Nearly five years ago, the Massachusetts Noncompetition Agreement Act (“MNAA”, also sometimes abbreviated as the “MNCA”) went into effect. That statute ushered in new requirements for non-competes in the Bay State (including not only residents of Massachusetts, but also those who are merely employed in Massachusetts). Among the MNAA’s requirements is a forum selection provision that purports to require civil suits related to non-competes to be brought exclusively in the county in which the employee resides, or if both parties agree, in Suffolk county in Massachusetts.
Despite being in effect for nearly a half-decade, there have been relatively few published cases interpreting the MNAA (see here and here for a synopsis of a couple of those cases). Recently, however, a federal judge in Virginia weighed in on the statute’s forum requirement, determining that a suit against a Massachusetts employee could proceed in federal court in the Eastern District of Virginia, rather than be dismissed and re-filed in Massachusetts.
In Hilb Group of New England, LLC v. LePage, the court observed that the employee, Susan LePage, had worked for the plaintiff or its predecessor as an insurance account executive for more than 20 years in Massachusetts. Upon Hilb’s acquisition of her former employer in 2019 (after the MNAA’s effective date), LePage was required to sign a new restrictive covenants agreement in Hilb’s favor. Two years later, she resigned and began selling competing products, likely aided by customer information that she had emailed to her personal email account (including contact information, revenue figures, and other details of Hilb accounts that LePage had serviced). Hilb then sued LePage in federal court in Virginia for breach of the agreement, misappropriation, and other claims. Notably, despite LePage being a Massachusetts employee, the agreement designated Virginia state and federal courts as the exclusive forum for any suit related to the agreement, although it simultaneously designated Massachusetts law as controlling.
In response to the suit, LePage moved to dismiss, arguing among other reasons that under the MNAA, Massachusetts is the only appropriate forum for the suit. The court disagreed, noting that the Supreme Court in M/S Bremen v. Zapata Off-Shore Co. (The Bremen), 407 U.S. 1 (1972), had announced a policy of enforcing forum selection clauses except where it would be “unreasonable” to do so. Such a clause is unreasonable, the court noted, where its enforcement would “contravene a strong public policy of the forum state” (among other things). Despite the MNAA’s purported requirement that Massachusetts be the exclusive forum for litigation, and despite the fact that the agreement specifically designated Massachusetts law as controlling, the court reiterated that federal law preempts Massachusetts’ procedural rules. Moreover, the court held that the presumption of enforceability for forum selection clauses announced in The Bremen was not weakened by Massachusetts’s apparent disfavor for foreign forum selection clauses, and that allowing Massachusetts law to trump the federal policy in favor of enforcement of forum selection clauses would “allow provincial attitudes to dominate.” Finally, the court observed that to date, no Massachusetts court has determined that the MNAA evinces a “strong public policy” of the Commonwealth that would require enforcement of the statute’s forum selection provision over the contractually agreed-upon Virginia forum clause.
Tellingly, another federal court issued a similar opinion just a few days ago. In Onward Search LLC v. Noble, a judge in the District of Connecticut shot down a Massachusetts resident’s similar argument that a lawsuit arising out of his alleged violations of restrictive covenants should be dismissed. In that case, the contract designated Connecticut law as controlling (not Massachusetts law, as was the case in LePage). The court agreed with the employer that the Connecticut choice-of-law provision was enforceable, and that Connecticut was the appropriate forum for the litigation, notwithstanding that the employee was a Massachusetts resident. Like the LePage court, the Noble court held that federal law determines whether a mandatory forum selected in a contract is enforceable, and likewise held that the MNAA could not overrule the parties’ chosen law.
Notably, the policy in favor of enforcement of forum selection clauses announced in The Bremen (and reiterated in both LePage and Noble) only applies in federal cases, so it remains unclear whether a foreign state court would permit litigation to proceed against a Massachusetts employee in the face of the MNAA forum selection requirement, or if such a court would dismiss the case to be heard in Massachusetts. However, based on the LePage and Noble cases, employers may have luck enforcing a foreign forum selection clause against Massachusetts employees, notwithstanding the statute’s requirements (and even where Massachusetts law applies). Where there is no fee-shifting or other financial penalty under the statute for failure to comply with the MNAA (unlike in some other states such as Washington and Illinois), foreign employers still relying upon out of state forum clauses may hope that courts outside of the Commonwealth will take the same approach as the LePage and Noble courts.