Abuse of Non Compete as Tortious Interference and Unfair Competition
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A recent trial court decision illustrates a possible path for employees who feel they have been harmed by a former employer's overreach and improper threats relating to a non compete agreement.
An aesthetician left her employer to start a competing business, and brought suit after the employer contacted her prospective clients and represented that she was restricted by a non compete. The non compete, at least as alleged in the complaint, did not meet all of the requirements of the Massachusetts non compete law, and was therefore unenforceable. The court denied the employer's motion to dismiss her claims of tortious interference with contract and violation of the Massachusetts Unfair Competition statute (Chapter 93A). Each of these are explained more fully below. Abuse of Non Compete as Tortious Interference"Tortious interference" is a recognized claim for interference with your actual or prospective business relationships either for an improper motive or using improper means. These cases are usually about improper means. This is because economic self-interest (i.e., harming a competitor for the sake of benefitting your own business) is considered an acceptable motive under the law.
In this recent decision, the court found plaintiff's claim that the contact with third parties and threatening letter to her knowing that the non compete violated Massachusetts law was sufficient to plead interference by improper means. Abuse of Non Compete as Unfair CompetitionMassachusetts has a statute prohibiting unfair or deceptive practices in trade or commerce, known as Chapter 93A. Generally speaking, 93A does not apply to employment disputes, because the employment relationship is not considered "trade or commerce" under the law.
In this case, however, the court noted that the employment relationship had ended, and the acts complained of occurred outside of that relationship after plaintiff started a competing business. In that situation, 93A did apply, and the plaintiff was allowed to proceed on a claim that the attempts to enforce a non compete that was known to be unenforceable were unfair and deceptive acts under 93A. |
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Implications for Employees With Non Compete Agreements
You should know that this decision was in response to a motion to dismiss, which is a very preliminary motion. At that stage, the court is required to believe all of the factual allegations in a plaintiff's complaint, and can only dismiss the case if there is no basis for the claim as a matter of law.
What that means is that this decision did not result in a judgment that the employers actions in fact were tortious interference or unfair and deceptive practices- only that if what plaintiff said was true, they could be.
If that case does not settle and proceeds through litigation, there will likely be plenty of dispute about whether the non compete was enforceable, and whether the employer knew or should have known it was enforceable, as this allegation was the lynchpin of the claims the court allowed to proceed. It remains to be seen, for example, whether mere doubt about the enforceability of a non compete would support such claims, or whether it has to be clearly and obviously unenforceable.
Nonetheless, this is a helpful decision for employees who are facing interference with their new jobs or new businesses based on a dubious non compete agreement.
What that means is that this decision did not result in a judgment that the employers actions in fact were tortious interference or unfair and deceptive practices- only that if what plaintiff said was true, they could be.
If that case does not settle and proceeds through litigation, there will likely be plenty of dispute about whether the non compete was enforceable, and whether the employer knew or should have known it was enforceable, as this allegation was the lynchpin of the claims the court allowed to proceed. It remains to be seen, for example, whether mere doubt about the enforceability of a non compete would support such claims, or whether it has to be clearly and obviously unenforceable.
Nonetheless, this is a helpful decision for employees who are facing interference with their new jobs or new businesses based on a dubious non compete agreement.
How We Can Help
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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, or give us a call at 781-784-2322.
