The Business Litigation Session of the Massachusetts Superior Court has ruled that a non-compete signed three days prior to the effective date of the Massachusetts Non-Competition Act (G.L. c. 149, § 24L) is enforceable and not governed by the statute.
Massachusetts Superior Court
SUMMARY: (court decision – opens in PDF)
“Vicarious Surgical Inc. has designed, and is seeking federal regulatory approval for, a small surgical robotic system to be used in human abdominal surgery. Beth Tragakis worked for Vicarious for three-and-a-half years. Vicarious claims that Tragakis violated her non-competition and non-disclosure agreements by going to work for a direct competitor after downloading and taking copies of proprietary, confidential, and highly sensitive technical information. Vicarious sued Tragakis for breach of contract, conversion of property, violating the Massachusetts Uniform Trade Secrets Act (G.L.c. 93, §§42-42G) and committing unfair trade practices that violate the business-to-business section of the Massachusetts Consumer Protection Act (G.L.c. 93A, §11). …
“… At oral argument, Tragakis asserted for the first time that Vicarious’s claims for breach of her non-competition agreement must be dismissed for lack of subject matter jurisdiction because that contract is unenforceable under the Massachusetts Non-Competition Act (G.L.c. 149, §24L). …
“This statute does not apply here, however, because Tragakis signed her noncompetition agreement before this new statute took effect. Tragakis executed this contract, and by its terms it became effective, on September 28, 2018. The Legislature limited application of §24L to agreements entered into after October 1, 2018, three days after Tragakis signed the non-competition agreement. See St. 2018, c. 228, §21.
“In any case, the statute would not raise any question of subject matter jurisdiction even if it applied to this non-competition agreement. The Superior Court would have subject matter jurisdiction to hear a claim for alleged breach of a non-competition agreement between and employer and an employee, even if it then found that the contract is unenforceable under §24L. …
“The Court is persuaded, however, that Vicarious’s failure and apparent inability to allege that Tragakis has made any use of its proprietary information means that Vicarious has failed to state a viable claim under G.L.c. 93A, §11. …
“Proof of legally cognizable harm or injury is a necessary element of any claim under G.L.c. 93A. …
“But Vicarious has alleged no facts plausibly suggesting that it suffered any kind of loss as a result of Tragakis’ misconduct, or that Tragakis has made any profit by using Vicarious’s proprietary information. It has therefore failed to state a viable claim under G.L.c. 93A, §11.”