Category Archives: Noncompetes

            Last month, Judge Edward P. Leibensperger of the Massachusetts Superior Court in Middlesex County decided a case in which he issued a preliminary injunction to enforce a non-competition and non-solicitation agreement and rejected several defenses offered by the defendant employee, including that the employee’s employment had “materially changed” to void the agreement.  Although Judge [...]

Yesterday, I went to a continuing legal education class sponsored by the Boston Bar Association titled “Traps for the Unwary: Drafting Non-Competes and Other Post-Employment Restrictions.”  The class focused on drafting agreements, but naturally there was a lot of discussion about enforcing them as well.  Among the many useful things I learned is that, in [...]

During this past fall and much of the winter, I was serving as a Special Assistant District Attorney in Norfolk County, Massachusetts, which didn’t give me much time to blog. So, to steal a technique that John Marsh uses every week to supplement his excellent posts on the Trade Secret Litigator blog, here are some short discussions of [...]

I am a fan of talk radio, so I was sad when I heard that Boston’s WTKK-FM 96.9 had decided to switch from a talk-radio format to a station featuring “rhythm and dance music from today, along with throwbacks from the ’80s and ’90s.”  Now I listen to WRKO-AM 680, the only talk station left in Boston. One of the big names [...]

Anyone who knows me well knows that I love college football.  I went to Boston College Law School and am a BC Eagles season ticket holder.  So I am interested in BC’s search for a new head football coach after the school’s decision to fire Frank Spaziani after a 2-10 season this year, including whether [...]

Late last month, Judge Patti Saris of the U.S. District Court for the District of Massachusetts ruled that a noncompete was enforceable and ordered the defendant employee not to work for a competitor of the plaintiff employer for one year.  In addition to determining that the noncompete was valid, Judge Saris concluded, among other things, that [...]

Once a lawsuit over trade secrets or a noncompete begins, “discovery” is usually the next step in the case.  This is the phase of a lawsuit where each party asks for documents and conducts depositions to obtain relevant information from the other side.  As any employment litigator can tell you, discovery usually involves tricky issues regarding what information is relevant [...]

A choice-of-law clause is a provision in a contract (e.g., a noncompete) that states what state’s law will apply to the contract, regardless of where the lawsuit to enforce it is filed.  Donald C. Dowling Jr. recently published an article that explains the drawback of such provisions for employers.  Although he focuses mostly on international law, his observations apply [...]

The Boston Business Litigation newsletter from Yurko, Salvesen & Remz recently brought to our attention an interesting new lawsuit involving a claim by a dental practice that a dentist violated non-competition and non-solicitation covenants he entered into when he sold his practice.  The noncompete restriction at issue prohibited the dentist from ”practicing dentistry” for three years within a 15 mile radius of the plaintiff’s South Weymouth office. So [...]

As reported by Law360, a Philadelphia-based law firm, Swartz Campbell LLC, recently sued a competing Philadelphia firm, The Chartwell Law Offices LLP, alleging that Chartwell essentially stole one of Swartz’s offices located in Fort Myers, Florida, including a partner and two employees.  Swartz contends that the partner is subject to a partnership agreement that requires a four-month notice before [...]

Often an employer will require an employee to sign an invention assignment agreement before starting to work for the employer, which frequently states that any inventions that an employee creates while working for the employer shall become the employer’s property.  Last month, such an agreement was put to the test and survived.  Judge Peter Lauriat of [...]

In a recent decision from the U.S. District Court for the District of Massachusetts, Judge Denise Casper rejected an argument by the defendant employee in a noncompete case that the employee was “fraudulently induced” by his former employer to sign a noncompete agreement.  The employee argued that the offer letter he received offering him stock options after he began working [...]

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) [...]

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.  [...]

The Massachusetts Lawyers Weekly article from this week’s edition, which discusses Judge Casper’s decision in U.S. Electrical Services, Inc. v. Schmidt, is available here.  I’m quoted in the second section of the article.

Massachusetts Lawyers Weekly reports on a new decision from the U.S. District Court for the District of Massachusetts by Judge Casper that makes “inevitable disclosure” arguments effective only in cases involving noncompetition agreements. I’m quoted in the text of the article.  (For those of you without a subscription to Massachusetts Lawyers Weekly, I’ll post a copy [...]

Chip Collins has written an interesting post on “full time and attention” clauses in employment contracts.  These clauses often state that an employee must devote his or her “full time and attention” to the employer’s business, i.e., the employee cannot engage in other work, including side businesses or preparing to compete with the employer, during the course [...]

I read an interesting article by Peter A Steinmeyer and Zach C. Jackson on the steps an employer should consider before filing a noncompete lawsuit.  It’s in a very useful format that lists bullet points under each item.  I found it particularly interesting that the authors noted that sending a copy of a “cease and desist” letter to [...]

Many contracts, including noncompetition agreements, have what’s called “boilerplate” language, “ready-made or all-purpose language that will fit in a variety of documents.” Black’s Law Dictionary 72 (2d pocket ed. 2001). One type of boilerplate often contained in a noncompete is an assignability clause, which might say something like: “This Agreement is assignable by the Company and inures [...]

A plaintiff employer who files a lawsuit to enforce a noncompete often will seek a “preliminary injunction.” This is an order from the court at the outset of the case stating that the defendant employee cannot work for the competing employer while the litigation is pending. A typical reason a plaintiff asks for a preliminary injunction is [...]

Yet another Massachusetts Superior Court judge has issued a decision addressing whether a change in an employee’s job precluded enforcement of a previously-signed noncompete. (See here and here for previous discussions of this issue.) In an order issued last March (but only recently made public by Massachusetts Lawyers Weekly (login required), Superior Court Judge E. Susan Garsh rejected the “material change” [...]

The answer, at least in Massachusetts, is yes. In Cesar v. Sundelin, the Massachusetts Appeals Court recently ruled that, in dividing a marital estate that includes a family business, a judge of the Probate and Family Court has the authority to enjoin the party that no longer will have any ownership in the business from operating a [...]

When a plaintiff tries to enforce a non-competition agreement, sometimes the defendant will argue that the non-compete should not be enforced because the plaintiff has breached another agreement between the parties. If true, this argument will often work to defeat a request for “equitable relief”—a plaintiff’s request for a preliminary injunction preventing the defendant from working [...]

A number of cases involving former executives have received national attention recently and serve as a good reminder that trade-secret, non-solicitation, and non-competition controversies can arise at the highest level of a company. Another recent case also serves as a reminder that trade-secret claims should be filed only when there is a good-faith basis to do [...]

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 [...]

A recent case decided in the Middlesex County Superior Court illustrates how not every claim of generalized “unfairness” will be sufficient to avoid enforcement of a non-competition agreement. In A.R.S. Services, Inc. v. Baker, the defendant employee worked for A.R.S. Services, a company in the disaster restoration field, and had signed an agreement with non-competition [...]

A case decided last month in the Massachusetts Superior Court Business Litigation Session shows once again how material changes in the conditions of an employee’s employment can void a previously signed restrictive covenant, especially when the employer gives the employee a new non-competition agreement but the employee never signs it.    The lawsuit was brought by [...]

This decision by a federal judge in Massachusetts enforcing a non-competition agreement is notable for at least two reasons: (1) it presents yet another example of a court in Massachusetts rejecting an argument that California law should govern a non-compete dispute, and (2) it contains an interesting discussion of the hiring company’s substantial but unsuccessful effort to avoid the [...]

An increasingly common scenario in the world of noncompete enforcement is the so-called “race to the courthouse,” where parallel actions are brought in separate jurisdictions about the same dispute. In one case, the former employer seeks enforcement of the noncompete. In the other, the employee and his or her new employer seek an order declaring [...]

While this blog focuses on the continuing evolution of the law of non-competition agreements and related issues in Massachusetts, we occasionally look to notable cases and legislative developments in other states.  What happened in Georgia last week certainly can be described as notable. Here in Massachusetts, we have spent the past three years debating whether to [...]

To the uninitiated, a standard non-disclosure, non-competition and non-solicitation agreement may seem like pages of meaningless legal “boilerplate” punctuated by a few interesting sentences containing the guts of the document: the restrictions themselves. A recent Massachusetts court decision illustrates that this approach to noncompetition agreements can be perilous. The case underscores the need for employers that utilize non-competition and [...]

As followers of the recent debate about noncompetes in Massachusetts are well aware, a significant impetus in the push for a change in Massachusetts law has been the contrast provided by California, where employee non-competition agreements generally are unenforceable.   As reported here when the MA debate started in earnest, proponents of efforts to prohibit noncompetes have argued that Silicon Valley has fared better than the [...]

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 [...]

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 [...]

It is often said that noncompete cases differ from other types of civil litigation in that the initial battle in the case often decides the war. If you slip and fall while buying groceries and decide to sue the supermarket, your case will follow the typical path of civil litigation: a complaint will be filed, [...]

Many employers require that new hires sign a non-competition or non-solicitation agreement as a condition of hire.  Companies expect that these agreements will be valid and enforceable when the employee leaves, even if the employee and his or her job evolve over time.  In 2004, this basic assumption was called into question as a result of three successive decisions [...]

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 [...]

In a recent post at Innovation Economy, Scott Kirsner describes a discussion he had with an attorney who has been involved with negotiating severance deals for several employees.  The attorney has sought to avoid future noncompete complications for his clients by essentially trading severance pay for noncompete relief.  The attorney told Kirsner that “employees can often get released from [...]

Multiple media outlets (see here  and here, for example) have been covering an alarming report jointly issued recently by the Ponemon Institute, an Arizona-based research group, and Symantec Corp., that data theft is common among departing employees. As reported in the Washington Post, the most significant finding of a joint survey of employees who left a [...]

It is possible — at least theoretically — to have a purely oral noncompete agreement.  A covenant not to compete is, most fundamentally, a contract, and a valid and legally enforceable contract can be formed through purely verbal communications (with some exceptions not relevant here). Nevertheless, given the heightened scrutiny that noncompetes are subjected to under Massachusetts [...]

I recently authored an article on planning reductions-in-force, a topic unfortunately on the minds of many businesses in these difficult economic times. (The article is available here.)The last of my “tips” urges companies to remind employees affected by layoffs of the continued applicability of nondisclosure obligations and other restrictive covenants. This raises a question: will a [...]

Many litigators of non-competition agreement cases in Massachusetts would reflexively answer “state court” to the above question. That is, given the choice (if jurisdictional principles permit) of bringing an action to enforce a non-compete or non-solicitation provision in state or federal court in Massachusetts, the conventional wisdom would be to avoid what has been perceived as the [...]

I would not be the first to observe that the Massachusetts legislature sometimes acts in strange and mysterious ways. It has been known to surprise even those of us who think we are paying attention to such things with unexpected employment-related legislation. The very significant amendment in 2004 to the Massachusetts Independent Contractor Law (.pdf) is [...]

Whether a successor in a corporate transaction may enforce a noncompete between the predecessor entity and its employees remains one of the more undeveloped and uncertain areas of noncompete law in Massachusetts. A few years ago, in Securitas Security Services USA, Inc. v. Jenkins, now-retired Judge Allan van Gestel of the Suffolk County Business Litigation [...]

It is not uncommon for employment agreements, particularly those involving senior employees, to contain provisions requiring that the employee give notice of his or her intention to leave. These “mandatory notice” provisions can have a duration of as little as two weeks and as much as six months. Employers explain them as being intended to [...]

A newly-decided case by Judge Fabricant of the Business Litigation Section of Suffolk Superior Court highlights some interesting trends with regard to the enforcement of non-compete agreements (Lunt v. Campbell, et al.). The case involves three hairdressers who left the Lunt salon in Beverly Farms, Massachusetts to start a new shop in Peabody, Massachusetts. The [...]

A recent decision illustrates the risks for defendants in non-compete cases who go on the offensive by asserting counterclaims against former employers. In a 2006 opinion, the Massachusetts Business Litigation Session awarded a defendant in a non-compete case significant damages after the defendant proved that the plaintiff had filed the lawsuit for improper competitive purposes. [...]

This week’s ruling in the ongoing Howie Carr saga, despite the current media splash, essentially maintains the status quo in the case. At issue was Carr’s emergency motion for reconsideration of an earlier order — described here — refusing to invalidate the exercise by Carr’s long-time employer — Entercom — of a right of first refusal. [...]

While it remains quite difficult to predict whether a Massachusetts judge will enforce any given restrictive covenant in a particular case, close observers of recent Massachusetts noncompete decisions would note that judges increasingly are reluctant to enforce post-employment restrictions against "the little guy" — as contrasted with senior, highly-compensated managers.  A recent insurance-industry dispute exemplifies [...]

Under a little known and rarely interpreted Massachusetts statute, non-competition agreements in the broadcasting industry are void and unenforceable. So, how could Entercom Boston, the employer of well-known radio personality Howie Carr, keep him from going to work for a competing radio station? As Massachusetts-based readers of this blog likely are aware, last week Judge [...]

Employers in Massachusetts generally can take comfort in a well-established legal principle that gives judges discretion to enforce a noncompete provision “to the extent that it is reasonable.”  Courts regularly use this concept to modify the duration and/or scope (substantive and geographic) of noncompete provisions to make them “reasonable” based on the particular facts of [...]

The current trend in the world of noncompete litigation in Massachusetts is away from the enforcement of traditional noncompetes — as distinguished from non-solicitation and non-disclosure provisions.  Massachusetts judges seem to be increasingly skeptical of traditional noncompete provisions in contexts other than very senior, highly-paid employees going to work for direct competitors.  So, when a [...]

The Mazonson decision described in the previous post also contained an interesting discussion of the plaintiff’s request to enforce a customer-based restriction against one of the individual defendants.  On this issue as well, the Massachusetts court denied the request for a preliminary injunction.  Interestingly, Judge Murtagh found that the agreement’s restriction prohibiting the employee from [...]