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, who has been involved for the past five years in drafting the various reform proposals, Jennifer Lawrence, General Counsel of the Massachusetts Executive Office of Housing and Economic Development (articulating the Patrick administration’s views) and Stephen Chow, a private attorney who has been particularly focused on efforts to enact the Uniform Trade Secrets Act in Massachusetts.

There was a very lively discussion of the ongoing MA noncompete debate (about which much has been written on this blog), and I will not attempt to rehash all of it here.  Here are some of the more significant takeaways (from my perspective):

  • In addition to Senator Brownsberger’s and Representative Ehrlich’s scaled-back compromise bill focused on noncompete duration, there are two other pending bills addressing noncompetes in Massachusetts.  Each follows the so-called “California” model, prohibiting noncompetes altogether or in all but very limited.  One bill, sponsored by Representative Sheila Harrington, is quite similar to California’s statute and would prohibit non-competition agreements except in the context of departing partners and LLC members and in sale of business situations. 
  • Another bill, filed by Representative Garrett Bradley, would have Massachusetts adopt the Uniform Trade Secrets Act but also includes a provision prohibiting noncompetes altogether. 
  • Given the difficulty in passing more modest legislation during the past few years, it would seem that the California-based approach will not advance.  However, Jennifer Lawrence, speaking on behalf of Governor Patrick’s administration, reminded the audience that two years ago, the administration signaled to the legislature that it would push for the California approach if the legislature could not pass a compromise bill.  She emphasized that Governor Patrick remains concerned that the continued enforceability of noncompetes in MA is having a significant chilling effect on new business generation.   She also expressed concerns about employers that overreach and abuse workers by requiring noncompetes where there is no legitimate reason to impose them.  
  • The Joint Committee on Labor & Workforce Development will be conducting a hearing on these bills in September, 2013. 

We will continue to provide updates on this interesting debate as it unfolds.

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