In Seyfarth’s fifth installment in its 2018 Trade Secrets Webinar Series, Seyfarth attorneys Kate Perrelli, Erik Weibust, and Dawn Mertineit focused on Massachusetts non-compete and trade secrets reform. At long last, Massachusetts Governor Charlie Baker signed a Non-Compete Reform Bill into law on August 10. The presenters focused on what businesses should understand about the impacts of the changes, what to expect next, and how to safeguard assets and maintain an advantage over competitors.

As a conclusion to this well-received webinar, we compiled a summary of takeaways:

• Non-competes must be limited to one year, but can be extended to two if the employee breaches his or her fiduciary duty or steals company property.
• Must be in writing and signed by both parties; at least 10 days’ notice must be provided to employees/candidates; and the right to counsel must be explicit in the agreement.
• Garden leave is not required.  “Other mutually agreed-upon consideration” is adequate.  But what that means, and whether the court will even assess the adequacy of consideration, is left to the courts to determine.
• Continued employment is no longer sufficient consideration.  Something more, that is “fair and reasonable” must be provided.  Again, what that means is left to the courts to determine.
• Choice of law and venue requirements are likely unenforceable in other states and in federal court.  Nevertheless, comply with the law in case an employee files a declaratory judgment action in Massachusetts.
• Bottom line:  Be clear in your agreements.  All the law really does is establish what must, may, and may not be included in private agreements.

Please join us for a one-hour CLE webinar on Thursday, August 16, 2018, at 1:00 p.m. Eastern / 12:00 p.m. Central / 10:00 a.m. Pacific.

On August 10, Governor Charlie Baker signed a Non-Compete Reform Bill into law. Although the bill largely codifies existing common law, there are some significant changes that companies with employees is Massachusetts should be aware of. Among other things, non-competes may not be enforced against certain types of employees; continued employment will no longer be sufficient consideration for existing employees; any employees subject to non-compete restrictions must be provided with “garden leave” (i.e., 50% of their base pay) during the restricted period, or “other mutually agreed upon consideration” (which is not defined); there are new notification requirements, and agreements with Massachusetts employees purportedly may not apply the laws of other states or mandate venue for lawsuits outside of Massachusetts.

As part of the same overarching economic development bill, Massachusetts has also now joined 48 other states in adopting the Uniform Trade Secrets Act, which will also changes existing law (although without creating nearly as much confusion and uncertainty as the non-compete law).

Understanding the impact of these changes, and what to expect, will help your company safeguard its most valuable assets and maintain its advantage over competitors.  Please join Seyfarth Shaw’s Boston team for an informative webinar on what to expect when this law goes into effect on October 1, 2018.