Legitimate Business Interest Justifying a Non Compete Agreement
What is a "Legitimate Interest" That Supports Enforcement of a Non Compete?The enforcement of a non-compete agreement hinges on whether it's reasonably necessary to safeguard the employer's legitimate business interest. This means, whether your agreement is or is not covered by the Massachusetts Non Compete Act, your employer must have something the law recognizes to protect in order to stop you from working for a competitor.
Generally speaking, the interests an employer can protect with a non compete fall into one of two categories: trade secrets and confidential information or employer goodwill. Whether these interests apply to you is highly fact-specific, and will depend on the nature of the job you held that is subject to the non compete. What Doesn't Qualify as a Legitimate Business InterestMerely desiring to prevent employees from working for competitors does not constitute a legitimate business interest. For instance, a back-office employee with no customer relationships or access to confidential information is unlikely to be bound by a non-compete agreement.
The new Massachusetts non-compete law explicitly addresses legitimate business interests. It codifies common law principles regarding trade secrets, confidential information, and goodwill. Additionally, it excludes certain categories of employees unlikely to pose concerns in these areas, such as non-exempt workers, students, and employees under 18 years old. Legitimate Business Interests and the Scope of the Non CompeteThe scope of a non-compete must align with the claimed legitimate interest. If the agreement specifies a particular geographic area, it should correspond to the employee's territory.
For instance, a nationwide non-compete may be enforceable for a sales representative with nationwide responsibilities. Conversely, a 20-mile restriction could be considered overly restrictive for a hairstylist. When safeguarding trade secrets, the duration of the non-compete should be considered. A trade secret that takes a year to replicate may justify a one-year non-compete, while one with rapidly depreciating value might not. |
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Meet Our Employment and Non Compete 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, been interviewed by the Massachusetts Superlawyers magazine about non compete agreements, and written an op-ed in the New York Times about the dangers of non competes. Along with the rest of the slnlaw team, she has helped hundreds of clients navigate, negotiate, or defend against their non compete agreements.
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 many clients understand and evaluate their non compete agreements and develop strategies for defending against non compete enforcement and negotiating resolution.
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 works with employers to develop reasonable and enforceable employee agreements, including non competes. She has also helped employees understand and evaluate their non compete agreements and develop strategies for defending against non compete enforcement and negotiating resolution.
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 both evaluate and negotiate their non compete agreements, and defended non compete claims in state and federal courts.
How We Can Help
Understanding and applying these principles are crucial when navigating non-compete agreements. Our experienced employment attorney can help ensure you make informed decisions tailored to your specific circumstances. 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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