Legislators Work to Revive Noncompetition Law

Recent reports suggest that Massachusetts legislators are continuing to work on a compromise noncompetition law that will garner enough support to become law. Earlier this year, both the House and Senate passed versions of a proposed statute that would have imposed rules on noncompetition agreements, which are currently governed by judges without direction from a formal statute. Because the House and Senate could not reach a compromise over differences in the bills each passed, the proposed statute died with the end of the legislative session on July 31, 2016.

Indications are that, this and other failures notwithstanding, Massachusetts will soon enact a law to govern the uses of noncompetition agreements. Among the provisions now being discussed are ones that would require advance notice to employees, limit the duration and applicability of restrictive covenants, and require employers to continue to pay some portion of a former employee’s salary as a condition to enforcement. If no deal is reached informally this month, legislation will almost certainly be reintroduced when the House and Senate reconvene in January 2017. Any bill they pass must, of course, be signed by the governor.