The Future of Noncompetition Agreements in Massachusetts and Beyond

The landscape of employee noncompetition agreements is in flux: most states allow such agreements and many states have enacted legislation that governs them. In Massachusetts, the legislature has considered proposed noncompete bills in each of the past eight years, but has yet to enact any such legislation. On January 20, 2017, a new noncompete bill was filed in the Massachusetts Senate, so it is clear that this issue remains active and that the Massachusetts legislature will continue to consider significant regulation of noncompete agreements in 2017. Additional regulation is being contemplated at the federal level. Employers need to ensure that any noncompete agreements they are using or considering are enforceable and effective, and be confident in their assessment of the impact of any such agreement applicable to a prospective employee. A noncompete agreement is a contract between an employee and his or her employer in which the employee promises not to compete with the employer for a specific period of time and usually within a prescribed geographical area if/when the employment relationship terminates. A noncompete agreement also may restrict an employee from soliciting or accepting business from clients of the former employer for a period of time after termination of employment. In most cases, the employer requires the employee to sign the noncompete agreement when the employee is first hired or receives a promotion, and it is a condition of employment.

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