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.

Equal Pay May Be Coming Your Way: Mass House Votes to Approve Bill to Establish Pay Equity

By Andrew P. Botti

In a 158-0 vote, the Massachusetts House of Representatives voted to approve the so-called Pay Equity Act. The Act makes it unlawful for any employer to discriminate “in any way on the basis of gender in the payment of wages,” or to pay someone of a different gender less for comparable work. The term “comparable work” is defined as work which requires substantially similar “skill, effort and responsibility,” and is performed under similar working conditions. These somewhat fuzzy concepts may present substantial liabilities to the unwary employer.

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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.

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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.