More on “Material Change” and Legislative Update

The “material change” defense is clearly the issue du jour in the world of Massachusetts noncompete law. This week the Boston Business Journal devoted a front page piece largely to this topic, under the headline that noncompetes are “getting harder to enforce.” Earlier this month, my colleague and fellow blogger, Brian Bialas, expanded on the topic (among others) in analyzing a particularly interesting recent court decision in the Massachusetts Lawyers Journal. Although the case law continues to evolve and the contours of the defense are still uncertain, all of this discussion points to some basic points:

  • Any employer seeking to enforce a noncompete or non-solicitation provision should consider the potential applicability of this defense before bringing suit.
  • Employers need to be thinking proactively and strategically about how to avoid this potential pitfall with respect to long-time employees whose jobs change over time. Employers should consider including in their agreements a clause stating that the agreement remains in effect even if the employee’s job (including salary, position, and responsibilities) later changes. And, employers should carefully consider whether it is appropriate to require employees to sign a new agreement in connection with a significant job change.

One separate note concerning the proposed legislative reform of noncompete law in Massachusetts: the Joint Committee on Labor and Workforce Development will be considering the various pending noncompete bills (described here) at the Massachusetts State House on Tuesday, September 10, 2013, starting at 10:00 am. Any member of the public may testify.