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). But because these are only presumptions, an employee can argue that even six months is unreasonable in a particular case, and an employer can argue that a longer noncompete is reasonable, too. Even so, if this bill were to become law, noncompetes for longer than six months would be much harder for employers to enforce because six months would be the “presumed” maximum duration for a noncompete. This changes current law, under which most noncompetes can last one, two, or even three years.
Yet the most interesting development from the hearing was the testimony from the state Secretary of Housing and Economic Development, Greg Bialecki. Secretary Bialecki told the committee that Governor Deval Patrick’s Administration supports eliminating noncompetes altogether in combination with the adoption of the Uniform Trade Secret Act, something I’ve previously written about here. On the other side of the issue, Associated Industries of Massachusetts (AIM) provided written testimony against reform.
What are the chances of noncompete reform actually passing? Previous bills to eliminate noncompetes have not gained much support, and the six-month bill is a compromise, something the sponsors of the bill (Rep. Lori Ehrlich and Sen. William Brownsberger) freely admit. But with Gov. Patrick pushing for reform, the compromise bill may stand a better chance of surviving the legislative process and being enacted into law.