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
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
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
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;
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
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
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:
- State Senator William N. Brownsberger,
of S.846 and H.1715.
- State Representative Lori Ehrlich,
CPA , sponsor of S.846 and H.1715.
- State Representative Sheila C. Harrington , sponsor of H. 1729.
A. Ermilio, Esq ., Executive Director, Massachusetts Office of Business
- Russell Beck,
Esq ., Beck Reed Riden LLP, drafter of (prior) H. 1799 and H. 2293.
- Andrew P.
Botti, Esq ., McLane, Graf, Raulerson & Middleton, P.A., past Chairman,
Smaller Business Association of New England (SBANE), arguing on behalf of
- Stephen Y. Chow,
Esq ., Burns & Levinson LLP, Massachusetts Uniform Law Commission,
drafter of H. 27, symposium organizer.
- Michael L. Rosen, Esq., Foley Hoag LLP, co-author of
"Massachusetts Noncompete Law Blog", arguing on behalf of the status quo.