On June 13, 2025, the Massachusetts Supreme Judicial Court (SJC) issued a significant decision in Miele v. Foundation Medicine, Inc. (SJC-13697) confirming that the Massachusetts Noncompetition Agreement Act (the “MNAA”) does not apply when forfeiture clauses are tied to non-solicitation agreements.
What is the MNAA?
The MNAA, which took effect on October 1, 2018, significantly limits the enforceability of noncompetition agreements with employees and independent contractors in Massachusetts. The MNAA imposes strict statutory requirements on noncompetition agreements, including written notice and advance timing requirements, a “garden leave” provision or other mutually agreed consideration, geographic and temporal reasonableness, and public interest and fairness standards. Importantly, the statutory definition of “noncompetition agreement” in the MNAA expressly excludes non-solicitation agreements.
What is a forfeiture clause?
A forfeiture clause is a contractual provision that conditions an employee’s entitlement to certain post-employment benefits (e.g., severance pay) on compliance with specific covenants (e.g., non-solicitation obligations).
Case Background and Decision
Susan Miele, a former employee of Foundation Medicine, Inc. (“FMI”), signed a non-solicitation agreement at the outset of her employment in 2017, and reaffirmed it in a transition agreement in 2020. Broadly, the transition agreement provided that Miele would remain with FMI for a certain period of time, in exchange for approximately $1.2 million in transition benefits. That transition agreement further included a forfeiture clause stating that if she breached the transition agreement – or any other agreement with FMI, including the non-solicitation agreement – she would forfeit her transition benefits. After Miele’s departure, FMI alleged she violated the non-solicitation agreement by soliciting employees. FMI notified Miele that the breach of the non-solicitation agreement constituted a breach of her transition agreement. FMI ceased severance payments and demanded that Miele repay severance payments received to date–under the transition agreement’s forfeiture clause. Miele sued, claiming that the forfeiture provision violated the MNAA and was unenforceable.
While the lower court sided with Miele, the SJC reversed the decision. The Court ruled that because the Legislature explicitly excluded non-solicitation agreements from the MNAA, forfeiture clauses that related back to non-solicitation agreements are similarly not subject to the MNAA’s restrictions.
As a practical matter, what does Miele mean for Massachusetts employers?
The SJC’s ruling provides welcome clarity for employers that rely on non-solicitation covenants to protect business interests. The key takeaways include:
- The MNAA does not apply to non-solicitation agreements. These agreements can be used without satisfying the stricter formalities set forth in the MNAA (e.g., advance notice, garden leave).
- Forfeiture clauses tied to non-solicitation agreements are enforceable. Employers may lawfully condition benefits like severance or bonuses on compliance with non-solicitation terms without needing to satisfy the requirements of the MNAA.
- General contract principles still apply to non-solicitation agreements. Although not governed by the MNAA, non-solicitation agreements must still be reasonable, narrowly tailored, and consistent with public policy to be valid.
Going Forward
We recommend that employers take this opportunity to work with their employment counsel to review their current employment, separation, and incentive agreements to ensure that non-solicitation language and forfeiture provisions are clearly drafted, appropriately tailored, and aligned with the SJC’s recent guidance.
Attorney Kathleen R. O’Toole, Esq. is a partner in the Employment Practice at the Boston-based law firm Conn Kavanaugh Rosenthal Peisch & Ford, LLP.
She can be reached at kotoole@connkavanaugh.com
Brendan P. Kelley, Esq. is also an attorney in the firm’s Employment Practice and can be reached at bkelley@connkavanaugh.com
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