Massachusetts Supreme Judicial Court Confirms Employers’ Ability to Enforce Non-Solicitation Agreements

CLIENT ALERT

By Attorney Karen A. Whitley and Robert J. Cowan, Summer Associate

A recent Massachusetts Supreme Judicial Court (“SJC”) decision has reaffirmed the enforceability of certain post-employment restrictive covenants, preserving an important tool for employers to protect their employee and client relationships. In 2018, the Massachusetts legislature enacted the Massachusetts Non-Competition Agreement Act (“Non-Compete Act”), imposing several conditions before an employer can enforce a non-competition clause in an employment agreement. The increased scrutiny on non-competes had a meaningful impact on employers’ ability to protect their business interests in industries where such agreements are common, such as Boston’s tech and life sciences fields. Employers do not have to meet the same requirements when including a non-solicitation clause in their agreements, and many employers began relying more heavily on those provisions instead. On June 13, 2025, the SJC issued an opinion in the case of Miele v. Foundation Medicine, Inc., closing a potential loophole that could have exempted employees from the consequences of breaching their non-solicitation agreements.

About the case:

Susan Miele worked for Foundation Medicine, Inc. (FMI) as the Head of Human Resources/Chief People Officer. As a condition of employment, Miele signed an agreement with a non-solicitation clause, prohibiting her from enticing any FMI employee to leave the company during her employment and for one year afterwards. In 2020, Miele and FMI agreed that she would leave the company several months later. Miele and FMI signed a Transition Agreement in which Miele reaffirmed her non-solicitation covenant and agreed that if she breached its terms, she would forfeit substantial transition benefits. Shortly after Miele left FMI, she joined another company. In the following two months, Miele communicated with at least three members of her team, and each of them applied for and accepted jobs with the same company. When FMI refused to pay $300,000 of transition benefits, Miele sued for breach of contract. FMI filed a counterclaim to recover nearly $1.2 million it had already paid Miele, asserting that she had forfeited those benefits as a result of breaching her non-solicitation clause.

The Non-Compete Act specifically excludes non-solicitation provisions from its scope. The statute does, however, cover “forfeiture for competition” agreements, which Miele argued her agreement had become. A Superior Court judge agreed with Miele that the Non-Compete Act, with all of its additional requirements, exempted several types of agreements (such as Miele’s original non-solicitation clause) “unless those agreements provided for a forfeiture in the event of a violation.” Under those rules, the “forfeiture for competition” provision in the Transition Agreement would be unenforceable and Miele would be entitled to her benefits. Under the Superior Court’s reading of the Non-Compete Act, employers would have a difficult time imposing penalties on employees who breach their non-solicitation agreements unless the employer had proactively complied with the requirements for “forfeiture for competition” clauses under the Act.

On appeal, the SJC declined to adopt Miele’s interpretation and reversed the lower court. Non-solicitation agreements are expressly excluded from the rules in the Non-Compete Act, the court reasoned, and “there is no justification for treating a nonsolicitation covenant differently simply because it includes a forfeiture mechanism…. A nonsolicitation covenant remains just that – regardless of whether the remedy for breach involves forfeiture of benefits.” That the non-solicitation agreement here was backed up with a forfeiture provision did not relegate it to a different category. As a result, the court upheld FMI’s ability to enforce Miele’s non-solicitation obligation and the forfeiture clause in the Transition Agreement.

What does this mean for your business?

Although the 2018 Non-Compete Act curtailed the use of certain agreements in employment contracts, this SJC decision affirms employers’ ability to use non-solicitation agreements and back them up with real consequences for violations. Non-competition clauses have become increasingly unenforceable, not only because of the Massachusetts reform but also because of a proposed Federal Trade Commission rule banning them outright. Although that rule was suspended by a federal court last year, the decision is being appealed, and the future of non-competition agreements in general is uncertain.

While some states, such as California, North Dakota, and Oklahoma, have interpreted their non-competition rules to include non-solicitation clauses in their scope, this SJC ruling confirms that non-solicitation provisions in Massachusetts remain distinct and need not satisfy the requirements of the Non-Compete Act (but they still must be reasonable and designed to protect legitimate business interests). Although the Miele case dealt specifically with non-solicitation of employees, it likely extends to agreements regarding non-solicitation of clients.

In a regulatory environment where non-competition clauses are increasingly scrutinized, carefully crafted non-solicitation language can be a powerful and reliable tool for employers seeking to protect their business interests. Attorneys in our employment group are available to assist.

This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice.

Attorney Karen A Whitley, Shareholder, is a member of Sheehan Phinney’s Labor and Employment Group. With contributions from Robert J. Cowan, Summer Associate.