Non Compete Lawsuit FAQs

Frequently Asked Questions About Responding to a Non Compete Lawsuit

For most of our clients, being sued under a non compete agreement is a new experience. People often don't know what questions to even ask at the beginning. Below are answers to some frequently asked questions about defending a non compete lawsuit. You can also read more about what to expect as a defendant in a civil suit.

Do I Have to Stop Working Because I Was Sued?

A lawsuit by itself does not have the power to stop an employee from working, unless and until there is a court order. The complaint and whatever other papers you were served with are the plaintiff's (your former employer's) statement of why they feel they are entitled to the relief they are seeking. It is just the start of the process, and it is the court that makes the determination about what you can and cannot do under the agreement. 

That said, the earlier you consult with counsel the better, because there may be some changes it would be wise to make at the beginning to reduce your risk. For example, if you have any information belonging to your former employer, often we recommend turning that over to your lawyer to hold until the dispute is resolved, so that there can be no question about you using any confidential information in your new job or business.

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Wondering About Your Defenses to a Non Compete?

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Will I Have to Go To Court?

If your former employer has filed a motion for preliminary injunction, there will be a hearing scheduled. This usually happens within a week or two after the complaint is filed. Most of the time, however, the hearing will involve the court's review of affidavits and the arguments/presentations of the lawyer. It is rare that at this early stage you will have to appear and testify in court. It is also more often than not the case that once you have a lawyer involved, you can negotiate a resolution with your former employer before appearing in court. If this is not possible, however, and your case does go to a hearing, you should be able to rely on your lawyer to do the heavy lifting, present your defenses, and guide you through that process.

How Do I Know If It Is Worth Fighting the Non Compete Suit?

As part of our initial case assessment, we will review with you the likelihood that the court will enforce your agreement and any other defenses or counterclaims you may have. Your non competition agreement may restrict you for an unreasonable amount of time, or may not comply with the new Massachusetts non compete law. You may have other common defenses available as well. Before we file a response to the complaint, we will do this assessment and work with you to come up with a strategy.  Whether that strategy focuses on an early settlement or a vigorous defense will be informed by the analysis of your defenses and counterclaims.

Will I Have to Pay Damages to My Employer?

In theory, this is possible. Most often what the employer is mainly looking for is a court order that prevents the employee from competing during the period of time specified in the agreement. Most often if a case is not settled before the preliminary injunction hearing, the outcome of the injunction essentially ends the case. If the court orders you not to compete, that is usually all that the employer is seeking. If the court denies the injunction, most employers will not continue the case.

Some agreements have a provision calling for liquidated damages. This is an amount set in the contract that you agree to pay if you compete against the employer. These provisions are not always enforceable, depending on the circumstances. Some agreements also state that the employee will pay the employer's attorneys' fees if they are found in violation of the non compete.

How Can They Stop Me From Working if They Laid Me Off?

This is something many people struggle with. If your non compete agreement was signed before October 1, 2018, the unfortunate answer is yes, they can, provided the agreement is otherwise enforceable. The good news for many is that Massachusetts lawmakers have recognized the unfairness of that result, and for any non compete agreement signed after October 1, 2018, the restrictions cannot be enforced against you if your termination was not your fault.  

Does the Employer Have to Pay Me to Stay Out of Work?

Again, the answer to this question depends on when you signed your non compete agreement. Under the old law, employers did not have to pay anything for your tie out of work (though you most likely can collect unemployment benefits). If you signed your agreement after October 1, 2018, under most circumstances your employer has to pay you at least 50% of your highest earnings with them for the period of restriction under your agreement (for example, if you are prohibited from competing for 12 months, they have to continue paying you 50% of your salary for those 12 months).

Can I Sue My Employer for Trying to Keep Me From Working?

That depends. On the one hand, your former employer has a right to enforce an employment contract, so you can't sue them just for doing that. On the other hand, if they are motivated not by a need to protect their legitimate business interests but instead by malice or spite, or if the way in which they have gone about this violates some other rule or law, it is possible that you would have what is called a "counterclaim," which is a claim against your former employer. We also sometimes find that there are independent employment law claims at play which can also be raised in the same proceeding. All of these are part of our initial review and assessment of your case.

How Much Will Defending the Non Compete Suit Cost?

Perhaps as scary as being sued in the first place is realizing that you have a new and unexpected expense in the form of legal fees. We can't make that go away, but will do everything we can to make it manageable for you. This includes offering the initial analysis and assessment at a flat rate, so that you know what to expect, and can make an informed decision about whether to fight the claim or try to resolve it, before you have spent a lot of money. 

If you choose to fight the claim, we can provide estimates for each stage of the work, and for each stage we give you the choice of being billed by the hour or paying a flat fee. This does not make the process free, but at least gives you some predictability. We may also be able to offer you a payment plan for legal fees, depending on the circumstances. 

This Claim is Frivolous- Can I Make Them Pay My Attorneys Fees?

If your non compete agreement has a provision that says the winning party in a lawsuit is entitled to attorneys' fees, then yes. Otherwise, unfortunately, the "American Rule" in civil litigation is that each party is responsible for their own fees no matter who wins. But part of our review of your defenses in a non compete lawsuit is a review of claims you may have against your former employer. If you have any claims that arise under statutes that provide for attorneys' fees (for example, wage and hour or discrimination and retaliation claims), there may be a way to recover at least some of the fees at the end if you are successful.

How Our Non Compete Lawyers Can Help

We have years of experience representing individuals in non compete disputes in Massachusetts state and federal courts. Our non compete lawyers will assess your employment agreement and all of your available defenses, explore whether you have potential claims against your employer, and work with you to identify the desired outcome and the best way to get there.

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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