noncompetes in Massachusetts, will be in attendance.  Mike and I plan to be there, too, and will report back.  Stay tuned. More

Will Massachusetts Adopt the Uniform Trade Secrets Act?

At my last Massachusetts Bar Association (MBA) Civil Litigation Section meeting, I learned about a bill to adopt the Uniform Trade Secrets Act (UTSA) that has been floating around the Massachusetts Legislature since late January. Forms of the UTSA have been adopted in 46 states in addition to the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Only New York, Texas, North Carolina, and Massachusetts have not adopted it.… More

New Momentum for Noncompete Reform?

This blog has reported on efforts over the past few years to enact legislation that would either prohibit or significantly reform the law of noncompetes in Massachusetts.  During 2009 and 2010, these efforts had stalled, for at least two reasons:  (1) several industry organizations had been vocal in opposing any change to the status quo; and (2) Governor Patrick’s administration had been unenthusiastic about reform.  As described here, … More

The Latest on MA Noncompete Reform Efforts

It’s time for another update on the efforts in Massachusetts — now several years old — to abolish noncompetes or reform the law governing their enforcement.  In the past week, Scott Kirsner has focused again on this issue both in the Boston Sunday Globe and his Innovation Economy blog.  He provides a very useful summary of the status of the current efforts (as well as his own anti-noncompete stance) here. … More

MA Noncompete Bill Has Been Re-filed

As confirmed here, a bill to reform the law of noncompetition agreements in Massachusetts, which died in the 2010 legislative session, was re-filed on January 19, 2011.  Rep. Will Brownsberger, one of the sponsors of the compromise legislation in 2010, stated on his website prior to the re-filing that it would "look like the last generation of the bill that came out of committee with a few additional changes that reflect input we have been getting."   … More

New Momentum to Limit Noncompetes in Massachusetts?

One of my partners, Jeff Quillen, recently brought to my attention an interesting discussion about non-competes that took place last month at a meeting of the 12×12 group.  As explained here, 12×12 was formed earlier this year in an effort to drive the company formation process in Massachusetts. It consists of “12 world-class CEO’s and 12 senior partners from some of the most active VC firms in town to launch 12 new companies in the next 12 months – and in so doing,… More

MA Noncompete Legislation is Dead … At Least for Now

The effort to substantially alter the landscape for noncompete agreements in Massachusetts via legislation has stalled. After advancing out of committee in the Massachusetts House of Representatives, the compromise legislation (described here) was included in an economic development bill with many other provisions and proposed amendments relating to business issues in the Commonwealth. As has been reported here on the Associated Industries of Massachusetts (AIM) blog,… More

Noncompete Legislation Takes a Step Toward Passage

As reported here on the website of Rep. William Brownsberger:

legislation to revise the law of non-competition agreements in Massachusetts took a step forward this week. The Committee on Labor and Human Resources reported out a bill with a favorable recommendation.  Here is the new draft.  It is essentially the bill that Representatives Ehrlich and Brownsberger worked out [with] representatives of many interest groups, but we have not yet had the opportunity to study the language carefully.… More

Legislative Hearing on Noncompetes

Yesterday, the Joint Committee on Labor and Workforce Development held a public hearing on proposed non-compete legislation (details about the legislation are below).  The co-sponsors of the compromise legislation, Representatives Brownsberger and Ehrlich, introduced the bill, after which various interested parties presented their views to the Committee.  Unfortunately, I was not able to stay for the entire hearing, but a very comprehensive summary of the differing viewpoints that were presented can be found here.  … More

Upcoming Hearing and Revised Legislation

The next round in the ongoing debate about noncompetes in Massachusetts has arrived.  As described here, a public hearing on various forms of pending noncompete legislation will take place before the Joint Committee on Labor and Workforce Development on October 7, between 10:30 am and 1:00 pm.  The location is Room A-2 of the State House.  The public is invited to attend and testify.

Earlier this week,… More

Patrick Administration Weighs in on Noncompete Debate

This week, a top Patrick administration official — Gregory Bialecki, Secretary, Executive Office of Housing and Economic Development — posted on his office’s blog the Administration’s current views on the noncompete debate in Massachusetts.   (Many thanks to Brad MacDougall, of the Associated Industries of Massachusetts, for bringing this to my attention.) This is a significant development; until now, the Patrick administration has taken no position on the issue,… More

Thoughts on BBA Noncompete Symposium

On Wednesday, July 22, I participated in the Boston Bar Association’s symposium on employee noncompete agreements in Massachusetts. (I posted the announcement for it here.  A picture is here.) First of all, I want to thank Steve Chow of Burns & Levinson for the opportunity to participate in the panel discussion. I am not going to attempt to summarize here all of the very interesting points made during the event.… More

Bill to Abolish Noncompetes in Massachusetts Appears Dead

As reported in Xconomy, the effort to abolish noncompetes in Massachusetts except in sale of business situations has had a significant setback.  Rep. William Brownsberger, who introduced a bill to accomplish that goal earlier this year, has now combined forces with Rep. Lori Ehrlich (who had proposed a milder limitation on noncompetes) to introduce a compromise bill that would permit continued enforcement of noncompetes, but with several restrictions.  I won’t catalog all of them now,… More

Upcoming Event on Noncompete Debate

The Boston Bar Association has organized an event — open to the public (and free) — on the various bills that would significantly alter the law governing non-competition agreements in Massachusetts.   The panel of speakers will include yours truly (speaking in this setting for the “status quo”) as well as the following:

  • State Rep. William N. Brownsberger, Esq., Sponsor of H. 1794 (bill to eliminate non-competes)
  • Russell Beck,…
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Kirsner Adds to No-Noncompete Debate

Scott Kirsner, business writer for the Boston Globe, has been perhaps the most active follower of the Massachusetts noncompete debate during the past couple of years.  Last week, he posted on his blog, Innovation Economy , about a recent chat with Gov. Deval Patrick on the issue, including the pending legislation to prohibit or scale back noncompetes.  The bottom line, it seems, is that Gov. Patrick continues to hedge his bets.  Kirsner quotes him as saying, "If there’s a consensus in the industry [as to whether they’re a good or bad thing],… More

Upcoming Event on Noncompetes in Massachusetts

The Rappaport Institute for Greater Boston at Harvard’s Kennedy School next week is holding what promises to be an interesting event on the continuing debate about noncompete agreements and economic development in Massachusetts. The event, part of an ongoing lecture series, is entitled “Using Non-Compete Laws to Spur Economic Development in Massachusetts.” The panelists include Prof. Lee Fleming and Matt Marx, academics who have focused on attempting to quantify the effect of noncompetes on business innovation;… More

Information on Noncompete Debate

For those who have been following this blog’s discussion of the ongoing debate about noncompetes in Massachusetts and recently introduced legislation seeking to prohibit such restrictions, this site is a useful resource on the subject.  Thanks to Caroline Huang for bringing it to my attention.  It contains the text of proposed legislation and background information on noncompetition agreements in Massachusetts.  The site was created by Ms. Huang in consultation with Rep. Will Brownsberger,… More

Bill to Abolish Non-Competes in Massachusetts is Filed

As expected (and first discussed here), Massachusetts Rep. Will Brownsberger has introduced a bill that would abolish the use of noncompete agreements in Massachusetts, at least in the employment and independent contractor contexts.  Here is the text of the proposed law:

AN ACT TO PROHIBIT RESTRICTIVE EMPLOYMENT COVENANTS

Section 1. Section 19 of Chapter 149 of the General Laws of Massachusetts is hereby amended by inserting at the end the following new paragraphs:

Any written or oral contract or agreement arising out of an employment relationship that prohibits,… More

Bill to Abolish MA Noncompetes Imminent

Thanks to Wade Roush for bringing to my attention his article posted yesterday in Xconomy, a very informative web publication focused on the tech sectors in Boston and on the west coast.  As with this blog, Xconomy has been closely following what I have described as the Massachusetts noncompete "debate" over the past year or so.  (Scroll down to see earlier posts on this subject.) Wade reports that a Massachusetts legislator,… More

Recent Events Provide More Fodder for Debate About Noncompetes in Massachusetts

The blogosphere once again is abuzz with continued discussion of whether the enforceability of noncompete clauses in Massachusetts places the state at a competitive disadvantage with California generally and Silicon Valley in particular. The latest causes: a court decision from California and an academic paper from Canada.

A decision earlier this month from California’s highest court makes clear, after some years of simmering debate, that noncompetition agreements are invalid under California law and that even a narrowly drafted prohibition will not be upheld except in a sale of business context.… More

Panel Discusses Whether Noncompetes Stifle Innovation in Massachusetts

This blog previously described a proposal being advanced by some in the Massachusetts venture capital community to abolish noncompetition agreements in Massachusetts. (See links to previous posts: December 7, 2007, February 11, 2008, February 27, 2008) The two most visible proponents of that proposal, Bijan Sabet of Spark Capital and Paul Maeder of Highland Capital Partners, participated in a panel discussion on noncompetes and innovation at Harvard’s Berkman Center for Internet &… More

Governor Patrick Discusses Noncompetes in Massachusetts

Today I attended the Mass Technology Leadership Council’s 2008 Annual Meeting, at which several speakers, including Governor Deval Patrick, spoke about economic development strategies, the state of the technology industry in Massachusetts, and the like. I attended the meeting in part to see whether the recent noncompete debate (described here and here) would receive any attention. I was quite interested to find that it did.… More

More on the Proposal to Abolish Noncompetes

Several weeks back this blog discussed a proposal being advanced by some Massachusetts venture capitalists to abolish noncompetition agreements in Massachusetts.  (See Proposal to Eradicate Noncompetes in Massachusetts Creates Stir).  We noted that a Boston Globe article was reporting that supporters of this proposal had written to Governor Patrick urging legislative action to make noncompetes invalid in Massachusetts.  The letter to Governor Patrick, as well as the Governor’s somewhat perfunctory response,… More

Do Noncompetes Unduly Impede Executive Mobility?

A discussion in a BusinessWeek article this week on the telecom giant Sprint’s search for a new CEO raises an interesting question:  have U.S. businesses gone too far in binding their most senior executives to non-compete and other restrictive agreements?  In discussing the Sprint board’s search to replace its current CEO in the wake of poor company performance, the article reports that Sprint has “cast its line overseas not only to broaden the pool of strong candidates but to avoid the snare of noncompete contracts often held by executives who have worked at other U.S.… More