We have written recently about legislative action in various states concerning their restrictive covenant laws, including Washington state’s prohibitions on nondisclosure and nondisparagement provisions in employment agreements, a proposal in Connecticut to codify limitations on noncompetes, and a law passed in Colorado that would limit the use and enforcement of noncompetes and non-solicitation provisions. Another state that is considering new non-compete legislation is New Hampshire.
The proposed bill in New Hampshire would codify the so-called “material change doctrine,” a principle that a restrictive covenant is unenforceable if there are material changes to an employee’s employment relationship after the agreement is signed. Until now, only Massachusetts has recognized the doctrine. A brief history of the doctrine is illuminating.
The material change doctrine originally appeared in the Massachusetts Supreme Judicial Court’s 1968 seminal decision in F.A. Bartlett Tree Expert Co. v. Barrington, 353 Mass. 585 (1968). In that decision, the SJC held that changes to the employee’s compensation and sales territory “strongly suggest that the parties had abandoned their old arrangement and entered into a new relationship,” and, therefore, the non-compete agreement “was inoperative when the defendant terminated his employment with the plaintiff.” Id., at 587-88.
Subsequent decisions have applied and refined the material change doctrine, albeit not with any real consistency. In...
KENINGAU: A pensioner was sentenced to 12 months' imprisonment and fined RM73,600 after being found guilty of submitting a false claim related to the supply of food for media personnel worth RM14,7...