What about my non-compete agreement?

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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.

Pattie Hunt Sinacole is a human resources expert and works for First Beacon Group in Hopkinton, an HR consulting firm. She contributes weekly to Boston.com Jobs and the Boston Sunday Globe Money & Careers section.

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