Beware of Free Non Compete Templates
Why Free is Not Always FreeIf you're considering using non-competition agreements in your business, chances are you've searched the web for information. During your search, you've likely come across several ads for "free" or very low cost non-compete agreement templates.
Most of these templates follow a similar format. You input your desired information, such as the duration of the restricted period and employee details. The result is a form agreement that may or may not be available for download and use without setting up an account or making a payment. However, the main issue with these "free" templates goes beyond the nominal charges. The real problem is that none of the seven services we tested produced an agreement that would be enforceable under Massachusetts law. This means that any employer relying on these templates to safeguard their trade secrets and goodwill could find themselves vulnerable once their key employees depart. An agreement that could ultimately cost thousands of dollars in legal fees and leave your business unprotected is far from "free." What Was Missing From the "Free" Non Compete Templates?1. Garden Leave ProvisionsFor any non-compete agreement signed on or after October 1, 2018, Massachusetts law mandates the inclusion of a "garden leave" provision. This provision ensures that the employee is entitled to receive 50% of their highest earnings during the restricted period, unless the employer waives the non-compete. Failure to include this provision can render the agreement invalid. A court may either require the employer to pay the employee or refuse to enforce the agreement altogether.
2. Appropriate Limit on RestrictionsMassachusetts law also imposes a 12-month limit on the duration of restricted non-compete periods. If your agreement exceeds this time frame, a court may either adjust it down to one year or choose not to enforce it at all.
3. Time for Employee to ReviewIn Massachusetts, presenting a new employee with a non-compete agreement on their first day is no longer acceptable. The law requires that employees be given ten days to review and consider the agreement before signing. This mandatory review period must be explicitly stated in the agreement. Failure to include it can result in non-enforceability.
4. Right to Consult an AttorneyIn addition to providing time to review, your agreement must advise the employee that they can consult with an attorney before signing the agreement. Like the time to review, this is difficult for a court to cure after the fact. If you do not have this provision in your agreement, it is highly likely that it will not be enforced.
5. Acnowledgment of Massachusetts LawThe "free" templates we tested allowed us to specify a state other than Massachusetts as the governing law for the agreement. While this may seem like a way to avoid the Massachusetts statute's requirements, it's not valid. The statute clearly states that Massachusetts law governs any non-compete agreement with an employee or contractor residing or working in Massachusetts, regardless of what the agreement specifies.
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Other Issues
These "free" templates had numerous other shortcomings. These concerns are significant, even if they don't render the agreement entirely invalid. For example, most templates did not address the ownership of intellectual property created during employment, leaving employers vulnerable to claims of copyright infringement. Additionally, these templates offered no guidance on reasonable time limits and geographical scopes, which can lead to expensive legal disputes over the agreement's terms. Seeking experienced legal advice beforehand can prevent such costly litigation.
Meet Our Employment Lawyers
Emily Smith-Lee is the owner and founder of slnlaw. She is a 1996 graduate of Boston College Law School. She was previously a partner at the Boston office of a large international firm, where she worked for thirteen years before starting the firm that became slnlaw in 2009. She has been recognized as Massachusetts Superlawyer each year since 2013, and in 2018 earned recognition as one of Massachusetts Lawyers Weekly's Lawyers of the Year. She has written a book on employment law: Rules of the Road, What You Need to Know About Employment Laws in Massachusetts, and helped thousands of clients on both the employee and employer side with severance and non compete review and negotiation, wage and hour, discrimination and retaliation disputes, and advice about employment law generally.
Rebecca Rogers: Rebecca is a 2006 graduate of Boston College Law School, and has worked with slnlaw since 2013. She previously worked as an intellectual property litigation attorney for Fish & Richardson in Boston, Massachusetts, and clerked for the Massachusetts Supreme Judicial Court. Rebecca has helped clients with wage and hour disputes, employment discrimination and retaliation claims, review and negotiation of severance and non compete agreements, and advice to both employees and employers about navigating complex employment situations.
Jenna Ordway: Jenna is a 2013 graduate of Quinnipiac Law School, and also earned an LLM in Taxation from Boston University in 2015. She has been affiliated with slnlaw since 2011, first as a law clerk and then as an attorney. Jenna has been recognized since 2019 as a "Rising Star" by Massachusetts Superlawyers. Jenna has helped clients with review and negotiation of severance and non compete agreements, wage and hour disputes, employment and discrimination claims, and advice to small business owners about employment law and other business matters.
Elijah Bresley: Eli is a 2014 graduate of Seton Hall Law school, and has worked with slnlaw since 2020. He previously worked for a boutique employment law firm outside of Boston, and then for the Labor and Employment department of a large Boston firm. He also spent a year clerking for the judges of the Superior Court in Hartford, Connecticut. Eli has helped clients on the employee and employer side with all varieties of employment law issues, including employment discrimination, retaliation, and wage and hour issues, litigation in MCAD and state and federal courts, and advising employers about employment policies and practices.
Sharleen Tinnin: Sharleen is a 2010 graduate of Northeastern University School of Law, and has been with slnlaw since 2023. Prior to joining slnlaw, she worked with King, Tilden, McEttrick & Brink, P.C. on complex civil litigation matters. She previously worked for the United States Department of Justice, and received an "Excellence in Justice" award in 2017. Sharleen has helped clients with wage and hour, discrimination and retaliation disputes, review and negotiation of severance agreements, and litigation in MCAD and state and federal courts on employment related issues.
How We Can Help
Our experienced legal team can provide you with professionally crafted, Massachusetts-compliant non-compete agreements tailored to your specific business needs, ensuring your trade secrets and goodwill are protected, and helping you avoid costly legal pitfalls. You can use the button below to schedule a call back from a member of our team, or give us a call at 781-784-2322.
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