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.