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. . . . Over the next few days, the House Clerk will evaluate the bill to determine the next referral for the bill.

I have not yet had an opportunity to carefully compare the new draft to the most recent compromise draft (described here).  Based on a cursory review, the new draft appears to be nearly identical to the previous draft, with one notable exception:  the new draft has removed all of the references to "garden leave" clauses contained in the previous draft.  (The previous draft stated that noncompetes of more than one-year in duration would be permitted in connection with a "garden leave" provision providing for compensation during the extended period.)  Thus, it appears that the revised bill is somewhat more protective of employees (and therefore less protective of the interests of former employers), in that it places an absolute limit of one year on employment-based noncompetes.

One thought on “Noncompete Legislation Takes a Step Toward Passage

  1. Michael,
    as you point out, not only are all references to garden leave removed, the latest draft that I read goes further,
    “The agreement must be reasonable in duration in relation to the interests served and the duration of actual employment, and in no event may the stated term exceed 1 year from the date of cessation of employment.”
    As one who strongly supported garden leave (http://hypecycles.wordpress.com/2009/07/12/why-retain-noncompetes/) and the right of an employer to require a longer restriction on employees at their own expense, this new draft is certainly troubling.
    But, I think the net benefit is still positive.
    -amrith

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