It finally happened. After years of debate on Beacon Hill, Massachusetts law makers agreed to reform the Commonwealth’s treatment of noncompetition agreements. Among other things, the bill precludes enforcement of noncompetition agreements against non-exempt employees, limits their length to just 12 months, and precludes the use of “continued employment” as acceptable consideration. If signed by the Governor, the bill will apply to agreements entered into on or after October 1, 2018.
It is clearly important for employers to do their level best to draft enforceable restrictive covenants, but the fact of the matter is that some judges are going to invalidate them no matter what. Companies should not feel compelled to modify their contract every time a new opinion comes out by another trial court with a creative reason supporting the court's desire to find the contract unenforceable.
February 2013 was an active month in the world of non-competes and trade secrets, and if we read the tea leaves, it looks like things are only going to get busier.
After an unsuccessful attempt in 2010, a new and updated non-compete bill has been introduced in the Massachusetts legislature.
As 2011 rolls upon us, five non-compete and trade secret issues are likely to share the spotlight in the coming year. Keep an eye out for judicial and legislative action in Texas, California, Massachusetts on state-specific issues. Federal Courts are likely to adress the Computer Fraud & Abuse Act. And online social media is going to become a routine part of departing employee case law.
State information security laws that protect personal information are not going away. If anything, they are becoming more commonplace and stringent.