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.