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5th Annual Symposium on Employee Non-Compete Agreements, Trade Secrets and Job Creation

Tuesday, July 23, 2013 4:00 PM to 6:00 PM
Boston Bar Association - 16 Beacon Street, Boston, MA

 

Description:

Is Massachusetts enforcement of employee non-compete agreements a drag on the creation of new enterprises (and jobs) – preventing “spin-offs” from incumbent ones – compared to unenforceability of such agreements under California’s 1872 codification of the common law?
 
Is enforceability necessary to protect business investment against unfaithful employees and expensive trade secret litigation?

Massachusetts court decisions extend enforceability of non-compete agreements to protect "confidential information" that does not meet certain conditions for trade secrets seen in American Law Institute’s 1939 Restatement of Torts.  Have broad employee confidentiality agreements changed the common law presumption against servitudes?  Would joining forty-eight states (including California and most recently Texas) 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 a bill that would have instituted a rule similar to the California statute. Representative Lori  Ehrlich filed a bill that provided safeguards for employees and targeted limitations on non-competition agreements.

After much negotiation and consideration of many comments including those made at BBA symposia in each July since 2009, Senator Brownsberger and Rep. Ehrlich filed S.846 and H.1715 in the current session, which very generally speaking, set a six-month presumption of enforceability.  (https://malegislature.gov/Bills/188/Senate/S846; https://malegislature.gov/Bills/188/House/H1715) Representative Sheila Harrington filed H.1729 which follows the California approach, making unlawful a restriction from “engaging in a lawful profession, trade, or business” except in the sale of the goodwill of a business.  (https://malegislature.gov/Bills/188/House/H1729)
 
The Massachusetts Uniform Law Commission filed H. 27, which would adopt the Uniform Trade Secrets Act (UTSA), as tweaked by committees of the BBA (https://malegislature.gov/Bills/188/House/H27). The ALI approved in 2011 Chapter 8 of its proposed Restatement of Law (Third) on Employment Law, "Employee Duty of Loyalty and Restrictive Covenants," which applies UTSA standards to support enforceability of employee non-compete agreements.

Representative Garrett J. Bradley filed H.1225, which proposes the BBA-tweaked version of the UTSA, but adds a provision to section 19 of Chapter 149 to render unenforceable post-employment conditions or restrictions on “any type of employment or independent” contractor work, while leaving in place “the remainder of the contract or agreement.”  (https://malegislature.gov/Bills/188/House/H1225)  This apparently would leave non-disclosure and non-solicitation (of employees or customers) in place.  The Executive Office of Housing and Economic Development (EOHED) currently supports this bill.

Please join us in a review of the landscape and an informal discussion/debate from 4-6 pm, networking reception to follow from 6-7 pm. Our distinguished panel includes:

 

Sponsoring Section/Committee(s):

 



 

Contact:

Jennifer Jones
jjones@bostonbar.org

 

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