This form is a Post-Employment Restrictions on Competition for use with exiting employees exposed to commercial trade secrets or other confidential information as part of their job. This form includes a Noncompetition Covenant as well as other relevant clauses, such as a Savings Clause, a Consulting Option, and an Assignment Clause, that can be integrated into any agreement with the former employee.
Massachusetts Post-Employment Restrictions on Competition, also known as non-compete agreements, are legal provisions that can restrict the activities of employees after they leave their current employment. These restrictions are designed to protect the employer's business interests by preventing employees from using their knowledge, skills, and contacts to compete with their former employer. There are several types of post-employment restrictions on competition in Massachusetts, including: 1. Non-competition agreements: These agreements prohibit employees from working for or starting a business that directly competes with their former employer within a certain geographic area and time frame. 2. Non-solicitation agreements: These agreements prohibit employees from soliciting the former employer's clients or customers after leaving their employment. This can include directly contacting clients, sending promotional materials, or enticing clients to switch to a new employer. 3. Non-disclosure agreements: Although not specific to competition, non-disclosure agreements (NDAs) are often included in post-employment restriction clauses. These agreements prevent employees from disclosing or using confidential information they acquired during their employment, such as trade secrets, customer lists, or proprietary processes. 4. Non-disparagement agreements: Some post-employment restriction agreements include clauses that prevent employees from making negative or disparaging comments about their former employer. These clauses are intended to protect the employer's reputation and prevent the employee from damaging their business relationships. It's important to note that Massachusetts has specific requirements for the enforceability of post-employment restriction agreements. According to the Massachusetts Noncom petition Agreement Act (INCA), which went into effect in 2018, non-compete agreements must meet certain criteria to be considered valid and enforceable. These criteria include: a. Reasonable duration: The restriction period should be reasonable, usually limited to one year or less. b. Limited geographic scope: The restriction should be limited to a specific geographic location where the former employer conducts business. c. Legitimate business interest: The restriction must protect legitimate business interests, such as trade secrets, confidential information, or goodwill. d. Notice and consideration: The employee must receive notice of the non-compete agreement before accepting the job offer, and there must be adequate consideration provided in exchange for the employee's agreement to the restriction. Furthermore, the INCA prohibits the use of non-compete agreements for certain categories of employees, such as non-exempt employees and those terminated without cause or laid off. It also necessitates that employers provide garden leave or other mutually-agreed-upon consideration if non-compete restrictions are to be enforced against employees. In summary, Massachusetts Post-Employment Restrictions on Competition encompass various agreements aimed at protecting employers' interests. These agreements include non-competition, non-solicitation, non-disclosure, and non-disparagement clauses. It is crucial for employers and employees alike to understand the enforceability criteria outlined in the Massachusetts Noncom petition Agreement Act.
