What is a Restrictive Covenant in an Employment Agreement?
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A "restricted covenant" is simply an agreement (covenant) not to do something (restrictive). The term is used to describe restrictions placed on an employee that last beyond the termination of their employment. The following are the most common restrictive covenants in employment agreements:
Non Compete: an agreement not to work for a competitor for a specified amount of time (no more than 12 months) after employment ends. Non-Solicitation: an agreement not to solicit employees and/or customers or prospects for a specified time after employment ends. Unlike a non compete, the law places no specific limit on how long a non solicitation agreement can last. Non Disclosure: an agreement not to use or disclose confidential company information. In many cases, this is an obligation employees have at common law anyway, but many employers like to use these agreements to make that obligation clear, define what is considered confidential information, and in some cases impose a particular consequence for violating this duty. The law places no time limit on how long a non disclosure obligation can last under an employment agreement. Learn more here about restrictive covenants in Massachusetts. |
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