New Year Brings Renewed Efforts to Pass Non-compete Legislation in Massachusetts

Proponents in the Massachusetts Legislature may have lost several battles, but they have not given up the war. Early in the current legislative session, no fewer than six proposed laws to regulate noncompetition agreements were introduced. All were referred to one committee or another, where each is now under review. Given the past history of legislative failure and the varied approaches sponsors are taking in 2017, it’s hard to say whether a law on noncompetition agreements will ever be reported to the House or Senate floor for an up or down vote. If one is, it will likely contain several of the following limitations, each of which appears in one proposed law or another.

• A requirement that noncompetition agreements be written between employers and employees only, and that workers receive them at least 10 business days before beginning a job.
• If a non-compete is signed after employment begins, payment to the employee of something more than continued work.
• Expiration of agreements that are not reviewed and renewed at least every three or five years.
• A limit on restrictive periods to anywhere from 3 months to one year, with exceptions, perhaps, for bad actors that could extend restrictive terms to two years.
• A requirement of formal written notice to employees of an intent to enforce a covenant no later than 10 days after employment ends.
• Limits on classes of workers against which noncompetition agreements can be enforced.
• Rules requiring that employees be paid during any noncompetition period.

One proposal is an outlier and would ban noncompetition agreements altogether. It would not, however, restrict employers from enforcing covenants that restrict solicitation of employees or customers. Neither would it limit non-disclosure agreements, forfeiture agreements, or non-competes that are formed in connection with the sale of a business.