June 2025

Massachusetts court holds “forfeiture for solicitation” is not a noncompete under Massachusetts Noncompetition Agreement Act

In Miele v. Foundation Medicine, Inc., the Massachusetts Supreme Judicial Court (“SJC”) held that the Massachusetts Noncompetition Agreement Act, G. L. c. 149, § 24L (the “Act”), which generally prohibits noncompete and “forfeiture for competition” agreements unless they comply with certain enumerated requirements set forth in the Act, does not apply to nonsolicit agreements, even when they include a forfeiture provision.  

The dispute involved a former executive accused of violating a nonsolicit clause by recruiting former colleagues to join her new employer.  When she left her former employer, she executed a transition agreement that conditioned $1.2 million in transition benefits on her compliance with her restrictive covenants.  If she breached those covenants, she would forfeit any unpaid benefits and return any already paid.  Her former employer believed she breached the nonsolicit and halted her payments under the forfeiture clause.  In response, the executive sued for breach of the transition agreement, arguing that the forfeiture clause was unenforceable under the Act.  

The Superior Court initially agreed, holding that the agreement imposed “adverse financial consequences on [the employee]” akin to a noncompete.  The SJC reversed.  It held that the Act expressly excludes nonsolicit agreements and “there is no justification for treating a nonsolicit covenant differently simply because it includes a forfeiture mechanism.”  The SJC also rejected the argument that “solicitation” constitutes “competitive activity” subject to the Act, as such an interpretation would contradict the Act’s text.  The Court also reviewed the Act’s legislative history, noting that while it was motivated by concerns over employers using forfeiture clauses to evade noncompete restrictions, those concerns did not extend to nonsolicit restrictions, which the Act explicitly excludes.

S&K Take: This decision confirms that employers may pair nonsolicit agreements with forfeiture clauses without implicating the Act’s procedural and substantive restrictions on noncompetes.  As the Court noted, a “nonsolicitation covenant remains just that—regardless of whether the remedy for breach involves forfeiture of benefits.”  Employers seeking to protect their workforce from post-employment poaching can still rely on non-solicitation covenants and structure severance or transition payments accordingly, without triggering the Act’s strict compliance framework for noncompetes.  This decision does not, however, impact how Massachusetts state courts might interpret contracts that require forfeiture for competition outside of solicitation. 

National Labor Relations Board Administrative Law Judge says firing employee for disparaging tweets did not violate NLRA

An Administrative Law Judge (“ALJ”) for the National Labor Relations Board ruled that the Washington Post (the “Post”) did not violate the National Labor Relations Act (“NLRA”) when it terminated an employee for violating its social media and collegiality policies.  The Post fired the employee for posting a series of tweets on then-Twitter (now X) criticizing a colleague’s retweet of a sexist joke and attacking the Post’s leadership for how it handled the situation.

Under Section 8(a)(1) of the NLRA, an employer may not interfere with employees’ rights to “engage in concerted activities for mutual aid or protection,” including discussing workplace concerns on social media.  However, this protection does not extend to employee conduct that is “disloyal, reckless or maliciously untrue.”

Here, while the employee claimed her posts advocated for workplace equity and were therefore NLRA-protected speech, the ALJ found her tweets were not clearly tied to a labor dispute between the Post and its employees, and were too scattered and personal to qualify as protected concerted activity for the benefit of other employees. The judge described the tweets as “all over the place: some attacking sexism, others complaining about abusive responses to her tweets, including blaming her employer and a colleague for that abuse, and welcoming online praise from supporters.” 

Additionally, the ALJ held that the tweets were “disloyal, reckless and disparaged the employer’s reputation.”  The judge emphasized that the employee repeatedly and falsely claimed “no one at the Post was doing anything about” the offensive tweet, despite knowing that the coworker had promptly removed the offensive tweet and that the Post had already publicly condemned the offensive tweet and disciplined the coworker.

S&K Take: This case serves as a reminder that while employees have the right to engage in protected activity under the NLRA, those rights are not unlimited, and that there is a critical difference between unprotected personal expression and protected concerted activity.  The ALJ also criticized social media as a platform for raising workplace concerns, noting that it “attracts users who respond quickly without much deliberation… and are uninhibited in using language that they would likely not use if they were having a civil face-to-face personal conversation.” 

California court holds employer cannot enforce one-sided arbitration agreement

The California Court of Appeal upheld a lower court’s decision denying an employer’s request to compel a former employee’s equal pay claims to arbitration, holding that the arbitration agreement was both procedurally and substantively unconscionable and therefore unenforceable.

The employee had sued on behalf of herself and other similarly situated employees alleging violations of California’s Labor Code over gender-based pay disparities.  The employer moved to compel arbitration pursuant to an arbitration provision the employee signed at the outset of her employment. 

The appellate court affirmed the trial court’s finding that the arbitration provision was unenforceable because it “lack[ed] mutuality” and that the trial court did not abuse its discretion in declining to sever certain offending provisions to render it enforceable.  The court first assessed the provision for procedural unconscionability.  Though it found only a “a low level of procedural unconscionability,” this was enough to assess for substantive unconscionability.  On that front, the court held the CIAA was substantively unbalanced because it required the employee to arbitrate all employment-related disputes and waive her right to a jury, but preserved the employer’s rights to sue in court, to a jury trial, and to seek injunctive relief without showing damages or posting a bond.  It also, noted the court, permitted the employer, but not the employee, to recover attorneys’ fees incurred in enforcing the CIAA.  Ultimately, the court held that “a significant level of substantive unconscionability, . . . combined with the low level of procedural unconscionability, makes the arbitration agreement unenforceable.”

S&K Take: This decision underscores how closely California courts will scrutinize arbitration agreements, particularly in the employment context.  Contributing to this is a recognition  that arbitration agreements are often “contracts of adhesion”—standardized terms presented as a condition of employment on a take-it-or-leave it basis—and that employees generally lack bargaining power.  Employers who use arbitration provisions should carefully consider any factors that could undermine enforceability.