Massachusetts Legislature Considers It’s First Clarification Of Its New Noncompete Law

Earlier this year, Senator Bruce Tarr introduced a bill to address one of the open issues under the new noncompete law.

Specifically, the new noncompete law prohibits the enforcement of noncompetes against (among others) people “terminated without cause.” But “cause” is not defined in the statute. So, questions have arisen about what “cause” means. Does it have the existing (very broad) common law meaning? Does it connote a more colloquial meaning, such as when an employee engages in some type of wrongful conduct? Does it have some entirely different meaning? Or, can the parties define its meaning in their contract?

Enter S.1117 (“An Act relative to clarifying legislative intent regarding the non-competition law”). The bill proposes to amend the Massachusetts Noncompete Act (specifically, GL. c. 149, § 24L(c)(iii)) “by adding, after the words ‘terminated without cause’, the following:- ‘as defined by the parties in the noncompete agreement’.”

Accordingly, if passed, the law would be clarified to permit the parties to define cause as broadly or as narrowly as they wish.