What is a Fair Non-Compete Clause in Massachusetts Employment Contracts?

Question from Jeff, What is a Fair Non-Compete Clause in Massachusetts Employment Contracts?

Answer from AI:

In Massachusetts, a reasonable non-compete clause must balance the employer’s need to protect their interests with the employee’s right to earn a living. Here’s what makes a non-compete clause reasonable in the state:

1. Duration: The clause should not exceed a reasonable period, typically up to three years. This duration is considered sufficient to protect the employer without unduly restricting the employee.

2. Geographic Scope: The area covered should be limited to where the employer operates. It should not be overly broad, such as covering the entire state unless justified by the employer’s business needs.

3. Type of Work: The clause should only restrict activities that are directly competitive. It should not be so broad as to prevent the employee from working in their field altogether.

4. Consideration: For existing employees, the employer must provide something of value (consideration) for the non-compete to be enforceable. This could be a bonus, stock options, or other benefits.

5. Exceptions: Massachusetts law prohibits non-competes for certain workers, including low-wage employees and some professionals. The clause must not apply to these groups.

6. Judicial Review: Courts assess whether the clause is necessary to protect the employer’s interests and whether it causes undue hardship to the employee.

If you’re unsure about a non-compete clause, consulting a lawyer is advisable to ensure your rights are protected. For more information, you can review Massachusetts Non-Compete Law.