Non-Competition Agreements in Massachusetts: An Overview
Non-competition agreements, also known as non-compete clauses, are contracts that prevent an employee from working for a competitor or starting their own competing business for a specified period of time after leaving their current job. In Massachusetts, non-compete agreements are governed by strict laws and regulations that protect the rights of both employees and employers.
Statutory Requirements
In Massachusetts, non-compete agreements must meet certain statutory requirements in order to be enforceable. According to the state`s non-compete law, non-compete agreements must be:
1. In writing: Non-compete agreements must be in writing and signed by both parties.
2. Supported by consideration: The agreement must be supported by something of value that the employee receives in exchange for the restriction on their ability to compete.
3. Reasonable in scope: Non-compete agreements must be reasonable in scope, meaning that they cannot be overly restrictive or overly broad.
4. Limited in duration: The agreement must be limited in duration, and cannot exceed one year from the date of termination of employment.
5. Protect a legitimate business interest: The restriction must protect a legitimate business interest, such as trade secrets or confidential information.
Enforcement
If a non-compete agreement meets the statutory requirements and is reasonable in scope, it may be enforced by a court in Massachusetts. However, the burden is on the employer to prove that the non-compete agreement is necessary to protect a legitimate business interest and that it is reasonable in scope.
Challenges to Enforceability
Non-compete agreements in Massachusetts can also be challenged on various legal grounds. One common challenge is that the agreement is overly broad and restricts the employee`s ability to work in their chosen field. Another challenge is that the agreement is not supported by adequate consideration, such as a promotion or pay increase. Additionally, a court may refuse to enforce a non-compete agreement if it is found to be against public policy or if it is deemed to be oppressive or overly burdensome on the employee.
Conclusion
In summary, non-compete agreements in Massachusetts are subject to strict statutory requirements and must be reasonable in scope and duration. Employers who wish to enforce non-compete agreements must prove that they are necessary to protect a legitimate business interest, and that they are not overly restrictive or oppressive on the employee. Employees who are subject to non-compete agreements may challenge their enforceability on various grounds, including that they are overly broad or not supported by adequate consideration. For more information on non-compete agreements in Massachusetts, speak to a qualified attorney.