Archives for February 2013

Massachusetts Needs Firm Rules on Noncompetition Agreements

The more you see noncompetition disputes play out in courtrooms or, more commonly, between law offices, the more it becomes clear that the Massachusetts Legislature needs to step in and set some rules in this area of law.  Regardless of viewpoint on  this often contentious topic, it’s hard to argue against a clear legislative statement that noncompetes are either permitted or banned. In the former case, clear guidelines as to who can be restricted from work, where and how long restrictions can apply, and the procedural prerequisites to the signing and enforcement of noncompetition agreements should be enacted.

While a boon to lawyers, the fact-driven and case-specific approach courts now take to noncompetition disputes otherwise benefits no one but unscrupulous or overly zealous employers and, of course, their attorneys. The problem with current law is its uncertainty. As with any set of what’s referred to as common laws — that is, rules developed in the courtroom and not formally enacted into law by legislative bodies — noncompetion law in Massachusetts lends itself to individualized judicial approaches that can yield inconsistent results. Because fights between employers and their former employees in this area are so common, the Legislature needs to act. Given the various efforts to enact noncompetition legislation in recent years, it should by now have a firm grasp of the concerns of opponents and proponents alike and be capable of bringing a balanced approach to a new noncompetition statute.

Among the rules that would bring immediate improvement to the current system by decreasing costly disputes is one requiring employers to provide copies of their proposed noncompetition agreements to their new hires as part of initial offers of employment. Gone quickly would be courtroom battles about whether a  contract was properly formed, as required by law. A rule defining when an absolute bar to employment with a competitor is permissible would also be useful, as would one clearly defining what constitutes “solicitation” of either customers or employees. The precise contours of legislative action is far less important, in this writer’s view, at least, than is the creation of a new statute that clearly defines what employers can do with noncompetition agreements and what they cannot.