Massachusetts High Court Says Non-Solicitation Agreements with Forfeiture Clauses Aren’t Subject to Strict Non-Compete Restrictions
The Massachusetts Supreme Judicial Court just clarified that non-solicitation agreements aren’t subject to the Commonwealth’s strict noncompetition law just because they contain forfeiture provisions, handing businesses a crucial win when it comes to enforcing restrictive covenants. Here’s what happened in the June 13 Miele v. Foundation Medicine decision, what it means for your business, and what you should do now. What Happened? Susan Miele signed a restrictive covenant agreement when she joined Foundation Medicine (FMI) as an executive in 2017 . The agreement included a non-solicitation clause barring her from recruiting FMI employees for a year after her departure. When she left the company in 2020, she signed a transition agreement that incorporated the non-solicitation clause and added a forfeiture provision: if she breached the non-solicitation agreement , she would forfeit or must repay over $1 million in benefits. After leaving FMI in 2021, Miele allegedly recruit...