Given the scarcity of trial court decisions interpreting the Massachusetts Noncompetition Agreement Act, G.L. c. 149, §24L (“MNAA”), I find it worthwhile and helpful to scour those orders and decisions to search for tid bits and take aways that might apply more generally to what are typically very fact specific determinations. A recent such decision was issued out of the Suffolk Superior Court in Misiaszek v. Ferry.
In its order on the Plaintiff’s Emergency Motion for Preliminary Injunction Enjoining Enforcement of Non-Competition Provision (“Non-Comp”), the Court addressed Plaintiff’s request to enjoin her former employer from enforcing the parties’ non-compete provision such that the Plaintiff could start a new job with a competitor. Plaintiff had two main arguments:
- that the garden leave clause in the Company’s Non-Comp did not satisfy the requirements of MNAA, and
- that the Non-Comp violated the MNAA and common law because it was broader than necessary to protect the Defendant Company’s (“Company”) legitimate business interests.
The Court quickly disposed of the first argument finding the reading of the clause “strained” by the Plaintiff.
As to the second prong of her argument, the Court reminds us first that the MNAA provides, consistent with common law, that the non-competition agreement must be no broader than necessary to protect three identified legitimate business interests:
- trade secrets,
- confidential information that does not qualify as a trade secret, and
- the employer’s goodwill.
The Company argued that enforcement of the Non-Comp was necessary to protect the Company’s confidential information. The Plaintiff claimed she did not remember, and did not have any documents that pertained to, Company clients to whom she presented. She also claimed that she did not have substantial involvement with other Company divisions; that she did not have access to the Company’s confidential information that would give her an advantage, or assist her in performing her duties at the new company; that she did not have access to any Company database or platform with such information, including confidential intellectual property; did not have access to sensitive client information, and only knew of three Company clients.
The Plaintiff also provided a written notice of resignation and had previously informed the Company about her new employer and her position. The Company offered her a new position which she declined having already accepted her new offer. The Company notified her of its intention to enforce the Non-Comp and stated that, in addition to protecting its commercial and strategic knowledge, they did so to send a message to hiring firms not to recruit Company employees and to employees not to go to competitors. Plaintiff’s new employer refused to allow her to commence employment until the Non-Comp was found to be invalid and unenforceable or could not be enforced in connection with the Plaintiff’s new position.
The Court was not persuaded by Plaintiff’s arguments and determined that she had not shown a likelihood of proving that the Non-Comp as applied to her does not protect the Company’s confidential information. The Court found persuasive the Company’s assertions that included that Plaintiff had obtained confidential client information including performance, goals, succession plans and other non-public information. The Company claimed that she was involved with multiple clients, meeting with members of their teams and learning confidential information about their goals; had overseen the development of a framework for analyzing proprietary data; had access to Company client lists; created strategic plans and budgets; received confidential reports, and that she had downloaded Company client coaching models to her home email address.
Plaintiff countered by arguing that she did not perform the same services for the Company that she would be providing to her new employer: research versus executive and healthcare services. She focused on her limited client engagement, claiming that, therefore, she did not develop any goodwill with such clients while working for the Company. Finally, she argued that she simply did not remember any of the client information to which she may have been privy.
The Court responded, citing the Plaintiff’s “misapprehension” of the Company’s right to protect its confidential information. With access to the Company’s confidential client and business information there were a myriad of ways that such information might be useful to her in her new position, and a claimed lack of memory cannot defeat enforcement of a valid non-compete agreement. In other words, she cannot simply “unknow” confidential information that she had known at one point in time.
The Court’s focus on the potential general usefulness versus demonstrable use of the confidential information at issue (akin perhaps to an anticipatory breach) is noteworthy. Also of note is its sound rejection of any intent with such prior knowledge or a claimed lack of memory as to the specifics of any such confidential information as a basis to reject the Non-Comp.
Contact an Experienced Employment Law Attorney
If you have any questions about the MNAA and its enforcement, please contact Lonnie Murray and the Employment Law team at Parker Scheer. With more than 20 years of experience in employment law and business litigation, Lonnie can help you understand how the changing legal landscape affects your business and position you for success.
Key Takeaways
- Even with relatively few trial-court decisions interpreting the statute, Massachusetts courts continue to enforce noncompete agreements that comply with the MNAA.
- Confidential information does not need to be actively used to justify enforcement. The Court focused on the potential usefulness of confidential information, not proof that the employee actually used or intended to use it.
- Claimed lack of memory is not a defense. An employee cannot defeat a noncompete by asserting that they no longer remember confidential information they once had access to.
- Access matters more than job title or day-to-day duties. Even if a former employee’s new role is different, prior access to confidential client, strategic, or proprietary information may still support enforcement.
Frequently Asked Questions (FAQs)
What legitimate business interests can a noncompete protect under the MNAA?
The MNAA allows noncompetes to protect only three interests: (1) trade secrets, (2) confidential information that does not rise to the level of a trade secret, and (3) the employer’s goodwill.
Does an employer need to prove that confidential information was actually used?
No. As this decision shows, courts may enforce a noncompete based on the potential usefulness of confidential information the employee had access to.
Can an employee avoid enforcement by claiming they don’t remember the information?
No. Courts have made clear that an employee cannot simply “unknow” confidential information they previously possessed.
Does it matter if the employee’s new job is different from their old one?
It can matter, but it is not dispositive. Even where job duties differ, prior access to confidential client, strategic, or proprietary information may still justify enforcement.
Why are preliminary injunction decisions important in noncompete cases?
Because they often determine whether an employee can start a new job while the case proceeds. Courts focus on likelihood of success and risk of harm at this early stage.
