Massachusetts Non Compete Agreements for Independent Contractors
Navigating Non-Compete Agreements for Independent ContractorsUnderstanding non-compete agreements can be challenging, especially when dealing with independent contractors. This area of law presents unique complexities that require careful consideration.
Why Employ a Noncompete with an Independent ContractorEmployers may seek non-compete agreements with independent contractors for similar reasons as with W2 employees. These motives often revolve around safeguarding proprietary information, trade secrets, or preserving the company's reputation.
Independent contractors may have significant client interactions, raising concerns that they might transfer the company's goodwill to a competitor. These concerns can be valid business interests justifying the use of a non-compete agreement. Are Non Compete Agreements Enforceable Against Independent Contractors?In Massachusetts, a statute governs the enforcement of non-compete agreements, and explicitly applies to both employees and independent contractors. Understanding the general guidelines for enforcing non-competes in the state is crucial.
However, the nature of independent contractor status can inherently conflict with the provisions of a non-compete agreement. To qualify as an independent contractor, the individual must operate with autonomy, free from excessive control. A non-compete restricting their activities post-termination might be viewed as exerting undue control. Additionally, an independent contractor must be running an independent business providing services to various clients. A non-compete that hinders competition during the employment term contradicts this essential element. Risks Associated with Implementing Noncompetes for Independent ContractorsOne risk is that the agreement may not stand up in court, given the common defenses available to both employees and independent contractors.
However, a more substantial risk lies in the potential reclassification of the independent contractor as an employee due to the agreement's terms. In practical terms, this could lead to enforcement challenges and counterclaims from the contractor regarding misclassification. Massachusetts employment laws are rigorously enforced, including the Independent Contractor Law, which imposes strict criteria for contractor hiring. Constructing an Effective Independent Contractor AgreementIf you decide to incorporate a non-compete clause, it's crucial to seek legal counsel for guidance. Assessing the specific risks in your situation and mitigating them is vital. Alternatively, you can include other provisions in the agreement that carry fewer risks of reclassifying the worker as an employee.
The limitations on non-compete enforcement do not apply to nondisclosure or non-solicitation provisions. Therefore, consider including a confidentiality clause in your independent contractor agreement to protect proprietary information. Likewise, a provision restricting the contractor from soliciting customers or employees post-termination may suffice to safeguard your company's goodwill. To protect your intellectual property rights without jeopardizing the contractor's status, employ a "work for hire" clause. This explicitly stipulates that any work commissioned and paid for belongs to the company, not the contractor. |
We're Here to Help.OR
|
Meet Our Employment 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, and helped thousands of clients on both the employee and employer side with severance and non compete review and negotiation, wage and hour, discrimination and retaliation disputes, and advice about employment law generally.
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 clients with wage and hour disputes, employment discrimination and retaliation claims, review and negotiation of severance and non compete agreements, and advice to both employees and employers about navigating complex employment situations.
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 has helped clients with review and negotiation of severance and non compete agreements, wage and hour disputes, employment and discrimination claims, and advice to small business owners about employment law and other business matters.
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 on the employee and employer side with all varieties of employment law issues, including employment discrimination, retaliation, and wage and hour issues, litigation in MCAD and state and federal courts, and advising employers about employment policies and practices.
Sharleen Tinnin: Sharleen is a 2010 graduate of Northeastern University School of Law, and has been with slnlaw since 2023. Prior to joining slnlaw, she worked with King, Tilden, McEttrick & Brink, P.C. on complex civil litigation matters. She previously worked for the United States Department of Justice, and received an "Excellence in Justice" award in 2017. Sharleen has helped clients with wage and hour, discrimination and retaliation disputes, review and negotiation of severance agreements, and litigation in MCAD and state and federal courts on employment related issues.
How We Can Help
Our experienced legal team can provide expert guidance to help you navigate the complexities of non-compete agreements for independent contractors, ensuring your business interests are protected while minimizing potential legal pitfalls. 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.
|
|
|
|
|
