Is Your Noncompete Agreement Enforceable?

The noncompete agreement is a common agreement in many professions. If you currently have a noncompete agreement you may be interested to learn that it may not be enforceable (at least partly…and more on this in this article) if you are a physician, nurse, psychologist, social worker or work in the broadcasting industry. In addition, this article will help you learn what an enforceable noncompete agreement looks like if you are an employer considering implementing such an agreement.

What Makes a Noncompete Enforceable in Massachusetts?

• the Noncompete must be in writing and signed
  
• Once employment has started, the noncompete must be supported by “fair and reasonable consideration [some form of compensation or other benefit to you] independent from the continuation of employment.” MGL C.149 s24L(b)(ii). You must also receive notice of the agreement prior the agreement being considered in effect. Your right to counsel must be indicated on the agreement, and it must be signed by both the employer and employee.
  
• the scope of the agreement must be limited to protecting the confidential information, trade secrets and goodwill of the company.
  
• Duration of the noncompete is limited to 12 months from the cessation of employment unless a breach of fiduciary duty on the part of the employee may be claimed by the employer, in which case this time limit is extended.
  
• Geographic reach of the noncompete agreement is also a factor. Contact our offices for a review of your current agreement for more information on this issue.
  
• Activities restricted by the noncompete agreement must be reasonable in relation to the interests being protected by the business.
  
• A garden leave clause must be present…essentially a clause given some form of consideration (again, compensation or other benefit) to the employee during the restricted period unless certain criteria are met.

Certain Types of Workers are not Covered by a Noncompete Agreement in Massachusetts

A nonexempt employee, as classified under the Fair Labor Standards Act, 29 U.S.C. 201-219 would not be held by a Court in Massachusetts to have an enforceable noncompete agreement against him or her. Similarly, undergraduate or graduate students in an internship or short term employment while a full or part-time employee and while enrolled full or part-time in a graduate or undergraduate program cannot be the subject of enforcement of a noncompete agreement in Massachusetts. Finally, an employee under 18 years of age or that has been terminated without cause or laid off cannot be held to the terms of a noncompete agreement in Massachusetts under most circumstances.

Physicians and Noncompete Agreements

Restrictions on physicians in a noncompete agreement in Massachusetts will typically be found unenforceable. This fact does not mean that the remainder of an agreement is necessarily unenforceable. Contact our offices to learn more.

Any contract or agreement which creates or establishes the terms of a partnership, employment, or any other form of professional relationship with a physician registered to practice medicine pursuant to section two, which includes any restriction of the right of such physician to practice medicine in any geographic area for any period of time after the termination of such partnership, employment or professional relationship shall be void and unenforceable with respect to said restriction; provided, however, that nothing herein shall render void or unenforceable the remaining provisions of any such contract or agreement.

MGL C112 s12X

Nurse and Noncompete Agreements in Massachusetts

Similar to the law proscribing geographic and other restrictions in a noncompete agreement in Massachusetts with respect to physicians, nurses enjoy the same protection in most cases as seen here:

Any contract or agreement which creates or establishes the terms of a partnership, employment, or any other form of professional relationship with a nurse registered to practice as a registered nurse pursuant to section seventy-four, or a practical nurse registered to practice as a licensed practical nurse pursuant to section seventy-four A, which includes any restriction of the right of such nurse to practice as a nurse in any geographical area for any period of time after the termination of such partnership, employment or professional relationship shall be void and unenforceable with respect to said restriction. Nothing in this section shall render void or unenforceable any other provision of any such contract or agreement.

MGL c112 s74D

Noncompete Agreements and Psychologists, Social Workers and Broadcasting Industry Workers

In many cases laws protect psychologists, social workers and broadcasting industry workers from the restrictive effects of a noncompete agreement in Massachusetts. These laws can be found at MGL C112, s129B, MGL C112, s135C, and MGL C149 s186 respectively.

Contact us at 978-273-8337 to learn more about noncompete agreements. Attorney Gaudet can draft, revise or review an existing agreement for your company, or, if you are an employee, to help you better understand the implications of such an agreement.

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