Russell Beck on Noncompete Agreements in Lawyers Weekly

Russell BeckThe June 27, 2016, issue of Massachusetts Lawyers Weekly features Russell Beck in an article titled “Action on non-competes eyed before session’s end.”

The article covers the 8th annual Boston Bar Association symposium on non-compete agreements and trade secrets. Russell Beck was a speaker on the panel, which featured “drafters, sponsors, supporters and critics of state bills to reform the use of employee non-compete agreements.”

Massachusetts Lawyers WeeklyThe article discusses legislation pending in the Massachusetts State Legislature that would reform the use and enforcement of non-compete agreements. One controversial aspect of the pending legislation is the so-called “Garden Leave” clause, which would require employers to pay half the salary of employees for the duration of their noncompete period after they leave.

In the article, Russell Beck addresses the proposed Garden Leave provision as follows:

One argument against the garden-leave provision, according to Boston attorney Russell Beck, is that the employee has already been compensated for accepting his non-compete, making additional consideration, post-employment, unnecessary or unjust.

It also has been argued that garden leave “would significantly adversely disadvantage small companies, who can’t afford to pay somebody not to work,” he added.

The current legislation also contains a provision that would prevent enforcement of noncompete agreements against employees who have been terminated without cause or laid off. In the article, Russell Beck is quoted as follows on this provision:

However, Beck noted that, as a practical matter, companies typically do not seek to enforce non-competes against such employees, relying instead on non-disclosure or non-solicitation agreements to protect their interests.

Another provision evoking mixed feelings is the proposed elimination of the practice of allowing judges to “red-line” overbroad non-compete agreements. The theory is that it will incentivize companies to tailor their non-compete agreements more narrowly from the outset.

“It moves the needle and makes a company focus more on bringing the language in line with what the law requires,” Beck said, adding that employees gain the “significant benefit” of receiving clear notice about what they are restricted from doing.

Separate from the noncompete aspects of the pending Massachusetts legislation, if passed, the bill will adopt the Uniform Trade Secrets Act. The article addresses the uncertainty about the new trade secrets law, with some saying that it would make it harder to obtain triple damages and attorneys’ fees in trade secret misappropriation cases. The article quotes Russell Beck on this topic as follows:

Others are not sure the bar will be raised much, however. For one thing, there are cases on both sides of the issue of whether 93A even applies to a departing employee who misappropriates trade secrets, Beck said.

The controlling authority, the Appeals Court case Specialized Technology Resources, Inc. v. JPS Elastomerics Corp., answers that question in the affirmative. However, Superior Court Business Litigation Session Judge Janet L. Sanders suggested that Specialized Technology was wrongly decided in her decision in The Gillette Company v. Craig Provost et al. late last year.

But presuming that 93A does apply in that context, Beck thinks the same conduct that would have established a valid 93A claim will meet the UTSA’s “willful and malicious” standard.

The article was written by Massachusetts Lawyers Weekly news reporter Kris Olson.

For up-to-the-minute analysis of legal issues concerning noncompete agreements in Massachusetts and across the United States, read Russell Beck’s blog, Fair Competition Law.

Beck Reed Riden LLPBLF 2014_Silver_Generalis among the leading authorities in trade secret, noncompete, and unfair competition law, and our experience handling these matters is backed by our extensive employment law and business litigation experience. Our hand-picked team combines attorneys with complementary expertise and practical experience. The Wall Street Journal featured Beck Reed Riden LLP’s noncompete agreement experience. Recently, the White House issued a report entitled, “Non-Compete Agreements: Analysis of the Usage, Potential Issues, and State Responses,” relying in part on Beck Reed Riden LLP’s research and analysis, including its 50 State Noncompete Survey.

Russell Beck’s work in this area is well recognized; it includes:

  • Over sixteen years of working on trade secret, noncompete, and unfair competition matters

  • Authoring the book Negotiating, Drafting, and Enforcing Noncompetition Agreements and Related Restrictive Covenants (5th ed., MCLE, Inc. 2015), used by other lawyers to help them with their noncompete cases

  • Drafting and advising on legislation for the Massachusetts Legislature to define, codify, and improve noncompetition law

  • Teaching Trade Secrets and Restrictive Covenants at Boston University School of Law

  • Founding and administrating the award-winning blog, Fair Competition Law

  • Establishing and administrating the Noncompete Lawyers and Trade Secret Protection groups on LinkedIn, with over 750 members around the world

  • Founded and chaired the Trade Secret / Noncompete Practice for an AmLaw 100 firm

In addition, Russell was honored for his work in this area of law in the 2014 Chambers USA Guide, which explained that “Russell Beck of Beck Reed Riden LLP specializes in noncompete litigation and is a trade secrets expert. He comes highly recommended by his peers for his nationwide practice in this niche. ‘He’s fantastic,’ sources say.”

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.