Non-Competes May Become a Thing of the Past Across the Nation

By: Andrew P. Botti 

On July 9, 2021, President Biden signed an Executive Order which directed the Federal Trade Commission to curtail the use of non-competes nation-wide in order to help promote competition and expand the economy. At the moment, only three states forbid the use of non-compete clauses in employment agreements: California, North Dakota and Oklahoma. Nearly one dozen states – including Massachusetts – have put tough restrictions on the use and enforcement of non-compete agreements irrespective of which employees are required to sign same.

To read the full article, click here.

The Law of Noncompetition in Massachusetts has Undergone a Sea Change

By: Andrew P. Botti 

As of October 1, 2018 the noncompetition law of Massachusetts changed dramatically with the passage of G.L. 149, §24L.  The new statute provides a series of detailed requirements and qualifiers which are now “must haves” for non-compete agreements to be enforceable in a Massachusetts Court.

The major changes are as follows:

Continue reading

Noncompete “Reform” Movement Marks the Death of an Era

By Andrew P. Botti

As published in the Boston Business Journal (7/26/2018)

I have been practicing law for nearly 30 years and have handled a variety of noncompete cases in our Superior Court system.  We are very lucky in Massachusetts to have a fine, well-balanced and thoughtful judiciary.  In my experience, they take the enforcement of noncompetes very seriously, and will not hesitate to reform or change the agreement if they think it is too harsh or unfair to the departing employee.  This has been the case for well over 200 years now.

To read the full article, click here.

Massachusetts Poised to Pass Important Amendments to State Trade Secrets Law

By Nicholas F. Casolaro

As part of its seemingly annual effort to revise or limit the scope of non-competition agreements in Massachusetts, the legislature has introduced a bill for 2018 that would not only change existing non-competition agreement law but also make significant changes to Massachusetts law on trade secrets.

The bill, titled “An Act Relative to the Judicial Enforcement of Noncompetition Agreements,” is likely to pass and would become effective October 1, 2018.  The new law would apply to misappropriation of trade secrets claims that arise after the effective date.  The bill eliminates the existing limited statutory law on trade secrets claims and would effectively enact a version of the Uniform Trade Secrets Act, putting Massachusetts in line with the vast majority of states that have some version of the UTSA.

The most-significant change that the bill would make to existing law is the definition of “trade secret.”  The proposed bill contains a narrow list of categories of information or tangible things that would constitute a trade secret.  Specifically, trade secret is defined under the bill as information or things such as “a formula, pattern, compilation, program, device, method, technique, process, business strategy, customer list, invention, or scientific, technical, financial or customer data.”

The bill omits things like designs, prototypes, procedures, software code, and the catch-all category of “other business information.”  The key takeaway is that this bill will undoubtedly make it harder for businesses, employers, or trade secret owners to prove that something is in fact a trade secret.  Trade secret litigation is difficult enough under existing law.  Plaintiffs will now face an even tougher standard to successfully prove that something is a trade secret in court.

The other effect of this bill if it passes is that Massachusetts will have a different definition of trade secrets than the Federal Defend Trade Secrets Act, which was enacted in 2016.  The Federal statute has a much more detailed and comprehensive list of information or data that may constitute a trade secret.  Thus, if a business is uncertain whether its information or data meets the definition of trade secret under the new Massachusetts state law, it will have to consider whether the information or data meets the broader definition of trade secret under the Federal law.  This could lead to an increase in lawsuits filed in federal court in Massachusetts alleging violations of the Federal Defend Trade Secrets Act.

Legislature Fails to Reach Compromise on Non-Compete Bill

By Andrew P. Botti

Although burning the midnight oil last night, a Joint Conference Committee failed to reach agreement on a compromise bill by the established deadline of midnight, July 31.

Among other differences, the House and Senate versions of so-called non-compete reform contained very different “garden leave” provisions.

The House version required 50% pay for a one year “sit it out” period, while the Senate version required 100% pay for a maximum 3 month non-compete period. The House version also allowed the parties to come up with another form of acceptable consideration to support the non-compete period.

The Governor indicated that he favored the House version of the proposed reform.

At this point, the issue of non-compete reform is off the table until January 2017, the start of the next legislative session on Beacon Hill.

Governor Puts Imprimatur on House Version of Non-Compete Bill

Joint Letter Image

Click the image above to read the joint letter from various Massachusetts businesses supporting H.4434 and objecting to S.2418.

By Andrew P. Botti

On Friday, July 22, 2016, the Governor’s office released the following statement concerning the various legislative reform bills recently promulgated by Beacon Hill lawmakers:

“The Governor favors the House version of the non-compete legislation because he believes it better balances workers’ abilities to seek new employment while ensuring cutting edge businesses can protect essential intellectual property. Finding the right compromise on this issue is essential to ensuring innovative businesses want to stay and grow in the Commonwealth.”

Continue reading

Dodging the Bullet When Market Matters: Salesman Avoids Full Enforcement of Non-Competition Agreement with Ex-Employer

By Andrew P. Botti

A recent case out of the Superior Court Business Litigation session in Boston illustrates the Court’s inherent power – when sitting in equity – to fashion an injunction which appears fair to all parties, given the circumstances of the case. In Simplivity Corporation v. Hofdahl, the Plaintiff corporation attempted to stop an ex-salesman from working for a company which had developed a similar high tech software product. The salesman had signed a “Proprietary Information and Inventions Agreement” which, among other things, prohibited him for one year after termination of employment, from:

Continue reading

When It Comes to Protecting Your Business, In a Sea of Change There Remain Steadfast Legal Mechanisms Which May Yet Work

By Andrew P. Botti

The recent activity in the Massachusetts House indicates that changes to the long-standing law of non-competes may be imminent. Despite what may occur on Beacon Hill, there remain a variety of ways that businesses may protect their proprietary information. Even before non-competes became fashionable, intellectual property rights were recognized and secured in the United States Constitution. Article I, Section 8, Clause 8 expressly provides: “The Congress shall have the Power …To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive right to their respective Writings and Discoveries.” Thus, both copyrights and rights to inventions are recognized as fundamental Constitutional concepts.

Continue reading