Noncompetes serve an important purpose as they help protect your business interests when employees leave. But what happens when you try to uphold one of these agreements and your former employee pushes back? This blog explores this scenario and how you might prevent future disputes from happening.
When noncompetes fail under Massachusetts law
Noncompete agreements do not automatically hold up in court. In Massachusetts, enforcement frequently fails because the document did not meet the specific, rigorous protocols of the Massachusetts Noncompetition Agreement Act.
For a contract to be valid, it is not enough to simply be in writing. The document must expressly state that the employee has the right to consult with counsel prior to signing. If this specific clause is missing, the agreement can become invalid.
The law requires that the document be given either with the formal offer of employment or at least 10 business days before the job starts. If you missed this window the court may refuse to enforce it.
Where issues commonly occur
The following issues can trigger noncompete disputes:
- Overly broad geographic restrictions beyond where the employee worked or had material influence
- Time periods exceeding the statutory limit of 12 months
- Failure to provide garden leave pay (50% of salary) or other mutually agreed-upon consideration specified in the contract
- Lack of a legitimate business interest requiring protection, such as trade secrets or goodwill
Even when you believe your agreement is airtight, your former employee may find grounds to contest it. Massachusetts courts examine each provision against these statutory mandates to determine enforceability.
What taking action can backfire
When you attempt to enforce a noncompete, you risk:
- Court rulings that rewrite your agreement to be much weaker than you intended, or throw it out completely.
- Exposure to counterclaims from the former employee for damages or interference with their new job.
There is also reputational consequences to consider. Public court proceedings can reveal sensitive business information and strain relationships with current employees who may view enforcement actions negatively.
How you can reduce future potential disputes
Preventing disputes starts long before enforcement becomes necessary. A well-drafted noncompete agreement can become your first line of defense.
Legal counsel can provide guidance during the drafting process to check if the terms meets all Massachusetts requirements. An attorney can also tailor the geographic scope and time period to match your specific business interests. This makes the agreement more likely to hold up if challenged.
Consider whether a noncompete is truly the right tool for your situation. In some cases, a nonsolicitation or confidentiality agreement may better protect your interests with fewer risks.
