House Passes Noncompete Reform

Reform Overview

On Wednesday, June 29th, the House passed H. 4434: An Act relative to the judicial enforcement of noncompetition agreements, which includes a number of provisions that have long been discussed as the necessary components of non-compete reform. The bill in its current form restricts the length of the non-compete period to 12 months, unless the employee has breached his or her fiduciary duty to the employer or the employee has stolen property belonging to the employer, in which case the duration may not exceed 2 years. Non-compete agreements can no longer be applied to laid-off employees and a wide range of hourly workers earning up to a certain level of pay. The bill also asserts that to be valid, any noncompetition agreement needs to be in writing and signed, and that employers must provide prior notice so that the employee has the right to consult with counsel before signing.