Mass House Votes to Pass Noncompete Reform Bill

By Andrew P. Botti

Last week the Massachusetts House of Representatives voted 149-0 to change the long-standing common law concerning non-compete agreements. The bill voted on – HO 4434 – requires employers to pay 50 percent of a former employee’s salary during the non-compete period, or “other mutually-agreed upon consideration between the employer and the employee.” This 50 percent formulation – and the required payment for a non-compete “sit-it-out” period – does not exist in any other state. The bill also prohibits non-compete enforcement against “employees that have been terminated without cause or laid off[.]” The maximum restriction period is 12 months.

While the passage of HO 4434 does not yet make the bill law, the unanimous vote in favor does not augur well for those who would prefer to keep the present law as it currently exists, i.e., common law recognizing the importance of a private contract between private parties. The Senate has yet to act on the formulation set forth in HO 4434, thus no final formulation has landed on the Governor’s desk for review.

“What’s Yours is Mine and What’s Mine is Mine” – The Defend Trade Secrets Act of 2016

Defend the Trade Secrets Act

Defend Trade Secrets Act of 2016

By Andrew P. Botti

General Provisions
On May 11, 2016, President Obama signed into law amendments to the Economic Espionage Act, 18 USC §1832 et seq. which added a civil component to what was formerly a federal crime, i.e., the theft of trade secrets. The new law – known popularly as the “Defend Trade Secrets Act of 2016” – authorizes a federal private right of action which carries with it a big stick – or perhaps more accurately – a big hand! The Act authorizes the seizure of property consisting of misappropriated trade secrets by federal law enforcement officials under the auspices of the United States District Court.  The Act defines “misappropriation” as the acquiring of a trade secret by a person who knows the trade secret was acquired by improper means, i.e, theft, bribery, misrepresentation, or electronic espionage. The Act also defines misappropriation as the disclosure or use of another’s trade secret without consent by a person who used improper means to acquire knowledge of the trade secret.

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