Employers often use non-compete clauses in employment contracts to prevent employees from leaving the company and joining competitors. Enforcing these clauses in Massachusetts isn’t necessarily straightforward. Courts in the state have specific requirements and limitations that affect how they enforce these agreements.
What makes a non-compete clause enforceable?
Massachusetts courts set clear guidelines for enforcing non-compete clauses. A key requirement is that the clause must remain reasonable in scope, duration, and geographic reach. If the non-compete is too broad, the court may rule it unenforceable. For example, a clause restricting an employee from working nationwide for several years might be considered excessive. Non-compete clauses should be specific enough to protect an employer’s legitimate business interests while allowing the employee to find work.
The role of consideration in non-compete clauses
Consideration plays a significant role in determining the enforceability of non-compete clauses. In Massachusetts, an employer must offer something of value in exchange for the employee agreeing to the non-compete. This could be a new job offer, a raise, or other benefits that make the agreement reasonable and enforceable.
Massachusetts’s restrictions on non-compete clauses
Massachusetts imposes unique restrictions on non-compete clauses. For example, they cannot apply to employees who earn less than $75,000 per year, and the duration of the restriction cannot exceed one year. Additionally, employees must sign non-competes when they begin employment or receive a promotion. If an employee is asked to sign a non-compete after starting the job, the employer must offer new compensation in exchange for the agreement.
Massachusetts courts enforce non-compete clauses when they meet specific requirements. They must be reasonable in scope and duration, include proper consideration, and comply with state restrictions. When these criteria are met, the courts are more likely to uphold the clauses to protect businesses from unfair competition.
