On June 13, 2025, the Massachusetts Supreme Judicial Court (SJC) issued a decision in Miele v. Foundation Medicine, Inc., confirming that the Massachusetts Noncompetition Agreement Act does not apply to nonsolicitation agreements incorporated into a termination agreement even if the termination agreement includes a forfeiture provision.

Quick Hits

• In 2018, the Massachusetts Noncompetition Agreement Act (MNAA), effective prospectively only for agreements entered into on or after October 1, 2018, was enacted.
• The Massachusetts Supreme Judicial Court affirmatively held that nonsolicitation agreements are not subject to the MNAA.
• The parties’ dispute centered on whether a nonsolicitation agreement, although expressly excluded from the statutory definition of a “noncompetition agreement,” may nevertheless constitute a “forfeiture for competition agreement” within the meaning of the MNAA when the violation of the nonsolicitation agreement triggers a forfeiture clause.
• The SJC held that just because a nonsolicitation agreement is coupled with a forfeiture provision does not change the fact that nonsolicitation provisions are excluded from the MNAA.

Factual Summary

In 2017, Foundation Medicine, Inc. (FMI) hired Susan Miele. Miele signed a restrictive covenant agreement as a condition of her employment, which included a noncompetition, nonsolicitation, and confidentiality and assignment provisions. The nonsolicitation provision barred Miele, both during her employment and for one year after the end of her employment, from directly or indirectly soliciting any employees or consultants of FMI to leave FMI or facilitate their hire by her subsequent employer.

In 2020, Miele and FMI executed a transition agreement in connection with her separation from the company, and that transition agreement expressly incorporated the restrictive covenant provisions that Miele had signed upon her hire by FMI. The transition agreement included a forfeiture provision that provided that if Miele committed a breach of any agreement with FMI, Miele would forfeit any unpaid benefits under the transition agreement and would have to immediately repay any previously paid benefits. FMI ultimately paid Miele over $1 million in transition benefits.

In 2021, after Miele left her employment with FMI, she joined Gingko Bioworks. FMI alleges that during the one-year period after she left FMI, Miele recruited several FMI employees to work at Gingko. FMI then notified Miele that she had breached her transition agreement, and that pursuant to the forfeiture clause in that agreement, FMI ceased further payments to Miele and demanded that she repay all benefits already disbursed. Miele did not comply with that demand.

Procedural History and the Parties’ Arguments

Miele sued FMI in late 2021, alleging that FMI breached the transition agreement by withholding her transition benefits. FMI counter-claimed for breach of contract, stating that Miele violated both her transition agreement and her restrictive covenant agreement, and asked the court for judgment declaring it did not need to pay Miele any additional benefits under the transition agreement.

Miele moved for judgment on the pleadings, arguing that while the MNAA did not expressly apply to nonsolicitation agreements, it should apply here because the inclusion of the forfeiture clause made the non-solicitation agreement subject to the Massachussetts noncompetition agreement. FMI argued in response that the MNAA did not apply here, noting that it only governs “noncompetition agreements” and expressly excludes non-solicitation agreements.

The lower court granted Miele’s motion in part, arguing that FMI could not enforce the forfeiture provision of the transition agreement, but also holding that FMI could still assert Miele’s breach of the restrictive covenant agreement as a defense to her breach of contract claim or from seeking damages for that alleged breach. In its holding, the lower court rejected FMI’s position that all non-solicitation agreements fall outside of the noncompetition act, and instead held that nonsolicitation agreements are only excluded if they do not impose a forfeiture provision for breach of the agreement.

FMI moved for an interlocutory ruling to the appeals court, and the SJC then allowed FMI’s application for direct appellate review.

The SJC’s Holding

The SJC framed the parties’ dispute as follows: whether a nonsolicitation agreement, although expressly excluded from the statutory definition of a “noncompetition agreement,” may nevertheless constitute a “forfeiture for competition agreement” within the meaning of the Massachusetts Noncompetition Agreement Act when the violation of the nonsolicitation agreement triggers a forfeiture clause.

In reaching its holding, the SJC looked to legislative history and the plain language of the Massachusetts Noncompetition Agreement Act, noting that noncompetition agreements do not include nonsolicitation agreements, and forfeiture for competition agreements are a subset of noncompetition agreements. The court found that it then necessarily followed that forfeiture for competition agreements also exclude nonsolicitation agreements, and that to conclude otherwise would contradict the statute’s express exclusion of nonsolicitation agreements from the broader category of noncompetition agreements.

The SJC found that the inclusion of a forfeiture clause in Miele’s transition agreement did not alter this analysis, reasoning that there was no justification for treating a nonsolicitation agreement differently simply because it includes a forfeiture provision. In support of its decision, the SJC pointed out that the critical flaw in Miele’s position was that her reading of the statute would expand the scope of forfeiture for competition agreements to include nonsolicitation provisions even though the statute clearly excluded them from the definition of noncompetition agreements. The SJC further explained that “solicitation cannot be reintroduced through a back door without rendering the statute internally contradictory.”

The SJC remanded the matter to the lower court with instructions to reverse the order partially granting Miele’s motion for judgment on the pleadings.

Key Takeaways

This decision clarifies the scope of the MNAA and provides further guidance to employers regarding remedies they can pursue or enforce for potential breaches of nonsolicitation agreements. Employers may want to review their current agreements to consider the implications of the Miele decision for their existing or future agreements.