Governor Patrick Administration Supports “Outright Elimination” of Non-Compete Agreement Enforceability
In testimony before the Joint Committee on Labor and Workforce Department on September 10, Gregory Bialecki, Governor Deval Patrick’s Secretary of Housing and Economic Development, stated that the Patrick Administration now supports the outright elimination of the enforceability of non-competition agreements in Massachusetts. Secretary Bialecki stated that a ban on non-competes should be combined with the adoption of the Uniform Trade Secrets Act (“UTSA”) to protect against the potential loss or disclosure of proprietary information by departing employees.
Secretary Bialecki testified that Massachusetts “should do everything it can to (1) retain talented entrepreneurs; (2) support individual career growth and flexibility; and (3) encourage new innovative businesses that are the engines of economic growth.” According to Bialecki, non-competes “stifle movement and inhibit competition” and, as a result, “we are not seeing the kind of spin-offs and start-ups at the same rate that previously made Massachusetts an enviable model.”
Secretary Bialecki testified that Massachusetts should adopt the USTA, as 47 other states have done. He said that the UTSA “and other tools protect an employer’s trade secrets and proprietary information,” and that, “[e]ven without non-compete agreements, companies still have a disproportionate ability to litigate against the individual.”
There are three pending non-compete bills before the Massachusetts legislature. Two bills would create a presumption that non-competes lasting more than 6 months are unenforceable. One bill would ban non-competes in Massachusetts altogether. At this point, however, any legislative effort to restrict the use of non-competes faces a tough battle. Still, the Patrick Administration’s decision to support a ban on non-competes may be a turning point in the debate.
You may contact a member of MBBP’s Employment Law Group for more information.