Are noncompetition agreements a waste of paper? Renee Inomata of Burns & Levinson evaluates this question in the wake of the recent federal district court decision in Massachusetts, Boston Scientific v. Lee, and the answer is “no.”
In this case, Dr. Dongchul Lee was a former employee whose employment agreement required him to sign a nondisclosure provision and return work equipment if and when his employment was terminated. He was not required to sign a noncompetition agreement, which Inomata presumes is because he was based in California, where such contracts are unlawful.
Lee eventually left the company and went to work for its competitor. His research at the new company was “extremely similar,” says Inomata, to what he was doing at Boston Scientific and he also didn’t return more than 300,000 pages of documents. Boston Scientific sued and was granted an injunction requiring Lee to return the documents and stop disclosing trade secrets. But the court refused to prevent him from working at the new employer.
Inomata concludes that had Lee been in a state that allowed noncompetition agreements, such a provision could have deterred him from working for a competitor and saved Boston Scientific the headache of wondering just how much Lee remembers about its trade secrets, “in intangible form, in his memory.”