Do non-compete laws in Massachusetts strike a fair balance for employers and employees?

The debate over a possible ban of non-compete agreements in Massachusetts has flared up again in the Legislature. Lawmakers are considering whether current law strikes a fair balance between protecting employers’ trade secrets and ensuring that employees have reasonable opportunities to change jobs, start new companies and innovate.

Lawmakers recently heard arguments over five bills that would severely restrict the use of or altogether ban non-compete agreements in Massachusetts. So far, only a few states have taken such measures.

The debate has largely taken place in the technology industry, where many businesses argue that non-competes are necessary to protect intellectual property, business strategies and investments in employee training. Other companies, mainly start-ups and smaller businesses, say that existing non-compete laws stifle innovation and make it difficult to recruit talent.

One thing that both sides of the debate should keep in mind is that employment contracts are negotiable. Whether you’re dealing with a non-compete, non-disclosure or non-solicitation agreement, don’t hesitate to seek legal advice about your options.

The reality is that, in some cases, non-compete agreements are too restrictive, or a covenant has been made invalid by a material change in employment.

In other cases, restrictive covenants are practical and necessary to protect confidential information such as data, internal business practices and trade secrets.

For more on these matters, please see Seder & Chandler LLP’s overview of non-competes and employment contracts.

A recent article in Wicked Local has more on the proposals recently heard by the Joint Committee on Labor and Workforce Development.