The Massachusetts House and Senate ended their session without agreeing to a compromise bill to alter Massachusetts law regarding non-compete agreements. As discussed in an earlier post, available here, the House and Senate introduced competing bills that were similar in many respects, but that contained differences that needed to be resolved before a compromise bill could be submitted to Governor Baker. It appears that the main stumbling block was the “garden leave” requirement. The Senate’s bill required 100% pay during the noncompete period, while the House sought to require only 50% pay or other consideration to which the parties mutually agree. The legislature will have to start the process all over again when it reconvenes in January.
Overall, this development (or lack of development) must be considered good news for many Massachusetts employers who want to know that these agreements –which they view as critical to protecting their confidential information and customer good will– are enforceable. However, this may be just a respite in an on-going legislative battle.
Prince Lobel will continue to monitor this situation when the Legislature reconvenes and will provide updates on any new legislative initiatives to limit non-competition agreements.
If you have any questions about the information presented here, or have any employment law concerns, please contact Daniel S. Tarlow, chair of the firm’s Employment Group Practice at 617 456 8013 or [email protected].