Scott Kirsner of the Boston Globe has an excellent post today about employee non-competes.
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Read the blog post & endorsement here.
A bill entitled “An Act to Prohibit Restrictive Employment Covenants,” House Bill Number 1794 (bill text and two-page fact sheet), has been filed on January 12, 2009 (186th General Court of the Commonwealth of Massachusetts) to prohibit noncompete contracts between employers and employees. The lead sponsors are Representative William N. Brownsberger and Senator Patricia D. Jehlen. The bill has been referred to the Joint Committee on Labor and Workforce Development. For more information, please contact Rep. Will Brownsberger or info@ProhibitRestrictiveEmploymentCovenants.net.
Please join and/or spread the word to attend this important upcoming event hosted by the Boston Bar Association.
Name: A Symposium on Bills Affecting Employee Non-Compete Agreements
Date: Wednesday, July 22, 2009
Time: 4:00 PM
A Symposium on Bills Affecting Employee Non-Compete Agreements
It is argued that employee non-compete agreements have chilled the spawning of new enterprises in Massachusetts compared to California where such agreements are generally unenforceable under a statute first enacted in 1872. It is countered that businesses large and small need these agreements enforced to protect their investments and that failure to do so will give rise to protracted trade secret litigation.
State Representative William N. Brownsberger, with 25 co-sponsors, filed H. 1794, which would institute a rule similar to the California statute. http://www.mass.gov/legis/bills/house/186/ht01pdf/ht01794.pdf
State Representative Lori Ehrlich, with seven co-sponsors, filed H. 1799, which would require, among other things, establish minimum thresholds for the enforceability of noncompetes, including advance notice of noncompetes to new employees, and provide a presumption of enforceability where “garden leave” compensation is paid to certain employees restricted by non-competition agreements. http://www.mass.gov/legis/bills/house/186/ht01pdf/ht01799.pdf
Under Anglo-American common law, servitudes were disfavored and non-competition agreements were enforceable only to protect goodwill in the sale of a business or trade secrets. Massachusetts has extended enforceability to protect “confidential information” that does not meet the restrictive requirements for a trade secret under the 1939 Restatement of Torts. The Massachusetts Uniform Law Commission filed H. 87, and State Representative Daniel E. Bosley and State Senator John A. Hart, Jr., filed H. 329, which would expand Massachusetts protection for trade secrets as more broadly defined under the Uniform Trade Secrets Act adopted by 45 other states and the District of Columbia. http://www.mass.gov/legis/bills/house/186/ht00pdf/ht00329.pdf
Please join proponents of these bills and the alternative status quo in a discussion of law and policy:
William N. Brownsberger, Esq., Sponsor of H. 1794
Russell Beck, Esq., Foley & Lardner, LLP, Drafter of H. 1799
Stephen Y. Chow, Esq., Burns & Levinson LLP, Massachusetts Uniform Law Commission, Drafter of H. 87, Symposium organizer
Michael L. Rosen, Esq., Foley Hoag LLP, Author of the Massachusetts Noncompete Law Blog, Speaking for the status quo
Hon. Gordon L. Doerfer (Ret.), JAMS, Moderator
Dr. Matthew Marx, MIT Sloan School, Investigator on longitudinal study of electrical engineer parties to non-compete agreements
We will also be joined by Mr. Scott Kirsner, “Innovation Economy” columnist, Boston Globe, who recently wrote on this issue. See
Full details and sign up information here.
Scott Kirsner at the Boston Globe wrote a great piece on employee non-competes.
StorageMojo has a great post about the problems with non-competes. Check it out here.
Boston’s Spark Capital came out publicly today in favor of Massachusetts House Bill 1794, which would outlaw non-compete agreements in employment contracts in the state. The venture firm has been vocal on the issue for some time—its partners helped found theAlliance for Open Competition and sent Governor Deval Patrick an open letter opposing non-compete clauses in 2007—so it’s no surprise to see Spark backing the new bill, filed by State Representative Will Brownsberger in January.