Apparently there may be some life left yet in the Massachusetts Legislature’s attempt to pass non-compete reform this year. As we previously reported, the House and the Senate were unable to bridge their differences and agree on a compromise bill before the formal session wrapped up on July 31.
According to the Boston Business Journal, however, “House and Senate leaders involved in the negotiations that came up just short at the close of formal sessions in July have continued talking, with a White House summit on non-competes serving as a spark plug to rekindle some hope that a compromise could still be brokered.” Among other differences, the Senate bill would have limited non-compete agreements to three months, whereas the House version had a one year limit. Both versions also provided for garden leave clauses, wherein an employee is paid during the restricted period, but the House set the compensation during the garden leave at 50% and the Senate recommended 100%. The major disagreement, however, was over language that would have allowed both the employer and the employee to substitute garden leave pay for a different, mutually agreed upon, arrangement negotiated at the commencement of employment. Even if a compromise deal is reached by the House and the Senate before the end of the year, it may be difficult to get passed in the full Legislature, as a single lawmaker can defeat any bill during an informal session by simply objecting to it.
The Associated Industries of Massachusetts and the Massachusetts High Technology Counsel have both said that they are in favor of something more akin to the House bill.
We will continue to monitor these developments and report back with any updates. It may be that 2016 is the finally year for non-compete reform in Massachusetts after all . . . But we have said that before.