July 2025
Background
A common concern for employers is that employees who work with the company’s customers or clients will build close relationships that increase the risk that, if the employee leaves the company, the customer may go with them. Historically, the way to address this issue was to require the employee to sign a non-competition or non-solicitation agreement. The former prohibits the employee from working for a competitor of the employer, typically in a specific geographic area. The latter prohibits the employee from soliciting business from existing clients or customers of the employer, and therefore is less onerous than a non-compete.
Non-competition agreements have fallen out of favor in many states, which have put significant restrictions on them since they inhibit the ability of employees to earn a living. In Massachusetts, those restrictions appear in the Massachusetts Noncompetition Agreement Act (MGL c. 149, section 24L) (the “Noncompete Act”).
Miele v. Foundation Medicine, Inc.
In mid-June 2025, the Massachusetts Supreme Judicial Court ruled that a non-solicitation agreement did not violate the Noncompete Act even when it contained a provision that required forfeiture of benefits if the former employee violated the agreement.
This is an important decision for Massachusetts employers because it provides a means of protecting its valuable commercial relationships in a predictably enforceable manner without having to comply with the more onerous provisions of the Noncompete Act. Nevertheless, non-solicitation agreements need to be carefully drafted to avoid triggering application of the Noncompete Act.
If we can provide any additional information, please contact Bill Miller at wmiller@bizlawma.com.
This memorandum is intended to provide general information of potential interest to clients and others. It does not constitute legal advice. The receipt of this memorandum by any party who is not a current client of the Business Law Group does not create an attorney-client relationship between the recipient and the firm. Under certain circumstances, this memorandum may constitute advertising under the Rules of the Massachusetts Supreme Judicial Court and the bar associations of other states.