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Round Up of Noncompete Reform Coming to New England
Noncompete reform is taking over the country as more and more states – including four in New England – are making the decision to enact new laws restricting the use of noncompetition agreements by employers. Maine, New Hampshire, and Rhode Island all recently passed legislation that is expected to take effect soon, and a similar bill is pending in Vermont as well. Dates of note include:
- In June 2019, Maine’s governor signed into law LD 733: An Act To Promote Keeping Workers in Maine. This new law took effect September 18, 2019.
- On July 11, 2019, New Hampshire’s governor signed S.B. 197 into law, which amends New Hampshire’s previous statute governing the use of noncompetition agreements. The amended law took effect on September 8, 2019.
- On July 15, 2019, Rhode Island’s governor signed RI H6019 – the Rhode Island Noncompetition Agreement Act, which will go into effect on January 1, 2020.
- In January 2019, H.1 was introduced in the Vermont legislature. The bill was referred to the Vermont House Committee on Commerce and Economic Development, where it remains as of today.
Noncompete reform is gaining popularity, with more states likely to join in soon. Similar legislation has been proposed on the federal level as well, although the current federal bill, the Federal Freedom to Compete Act, has not gained much support yet and is currently sitting in the Senate Health, Education, Labor, and Pensions Committee.
Our Employment Law Alert explains the full extent of the bills and how they may affect you.
Will We See Non-Compete Reform Enacted This Year?
For the past eight years, legislative efforts to reform 
post-employment noncompetion agreements in Massachusetts have failed. But this year, House Speaker Robert A. DeLeo has signaled his support for H. 4323 and there is buzz that a non-compete bill may
land on Gov. Baker’s desk before the legislative session ends in July.
This bill entitled, “Massachusetts Noncompetition Act” has eight key components in order for a noncompetition agreement to be valid and enforceable. If H. 4323 is enacted, employers will have to quickly and carefully revise their employee restrictive agreements to comply with the new law.
Read the full post here.
Court Broadly Interprets Ban on Physician Noncompetition Restrictions
In a recent decision, a Massachusetts trial court judge decided that a medical practice could not enforce noncompetition and patient nonsolicitation provisions contained in both an employment agreement and an asset purchase agreement against a physician. This case is the first reported instance where a Massachusetts court has voided such restrictions in an asset purchase agreement.
To read the full article by Scott Connolly.
Proposed Noncompete Legislation Filed in Massachusetts
By: Robert M. Shea
Several bills that would restrict the use of noncompete agreements were filed in the Massachusetts legislature in January. Two bills (H.730 and H.2157) filed by Rep. Angelo Puppolo and Rep. Sheila Harrington, respectively, use language similar to the California law that bans most employee noncompetes (as well as nonsolicitation agreements) but permits nondisclosure agreements.
Three other bills take a more limited approach. Two bills (H.2332 and S.809) filed by Rep. Lori Erlich and Sen. Will Brownsberger, respectively, are identical to each other and use language similar to that proposed by Governor Patrick last year. These bills are focused on noncompete agreements and do not seek to ban customer (or employee) nonsolicitation agreements or nondisclosure agreements. The bills also would not affect noncompete agreements already in place (that is, the law would not apply retroactively). Another bill (S.334) filed by Sen. Jason Lewis uses almost the same language but would apply retroactively. A sixth bill (H.709) filed by Rep. Garrett Lewis, uses similar language but could be interpreted as barring not just noncompete agreements but all employee restrictive covenant agreements. It would also apply retroactively.
We will keep clients updated on the proposed legislation. In the meantime, please feel free to contact the Employment Law team with any questions.
Massachusetts Employment Law Blog 