Understanding noncompete agreements is useful for both business owners and employees. A business owner understandably wants to protect his business interests and would like to prevent the occurrence of training and educating an employee on his or her specific business practices, tactics and skills only to have that employee leave and begin competing in the same market. An employee understandably wants to be free to earn a living, and at the same time have an incentive for learning and developing new skills.
In Massachusetts, noncompete agreements are enforceable if they are reasonable in scope and duration. What exactly does this mean? Some factors considered are whether the agreement is reasonable with respect to time (How long is the employee prevented from engaging in a specific type of business?), geographic location (How far away does the employee have to go if they want to do business right away?), fairness to the employer, fairness to the employee (Is the prohibition on the employee’s business reasonable?), etc. It should also be noted that noncompete agreements are not enforceable against attorneys, physicians and certain broadcast employees.
Noncompetes have many conditions, and are specific to the type of business that the employer conducts. Details should be taken into account in both the preparation and signing of an agreement. It is highly suggested that you seek advice from an attorney prior to preparing or signing a noncompete.