Last summer was a busy time for legislators in Massachusetts mulling over non-compete reform. As we reported here and here, several competing bills were in play as the legislative session drew to a close, including a compromise bill that was passed in the state Senate but ultimately failed to advance in the House. You may even recall that then-Governor Deval Patrick introduced a bill that would have banned all non-compete agreements in Massachusetts, with a few very limited exceptions, which also failed to go anywhere. In keeping with what appears to have become a perennial tradition in Massachusetts, the legislative session ended with a whimper, at least with respect to non-compete reform, although Governor Patrick introduced a watered-down version after the legislative session ended, which also stalled.
Fast forward nearly a year, and the subject of non-compete reform (and the adoption of the Uniform Trade Secrets Act, which was also a hot topic last year) is largely absent from the halls of the statehouse, with none of the pending bills having even made it to a committee hearing. Many see this relative silence as a function of Governor Charlie Baker’s (presumed) more moderate stance on non-competes as compared to his predecessor, who was a staunch advocate of doing away with non-competes altogether. Indeed, much like his fellow candidates at the time, Governor Baker was relatively tight-lipped during his campaign on the topic of non-competes.
As reported by Massachusetts Lawyers Weekly (password required), Governor Baker has made two appointments recently that have observers pondering whether he is in fact opposed to non-compete reform. First, shortly after the election, Governor Baker appointed attorney Andrew P. Botti to his transition team subcommittee on jobs and the economy. Botti has been an outspoken critic of then-Governor Patrick’s bill proposing to ban non-competes in the Commonwealth, largely on behalf of the Smaller Business Association of New England.
More recently, and perhaps more significantly, in April, Governor Baker appointed Paul T. Dacier, the executive vice president and general counsel of EMC Corporation, to be the chairman of Baker’s Judicial Nominating Commission. EMC has earned a reputation as being a strong supporter of non-compete agreements, and as those familiar with some of the leading non-compete cases in Massachusetts know, EMC has frequently sought to enforce its non-compete agreements in the courts. Some have speculated that Governor Baker’s appointment of Dacier is a sign that the governor is directly opposed to non-compete reform.
Not surprisingly, those in Governor Baker’s camp have denied that these appointments have any hidden meaning, with Botti pointing to Governor Baker’s desire to tackle more urgent issues, such as the performance of the MBTA during this year’s record-breaking winter and the state budget. Even supporters of non-compete reform, such as Representative Lori Ehrlich, have largely attributed the lack of progress to disagreements between the state House of Representatives and Senate regarding committee rules, not lack of support from the Governor’s Office. However, Rep. Ehrlich did note that Dacier’s appointment “is certainly a concern.”
So, as we head into the dog days of summer (most welcome after the winter), it appears that non-compete reform is not at the top of the legislative agenda in Massachusetts. As always, we will keep you informed of any significant developments.