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Good morning!
Summer is a great time to take stock and catch up on what the Massachusetts Legislature has in its bag of tricks for the business community. In today's summer issue, we look at non-competes and how changes afoot on Beacon Hill may have an impact!
I thought we said good-bye for the summer… we even sang a few bars of "See You in September." But I should have known that SBANE wouldn't let us go all summer long without at least one of their wonderful parties. So, let's raise a glass or two tomorrow night, enjoy the fabulous view over Boston Harbor and catch up on summer stories, high atop the Federal Reserve Bank. If you're a long-time SBANE member, you know what splashy, elegant parties Valerie Benedict, SBANE's own Perle Mesta, throws!
Cordially,

Marijo McCarthy, Esq.
President, Widett and McCarthy, P.C.
A Small Business Law Firm
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| So You Thought Non-Compete Agreements Were Safe? Think again. |
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Have you ever had a departing employee set up shop next door (literally or figuratively) and compete with you? It's a frustrating experience, and one which leads many small business owners to overreact by imposing non-compete agreements on all employees from that day forward.
If this is you, take heed. If the Massachusetts Legislature has its way, that option won't be open to you for much longer.
Non-compete agreements, of course, serve a purpose when carefully implemented with high-level, key employees who, by reason of their job responsibilities and access to company information, are in a position to negatively impact your business if they immediately begin to compete with you when they leave your employ. If a small business owner has "protectable interests" — trade secrets, confidential information or good will — that employer should be allowed to fairly and reasonably protect those interests.
When they are impulsively or irrationally imposed on employees, however, non-competes do not serve a purpose and often won't be enforced or enforceable.
How would the pending legislation change the rules for non-competes if voted into law?
- First, the legislation would actually provide some certainty to the rules governing non-competes, rules which are now primarily defined by the courts on a case-by-case basis.
- Second, the legislation would impose salary requirements. Non-competes would only be enforceable for employees earning a minimum of $75,000.00, with the possibility of small, annual increases going forward.
- Third, the legislation would limit to 6 months the period deemed "presumptively reasonable" for the term of a non-compete and, even more restrictive, would limit to one year the total non-compete period.
- Fourth, and as an administrative challenge for fast-moving small business owners, the legislation would require that the written non-compete agreement be provided to a prospective employee two weeks in advance of actual employment.
- Fifth, the employer might be required to pay the employee's legal fees if the non-compete was found to be unenforceable in a legal proceeding.
The only truly good news in this proposed legislation is that in its current form, it does not impose restrictions on "non-solicitation" agreements, where an employee has agreed not to solicit other employees or clients of the former employer.
While this is only proposed legislation, subject to agreement of and passage by both House and Senate on Beacon Hill, it is a wake-up call for employers who find non-compete agreements necessary to protect their businesses. And, while it may not apply to non-compete agreements already in existence, it does provide some guidance on the Legislature's current thinking about these agreements going forward.
Employers would do well to take a deep breath and examine their policies and practices regarding these agreements before the Legislature does it for them.
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| Things We Like |
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One of the nicest things about summer is the luxury of time. More daylight means more hours to do more of the things we enjoy. My head tells me that we have the exact same number of hours in the day during January as we do in July, but my heart tells me that more daylight hours equate to more real time. Illusion? Of course, but so what?! I spend some of those "extra" hours reading… on the beach… by the pool… on the back deck… on the high speed ferry to the islands. You name it… I carve out a few hours to read. Let me share one of my recent favorites:
Matthew Pearl is my kind of author. He writes historical fiction with such a narrative flair that the reader becomes invested in the outcome of the story. After all, it's history, isn't it? Well, sort of, but not quite. For Pearl takes historical literary characters — Poe, Longfellow, Dickens — and breathes new intrigue and mystery into their lives right in front of the reader. You know his non-fictional characters but, of course, you don't… not really.
In "The Last Dickens," Pearl takes a familiar subject… Charles Dickens' last novel, "The Mystery of Edwin Drood" (never finished due to Dickens untimely death), and gives us a "what if" suspense novel. Fitted in around Dickens' mystery like a bespoke suit fits a London gentleman, is the story of the publishing industry of 1870 as revealed through the eyes of an up and coming young publisher named James Ripley Osgood. Osgood's calling to his profession arose when he read Thoreau's "Walden," who believed that he should go to great lengths "to ensure that every person in America had a chance to read his writing." Osgood's marketing consists of bestowing his published books on every person he comes across, since he believed that "presenting a book as a gift — a rather inexpensive gesture for a publisher — improved the mood of the gloomiest recipient."
Throughout it all, Pearl humanizes his characters to a level that leaves you caring what happens to them and deeply engaged in the ups and downs of their respective lives. And when you are through with "The Last Dickens," go back and add "The Dante Club" (Pearl's first) and "The Poe Shadow" (his second) to your collection. You won't be disappointed!
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| About Us |
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Widett and McCarthy specializes in advising small
business owners in the area of contracts.
Whether
reviewing a contract for services with your customer,
negotiating a lease with your landlord or finalizing
financing documents with your lender, we make sure
your best interests are protected.
In addition, and for
those clients whose successful growth requires a
more comprehensive relationship, we act as "general
counsel:" On-call when you need us as a sounding
board, legal advisor and strong right hand.
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Widett and McCarthy, P.C.
1075 Washington Street
West Newton, MA 02465
Telephone: 617.964.5559
Facsimile: 617.964.5529
Email
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