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MA Legislature Excludes Non-Compete Provisions From Economic Development Bill

Business owners concerned about the invalidation of prior, existing and future non-compete {contracts, agreements, provisions} can relax, for now. But the threat of elimination of non-competes is still very much an ongoing reality.

Beware of Changing Non-Compete Laws

You may recall that this past spring Massachusetts Governor Deval Patrick had proposed a law that would have mostly invalidated non-compete {contracts, agreements, provisions}, especially in the technology and life sciences industries. The elimination of non-compete {contracts, agreements, provisions} was to accompany the adoption of the Uniform Trade Secrets Act (“UTSA”), which 48 other states, including California, have already adopted. The Governor’s proposal would have also retroactively invalidated those non-compete {contracts, agreements, provisions}.

The Governor’s bill was incorporated into an economic development bill brought before the Massachusetts Legislature. However, this week, on the final day of the General Court session, Legislators passed the bill but not before they excluded the Governor’s proposal to restrict non-compete {contracts, agreements, provisions} from it.

Over the years, other attempts to restrict or outright ban non-compete {contracts, agreements, provisions} have been tried and failed. BUSINESS OWNERS BEWARE, though, as this appears to be only a temporary victory.  Senator William N. Brownsberger said that statutory restrictions on non-compete {contracts, agreements, provisions} are far from being dead. Brownsberger has proposed statutory restrictions that would impose restrictions on the duration of non-compete {contracts, agreements, provisions} and an all-out ban on non-competes for hourly wage employees.

Business owners should be sure to stay on top of this issue because you may someday find that the non-compete {contracts, agreements, provisions} you have used in the past are useless, leaving your business exposed. The adoption and implementation of the UTSA will give business owners other avenues to protect confidential, proprietary and trade-secret-type information, but employment and related contracts (whether executed at the start of, during or end of the employment relationship) will require significant revision to accord with any new statute on this issue.

In practice, every business owner should have employees and independent contractors execute {contacts, agreements} that clearly state the terms of the relationship, the obligations of each party, as well as the restrictions on employment and disclosure of information during and after the employment / contractor relationship.

THE JACOBS LAW | Your Attorneys for Employment, Non-Disclosure / Confidentiality & Non-Compete {Contracts, Agreements, Provisions}

A Business {Attorney, Lawyer} at The Jacobs Law LLC can assist your business with information on this issue or to obtain customized employment {contracts, agreements}, non-compete {contracts, agreements, provisions}, and non-disclosure / confidentiality {contracts, agreements, provisions}. Our Business {Attorneys, Lawyers} have experience advising, drafting and litigating these types of contracts. Contact a Boston Business {Lawyer, Attorney} at The Jacobs Law LLC today!

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