MA Legislature Again Fails to Pass Noncompetition Law

Though it was closer this time, there’s no solace for those hoping to finally see noncompetition legislation in Massachusetts. Despite passing two bills that would have brought clear rules to this area of law, hopes were dashed this week when the House and Senate were unable to bridge differences in their versions of the proposed law. Because they could not reach a compromise by July 31, the legislation will need to be introduced anew and start the legal process over again in 2017.

The legislative failure leaves noncompetition law a matter of judicial discretion. Under current rules, employers can enforce reasonable restrictive covenants that are part of valid written agreements. They can only do so, however, if they have legitimate business interests to protect. The most common enforcement strategy is to commence litigation seeking an injunction that bars former employees from violating contractual terms. The fact-specific nature of such litigation means that suits are normally argued in court and outcomes are uncertain. The result, of course, is often expensive litigation.

The House and Senate bills sought to bring clarity to noncompetition issues. For details on their specific terms, see the July 8 and July 20 posts on this page.