This requirement is waived if the employee violates the non-compete obligation. All civil actions related to the non-compete obligations of employees subject to this section shall be brought in the county where the employee resides or, if the employer and employee have been mutually agreed, in the county of Suffolk; provided that, in such an action brought in the county of Suffolk, the Supreme Court or the hearing of the Commercial Court of the Supreme Court has exclusive jurisdiction. If an employee violates the terms of a non-compete obligation, an employer can sue to enforce the agreement. The burden of proof in such a dispute lies with the employer. This means that the employer must prove that the non-compete obligation meets the above elements and that the employee has signed the non-compete obligation. All Stainless, Inc.c. Colby, 364 Mass. 773 (1974) “The duty not to compete contained in a contract for personal services is performed if it is reasonable on the basis of all the circumstances”. Marine Contractors Co., Inc.c. Hurley, 365 Mass.
280 (1974) “The agreement not to compete with the Navy was appropriate in terms of time and space.” Certain requirements must be met before a non-compete obligation can be enforced in Massachusetts. If you are an employer who wants to include a non-compete clause in your employment contracts, or if you are a person who is subject to it yourself, you should consult an experienced attorney in Massachusetts to help you get through this complicated form of employment contract conflict. In practice, employers may be able to circumvent the problem of substantial changes by including language in their form of non-compete obligation, which makes it clear that the restrictions continue to apply regardless of significant or minor changes in the obligations. But without such wording, new agreements are needed if employers are to protect their legitimate business interests through non-compete obligations. In addition, employers should keep in mind that any new non-compete obligation closed after October 1, 2018 must comply with the strict requirements of the Massachusetts Noncompete Act. While employers may hope to avoid these requirements by relying on legacy agreements, such an approach could prove fatal in the face of a significant change or gap in an employee`s duties. In particular, there is no exception to the obligation of compulsory garden leave if an employee resigns or is dismissed for good cause. Even if an employee terminates his or her employment to work for a direct competitor, the employer must still pay either garden leave pay (or any other agreed consideration) in order to bind that employee to his or her non-compete obligation after the end of the employment relationship.
As summer draws to a close, where are Massachusetts employers who continue to enforce non-compete obligations? While the FTC cloud might one day rain down on the uncompetitive employer parade, the picture for Massachusetts employers at that time may not be as sunny as it used to be, but it rests on the MNCA. This means that solicitation prohibitions remain in the employer`s toolbox and non-compete obligations remain achievable, even though employers must comply with all elements of CNL. Many considerations remain to be taken into consideration. Among them, they continue to draft non-compete clauses to describe the trade secrets and confidential information that employers seek to protect, the applicable goodwill and customer relationships that are essential to their business, as well as any relevant specialized and unique training methods that they consider sacred. They must also consider the unusual skills, knowledge and abilities of employees who want to discourage them from competing and, of course, the relevance of the provisions in terms of geographic scope and time and whether an employee`s role has changed, which may require a new agreement. Of course, this list is not exhaustive. The bottom line remains: neat designs will avoid future headaches for Massachusetts employers. The Act also sets standards for other traditional common law requirements for appropriate non-compete obligations, such as. B the scope of restrictions and interests worthy of protection.
In terms of time, geography, and activity restrictions, a non-compete obligation in Massachusetts is only enforceable if the time limit applies for one year or less after employment (unless the employee violates his or her fiduciary duty or steals the employer`s property, in which case the non-compete obligation can last up to 2 years). And a non-compete obligation is considered appropriate if (i) it is limited to geographic areas where the employee has provided services or had a material presence or significant influence in the last 2 years of employment, and (ii) is limited to the specific types of services that the employee has provided in the last 2 years of employment. The law also recognizes three legitimate business interests, at least one of which must be protected by the non-compete obligation to be enforceable: trade secrets, confidential information, and employer goodwill. More recently, on July 15, 2021, in KPM Analytics North America Corporation v. Blue Sun Scientific, LLC et al., 2021 WL 2982866, U.S. District Judge Timothy S. Hillman made it clear that employers must scrupulously abide by each of the contours of the 2018 executive order for post-MNCA agreements. In this case, Hillman J. held that a non-compete agreement was unenforceable because it did not indicate that the employee had the right to consult a lawyer prior to signing and did not include a provision on gardening leave or the inclusion of other mutually agreed considerations. Finally, as many readers may also know, on July 9, 2021, President Biden issued his “Executive Order on Promoting Competition in the U.S. Economy,” in which he called on the Federal Trade Commission to “restrict the unfair use of non-compete obligations and other clauses that may unfairly restrict worker mobility.” See The Biden administration`s executive order aims to “restrict the unfair use of non-compete obligations,” which is linked here.
The employer is also required to inform the employee of the agreement. Termination obligations change depending on when the employee is asked to sign the agreement. .