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Do you need your employees to sign a non-compete agreement?

| Nov 9, 2020 | Business Law |

As a new business owner, you may have read about companies requiring their employees to sign non-compete agreements. You may be wondering if you should do this with anyone you take on — particularly if they’re likely to have access to sensitive information.

Is a non-compete the right thing to get? Maybe.

For some professions, Massachusetts law makes it illegal to insist that someone sign a non-compete agreement. So if you are looking to employ someone as a doctor, nurse, psychologist, lawyer, social worker or as broadcaster, then the answer is clear: You cannot ask them to sign one. 

A non-compete may be an option for other industries, however, if you meet the conditions the state law sets out. These include:

  • You must need the non-compete to protect trade secrets, confidential information or your goodwill.
  • You cannot use a different type of restrictive agreement for the same purpose.

In general, Massachusetts prefers employers not to use non-competes. If you do meet the conditions to use one, the state places limits on how far-reaching it can be:

  • You cannot ask for it to last more than one year.
  • You must limit it only to the types of services you offer.
  • You need to restrict it geographically to the area the employee works in or has influence in.

Placing restrictions on an employee will come at a cost to you. The law requires you to have a payment agreement to compensate them for the time they are not allowed to work. If you still think that you may need specific employees to sign a non-compete agreement, it is worth your while to seek an attorney’s help when drawing one up. Many employers have found their non-compete agreements do not stand up in court, and an experienced advocate can help you avoid mistakes.