Marc McGovern, the mayor of Cambridge, Massachusetts (home to many of the Commonwealth’s established and emerging pharmaceutical, biotech, and other life sciences companies), published an op-ed in the Boston Globe regarding the noncompete reform movement in Massachusetts (about which we have previously reported). Unsurprisingly, given that Cambridge has been referred to as the “People’s Republic of Cambridge,” Mayor McGovern comes out strongly in favor of severe restrictions on the use of employee noncompete agreements, stating, among other things, that “noncompetes are unfair to employees.” Among other things, Mayor McGovern proposes that noncompete agreements be banned outright, or at least severely limited; and if the latter, that employers be required to pay 100% of the employee’s salary during the restricted period (known as “garden leave” pay). In his words:
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Noncompete agreements should be banned outright or limited to not more than a three- to six-month period. The current bill allows them for one year — with additional wiggle room for employers — too long for many to live without pay.
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During a reduced enforcement period, employers should pay 100 percent of the employee’s salary. The bill shouldn’t allow employers to significantly undercut this amount in negotiations stacked to their favor.
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Arguably the worst feature of the bill is that it seems to allow judges to redefine noncompetes to prohibit employees from working for other companies in the field, even if the employee did not sign one. Courts would also be allowed to rewrite restrictions they find too onerous, rather than just ruling them invalid, as is currently practiced. This workaround would incentivize companies to write overly broad noncompetes and places the burden on an employee to take the company to court for relief, and should be curtailed.
Of course, Mayor McGovern is incorrect that the current practice in Massachusetts courts is to invalidate overbroad noncompete restrictions rather than “rewrite” (or “reform”) them, but his point is clear: Just like in California, Massachusetts employers should not be able to restrict an employee’s right to work for a competitor. This position is unlikely to be adopted by the Massachusetts legislature, which has been working on legislation for the last decade, but a compromise bill is in the works (our friend Russell Beck has a great synopsis of the current bill before the legislature) and, who knows, maybe 2018 will finally be the year for noncompete reform in Massachusetts. We will keep you posted on any updates.
