In a June 2025 opinion, the Massachusetts Supreme Judicial Court (SJC) clarified that the Massachusetts Noncompetition Agreement Act’s scope does not extend to a forfeiture clause tied to the breach of a nonsolicitation agreement.
An employee was bound by an agreement not to solicit employees of Foundation Medicine. The employee later affirmed her nonsolicitation obligations in a separation agreement, which provided that the employee’s severance benefits would be forfeited in the event she breached her contractual obligations.
Foundation Medicine subsequently ceased paying severance benefits based on its claim that the employee had violated her nonsolicitation agreement. The employee filed suit and alleged that the forfeiture provision ran afoul of the Massachusetts Noncompetition Act, which places strict limitations on the use of noncompetition agreements, which, in turn, are defined to include “forfeiture for competition agreements.”
The trial court agreed with the employee’s position that the Massachusetts Noncompetition Act prohibited the forfeiture clause and ruled in favor of the employee on a motion for judgment on the pleadings.
In Miele, the SJC overturned the lower court’s decision based on a reading of plain statutory language. The Court ruled that under the Noncompetition Act, “(1) noncompetition agreements do not include nonsolicitation agreements, and (2) forfeiture for competition agreements...
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