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Employee Non-Compete Agreements, Trade Secrets and Job Creation: The Status of Law Reform

Tuesday, July 24, 2012 4:00 PM to 7:30 PM
Boston Bar Association - 16 Beacon Street, Boston, MA

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Description:

Are employee non-compete agreements a drag on the creation of new enterprises (and jobs) “spun off” from incumbent ones in Massachusetts compared to California where such agreements are generally unenforceable under its 1872 codification of the common law?
 
Are they necessary to protect business investment against unfaithful employees and expensive trade secret litigation?

Massachusetts decisions extend enforceability of non-compete agreements to protect "confidential information" that does not clear the high hurdle for trade secrets under the American Law Institute’s 1939 Restatement of Torts.  Have broad employee confidentiality agreements changed the common law presumption against servitudes?  Would joining forty-seven states, including California, in adopting the more modern Uniform Trade Secrets Act help make Massachusetts more competitive?
 
In the 2008-2010 legislative session, then State Representative William N. Brownsberger, supported by, among others, West Coast-oriented venture capitalists, filed H. 1794, which would have instituted a rule similar to the California statute. State Representative Lori  Ehrlich filed H. 1799, which would have spelled out procedures for and enforceability of employee non-compete agreements.  Soliciting and receiving many comments, including from Boston Bar Association symposia in 2009 and 2010, Representatives Ehrlich and Brownsberger joined, filing in current session H. 2293 (see http://www.malegislature.gov/Bills/187/House/H02293).  State Representative Sheila Harrington filed H. 2296 which follows the California approach (see http://www.malegislature.gov/Bills/187/House/H02296).
 
The Massachusetts Uniform Law Commission filed H. 23, which would adopt the Uniform Trade Secrets Act, as tweaked by committees of the Boston Bar Association (see http://www.malegislature.gov/Bills/187/House/H00023).  The American Law Institute approved in 2011 Chapter 8 of the proposed Restatement of Law (Third) on Employment Law, "Employee Duty of Loyalty and Restrictive Covenants," which applies Uniform Trade Secrets Act standards to support enforceability of employee non-compete agreements.

If these bills do not move in these final days of the 2011-2012 legislative sessions, they are nonetheless likely to be refilled – possibly with input received at this symposium.

Join us on Tuesday, July 24th to join the conversation. Program 4-6, Reception to follow program.


 

Sponsoring Section/Committee(s):

Speakers:

 

Contact:

Jennifer Jones
jjones@bostonbar.org

 

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