Noncompetition Agreement Legislation Appears No Closer to Passage in Massachusetts

The effort to regulate the use of noncompetition agreements continues to languish in a legislative committee, where most of several competing proposals were referred early in 2017. Alongside them – or, as it were, within the same proposed bills – sits the uniform trade secrets act, a law aimed at protecting the advantage businesses enjoy from confidential trade information.

No fewer than six bills are now being considered by the Massachusetts Legislature’s joint committee on labor and workforce development. One proposed law would void restrictions on post-employment competition contained in written employment agreements while permitting limitations on solicitation of customers or employees in those same contracts to be enforced. Another would permit noncompetition agreements under specifically prescribed conditions, including 10-day advance notice for employees, opportunities to consult with counsel, and payment of wages during any restricted period of time. Some versions of the proposed law would ban noncompetes for lower level workers and limit them to time periods of between three and 12 months. Two bills require renewal of noncompetition agreements at regular intervals, and some permit enforcement of them only in the county where an employee resides.

It’s unclear whether or when the state Senate and House of Representatives will agree on and pass a version of noncompetition legislation or, if they ever do, whether the governor will sign it into law. Given the long history of failed efforts to ban these contracts, it seems most likely that, if any legislation is ever to become law, it will impose conditions on noncompetition agreements while permitting businesses to continue to enforce them where they are essential. Such enforcement might very well require that employers pay at least a portion of the wages their former workers will lose as a consequence of a noncompetition restriction.