NON-COMPETE AGREEMENTS & CONTRACTS

Non-compete agreements and contracts are disfavored under the law and are enforceable in Massachusetts if only they are (i) reasonable in time; (ii) reasonable in scope; and (iii) are for a legitimate business purpose.  A legitimate business purpose is when a company seeks to protect confidential information, trade secrets or goodwill.  A non-compete contract is not enforceable if it is simply intended to keep an employee from working for a competitive business or to use his or her skills learned on the job.  There must be a legitimate business reason supporting the enforcement of the non-compete agreement.  Moreover, an employee cannot be precluded from using his or her own goodwill by way of a non-compete contract.  Nor may an employer consider the providing of training as a legitimate basis for the enforcement of a non-compete agreement. 

Employers must also enforce all their non-compete agreements and contracts or be at risk of being barred from enforcing any of their non-compete agreements.  Employers cannot selectively enforce a non-compete agreement against ex-employees.

Employers who hire an employee knowing the employee is under a non-compete contract can be exposed to a claim by the previous employer for wrongfully interfering with that non-compete agreement.  Another concern is that the previous employer may seek a preliminary injunction against the employee and his/her new employer to prevent that employee from working with the new employer.

In determining the enforceability and scope of a non-compete agreement both a factual and legal analysis must be performed.  The first step in an analysis is to determine the scope of the non-compete and then to analyze whether the contract or provision is enforceable as a matter of law.  Although Massachusetts does enforce non-compete agreements and contracts, such agreements are disfavored in the law and there are a number of circumstances under which such agreements are not in part or in their entirety enforced.

Our non-compete lawyers have extensive litigation and trial experience with non-compete and non-solicitation agreements.  Our attorneys have brought and defended preliminary injunctions and lawsuits on behalf of both employers and employees.

If you have any questions, contact one of our employment lawyers by calling one of our offices or using the following form.