Non Compete Agreements: Case Studies

Enforcing an agreement not to compete in Massachusetts is not always straightforward. Under Massachusetts common law, there were and are many defenses to these agreements available to employees. Below are just a few of the many examples of how we have been able to help employers and employees with disputes arising from agreements not to compete or not to solicit.

Employer's Failure to Pay Wages or Commissions

If the employer fails to pay wages or commissions as agreed, the employee may be released from their obligations under the agreement. This is based on a traditional principle of contract law. If one party materially breaches the agreement, the other may be excused from performance. Below are some examples.

Sales representatives for a staffing company who were able to start their own business despite a four year restriction on competition.
A hair stylist who was able to resist an aggressive attempt to enforce a restrictive agreement after she started her own salon based in part on a wage violation.
Service technicians for a printer company who were able to start their own business despite a limiting agreement.

Independent Contractors and Non Compete Agreements

In Massachusetts, it is not legal to classify an employee as an independent contractor unless they meet three very specific tests. One of these is that they are in the business of offering the same services to other customers or companies.

If you are an independent contractor with a covenant not to compete, you can argue that the agreement cannot apply to you because you are an independent contractor. You also may have a counterclaim for improper classification under the independent contractor laws. Below are some examples of people we have helped defend against an enforcement action based on their independent contractor status.

An individual who provided contracted services to a telecom company was able to take a job with a competitor despite his agreement.
A handyman employed as an independent contractor was pressured into a restrictive covenant after he began providing services. He was able to start his own company despite the agreement and recover damages for the employer's violation of the independent contractor law.

Overbroad and Unnecessary Non Compete Restrictions

A post employment restriction on competition must be reasonably necessary to protect the employer's legitimate business interest. Legitimate business interests generally require trade secrets, confidential information, or employer goodwill. Below are some examples employees we have helped resolve disputes where the employment agreements did not meet this requirement.

An analyst for a market research company was able to take a new job despite his agreement where there was no legitimate employer interest to protect.
An entry level sales representative for a telecom company was able to take a new job with a competitor despite his agreement.

Early Resolution of Non Compete Disputes

Many non competition disputes begin with a "cease and desist" letter. This is usually a strongly worded letter from the employer's attorney sent after you have started a new job or a new business venture. It usually makes several demands, includes a deadline for response, and threatens a lawsuit.

Though these letters can be alarming, they usually present an opportunity to resolve the dispute before litigation. Below are some examples of people we have helped negotiate a resolution after receiving a cease and desist letter.

An employee of a casting company received a threatening letter from his former employer after he started a new job at a competitor. After providing assurances that he did not have any confidential information, the former employer withdrew its threats and he was able to continue at his new job.
An employee of a waxing salon left to start her own business. She received a cease and desist letter from her former employer, citing an agreement she had never been given a copy of. After reviewing the agreement we were able to demonstrate that it did not apply.

Can We Help You?

We have years of experience representing people in non compete lawsuits in Massachusetts state and federal courts, as well as responding to cease and desist letters, and we would be happy to help. You can use the button below to schedule a call back from a member of our team, give us a call at 781-784-2322, or fill out our web form to let us know a little more about your situation.

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