NO CONSUMER PROTECTION VIOLATIONS IN LAWSUIT BETWEEN TWO EMPLOYERS- Boston Business Lawyers Parker Scheer LLP

December 7, 2012

U.S. District Court Judge Dennis Saylor recently granted a motion to dismiss a former employer's 93A consumer protection claim against a company that had hired its former employees--employees who were bound by a non-competition agreement which they had entered into with the former employer. Interestingly, the former employer did not assert the 93A claim against the former employees, but instead against the company that employed those employees, on the theory that the company knew or should have known that the former employees would be breaching their respective non-competition agreements with the former employer by accepting employment with the new company. Although the court let the former employer's claims for intentional interference with contractual relations against the new company proceed, it determined that, because the proposed 93A claim arose out of an employer-employee relationship, the "trade or commerce" nexus required under the 93A statute was not satisfied in a claim involving two employers. The judge focused on the fact that the former employer's claims against the new company would not have arisen but for the employer-employee relationship between the former employer and its former employees.

Whether other courts construing the 93A statute will follow this federal judge's very expansive view remains to be seen. It is, at the very least, arguable that companies may be engaging in trade or commerce under circumstances similar to those in this case. Time will tell whether the same result would be reached if, for example, an employment agency lured employees away from one company to work for a competitor.

If you believe you have a claim related to non-compete agreements, please contact Parker | Scheer LLP for a free consultation with one of our experienced Business Lawyers.