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Boston Beer's noncompete agreement is back in court this wk, as former employees went on the offensive for 2nd time in 2 yrs against co's alleged "aggressive tactics." A pair of former reps based in Chicago, Hailey Boyd and Grace Murtagh, filed a proposed class action lawsuit against the co in Massachusetts fed ct yesterday, claiming co's "well-known" and "aggressively enforced" noncompete clause violates state law. They seek additional compensation on behalf of themselves and "all former employees," specifically noting that co employs sales folks in at least 47 states. In mid-Oct, the pair sought settlement with Boston prior to filing suit, but co declined. Now they're asking a fed judge to award hefty damages and revise Boston's employment agreement. Core Claim: State Law Requires Much More than $3K Employees Get Suit rests on reading of MA law setting limits on noncompete clauses like the one included in Boston's standard employment agreement. To be "valid and enforceable," noncompetes must provide for either half of the employee's highest salary in past 2 yrs or some other "valuable consideration" agreed by both parties. But Boston offers $3,000 for enforcing the clause "and claims this is adequate consideration," these employees allege. That's "dramatically less" than it should be, amounting to less than 5% of either Boyd or Murtagh's salary, per suit. Even if they were paid fed minimum wage, payment should be $7,540, with MA minimum wage of $15/hr pointing to near $16K. Rather than complying with MA's restrictions on noncompetes, these former employees claim that "Boston Beer offers $3,000 in order to evade" state law.Overbroad Terms Amount to "Nearly Complete Ban" from Alc Bev Biz Noncompete also must include reasonable limits on the other types of jobs former employees are barred from taking, in addition to how long and where they apply, according to this reading of state law. Boston's noncompete lasts for a yr after end of employment, per employment agreements attached to complaint. It applies to jobs not only in mkts where the employee worked for Boston in past 2 yrs but also anywhere about which co gave them proprietary info.And they're barred from any job in the "importing, production, marketing, sale or distribution to distributors of any beer, malt beverage, hard cider" or other type of product Boston makes, whether it's produced in or imported to US as long as it carries a wholesale price within 25% of any Boston product. "Given vast product offerings of Boston Beer," that "serves as a nearly complete ban from the alcoholic beverage industry," these employees contend. Additionally, co's repeated enforcement is "meant by Boston Beer to have a chilling effect on employees leaving the company," since folks who leave are often "unable to find work&hellip;and remain unemployed for significant amounts of time.""Well-Known" Policing of Heavily Critiqued Clauses Industry readers may be familiar with what these employees describe as the ways Boston "aggressively polices" its noncompete. Complaint briefly recounts a 2011 suit with Anchor, a 2022 suit against a former sales rep who went to Heineken and an Oct 2023 suit against an employee who went to Downeast. A more recent suit brought by former employees in early 2024 in the same ct is listed as a "related case." That suit, by the way, is still deep in discovery. While employees did not successfully convince ct to block Boston from enforcing its noncompete and certain charges were dismissed, some claims continue.These employees also paint noncompete clauses as going out of favor, citing the since-abandoned rule from FTC (written under the Biden Admin) that would have broadly barred the practice. A critical Harvard Business Review paper and other critiques of noncompetes show up too, painting broader picture of harm to not just employees but wages overall, innovation and consumers. Indeed, plaintiffs take a bigger swing, claiming Boston's tactics amount to "unfair and deceptive actions" in violation of state's consumer protection act by "restricting the free market of labor in order to obtain competitive advantage over competitors" and "attempting to gain an unfair business advantage," at least. If judge ultimately agrees, that would triple ("treble") damages paid out.

Chi-Based Ex-Boston Reps Sue Co Over Noncompete, Seek Class Action Status for Sales Folks & More

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