Attempts to Enforce a 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.
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
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.
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