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Non-Compete Ban Does Not Pass

The Massachusetts Legislative session ended on July 31, 2014 without the passage of a ban or restriction on non-competition agreements. A bill which would have significantly restricted the use of non-competition agreements in employment was approved by the state Senate but in the end, did not pass in the full Legislature. Proponents will probably refile and strongly advocate for non-competition agreement bans or restrictions once the new Legislative session begins. Employers should therefore stay tuned. Particularly because such a bill could well pass in the next year, employers may be well advised to strengthen other kinds of post-employment restrictions such as agreements requiring departed employees not to solicit or accept business from the employer’s customers, and not to use in new employment the employer’s confidential information. Employers may also need to consult legal counsel as to whether their current post-employment restrictive agreements are sufficient to protect their business. For example, employers need to be sure that their restrictive agreements are correctly worded, that all employees from whom the employer needs protection are covered, and that the employer is following all of the correct procedures to ensure that their restrictive agreements are enforceable.