Q: I have been asked by a prospective employer to sign a non-compete. I live and work in Massachusetts. I was told that these are virtually unenforceable in Massachusetts, especially if the parameters are not well-defined.
A: Non-competes are most often used in industries and roles, where employees are exposed to information which makes a product or service unique or competitive. We have seen it used when an employee is involved in developing a proprietary software or when a scientist might be involved in developing a break-through therapy or drug treatment.
I consulted Attorney Samantha Halem, a partner with Marshall Halem. Halem shared:
Currently non-competes are enforceable in Massachusetts provided they are necessary to protect a legitimate business interest, reasonably limited in time and space, and consonant with the public interest. In determining whether to uphold a non-compete, the court will look at the specific situation, including the nature of the employee’s role, the company’s “need” to restrain the employee from working for a competitor, the duration and type of non-compete, and whether anything changed in the employee’s employment between when the employee signed and when the employee sought to compete. It is impossible, without knowing more, to know if a particular non-compete is enforceable. I advise clients to narrowly tailor their non-competes and only use them with certain types of employees. However, many companies do use them across the board and that can harm their argument that they have a legitimate business interest.
Also, there is a movement in Massachusetts to alter our non-compete laws. Last year we came very close to overhauling the law. However, ultimately the two competing bills could not be reconciled and neither were signed into law. A new bill has again been introduced, so it is possible that non-competes will be more restricted in Massachusetts in the future.
When we source talent for our clients, we often encounter non-compete agreements in engineering, sales or product development roles. Employees are wise to hire an attorney to review any non-compete before signing one. As Halem advises, if the non-compete is reasonable, the non-compete can be enforceable. If the non-compete is overly broad and restricts the employee from using their general know-how and talents elsewhere, the non-compete is typically unenforceable.
I expect that in 2018, we will see more legislation restricting the use of non-competes in Massachusetts.