On June 13, 2025, the Massachusetts Supreme Judicial Court (SJC) ruled in Susan Miele v. Foundation Medicine, Inc., that the Massachusetts Non-Competition Agreement Act (the “Act”) does not apply to a non-solicitation agreement that contains a forfeiture or repayment obligation for breach provision. This distinction is particularly important because the SJC’s decision clarifies that forfeiture for breach provisions tied to non-solicitation agreements are excluded from the Act’s stringent non-competition requirements.
Background
The case was brought by Susan Miele, who signed a non-solicitation agreement as a condition of her employment with Foundation Medicine, Inc. (FMI) in 2017. Thereafter, upon her exit from FMI, Miele signed a transition agreement that incorporated Miele’s non-solicitation obligations. The transition agreement included a forfeiture clause, requiring Miele to repay the consideration she received for signing the agreement and, thus, forfeit any remaining benefits under the agreement if she breached her covenants to FMI.
FMI later demanded repayment of the money she received after Miele allegedly breached the non-solicitation provision by recruiting its employees.
Ruling
The SJC’s decision turned on the Act’s definition of a “noncompetition agreement” which includes “forfeiture for competition agreements” (as a type of covered non-compete agreement), but explicitly excludes non-solicitation agreements. Miele argued that pairing a non-solicitation agreement with a forfeiture clause extended the Act’s proscription for non-competition covenants to the non-solicitation provision at issue. The SJC disagreed, finding that that because non-solicitation agreements are explicitly excluded from the Act, the Act does not apply to non-solicitation provisions even when paired with a forfeiture for breach provision.
The SJC’s ruling confirms that forfeiture clauses remain a viable enforcement mechanism for non-solicitation agreements and reaffirms that non-solicitation agreements will not trigger the prohibitions of the Act.
Daniel Millard, summer associate in the firm's Boston office, contributed to this blog.
