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Non-competition Agreements - What Are Employers Really Getting with These Documents?

March 19, 2021
employee sign a non-competition agreement

Everyone is aware of the honeymoon phase of the employment relationship — that time period when the employee begins work and both parties are filled with high expectations for the relationship.


Possibly, prior to beginning the relationship, an employer has the employee sign a non-competition agreement as a sort of prenuptial agreement, hoping to never have to use it. However, fast-forward a few years, the employment relationship goes sour, and the employee leaves the company. Not only does the employee leave the company, but they also begin soliciting clients, or maybe even fellow employees, to join them at their new place of employment.


As employers are aware, Massachusetts enacted the Noncompetition Agreement Act in 2018. Prior to the act, there was little restriction on the contents of a non-competition agreement other than what terms would be enforced by a court in the event of a dispute. That changed with the provisions of the act. Now, in the scenario above, if the employer sought to enforce the non-competition agreement, it would need to pay the former employee not to work during the competition period.

This is because the act mandates that, to be enforceable, a non-competition agreement must contain a ‘garden-leave clause,’ defined as 50% of the employee’s highest annualized salary within the two years preceding termination.


“While the Noncompetition Agreement Act requires employers to pay former employees not to work, there may be other options available to employers.”


Employers therefore must answer the question: what do I really want with a non-competition agreement? Is it to stop the former employee from working? Or is the goal to maintain the status of my business? If the goal is to maintain the status of the business, employers may be able to utilize non-solicitation and non-disclosure agreements, which can protect the former employer’s interests while also allowing the former employee to work.


Both such agreements are excluded from the definition of ‘non-competition agreement’ by the act, meaning they do not need to include garden-leave clauses.


A non-solicitation agreement does not prohibit a former employee from working for a competitor when the employment relationship ends. Instead, it serves to prohibit the former employee from soliciting clients and other employees of the former employer to join them at their new place of employment. A non-solicitation agreement can therefore be an effective tool in preserving the current status of the business by prohibiting a former employee from taking clients and other employees with them to their new place of employment.


A non-disclosure agreement also does not prohibit a former employee from working for a competitor when the employment relationship ends. Nor does it prohibit the former employee from soliciting clients and other employees from joining them at their new place of employment. Instead, it serves to prohibit the former employee from disclosing any confidential information from the former employer. The confidential information protected could be a trade secret or other highly sensitive material.


In short, while the Noncompetition Agreement Act requires employers to pay former employees not to work, there may be other options available to employers. It is therefore wise to consult with employment counsel to review your potential options to protect your business interests after the employment relationship has ended.


Timothy M. Netkovick, Esq. is a litigation attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council; (413) 586-2288; tnetkovick@theroyallawfirm.com


This article was published in BusinessWest! Click here to visit their website.

April 2, 2025
A recent court decision in Pennsylvania offers clarification that employers cannot take adverse action for marijuana use against individuals who possess medical marijuana cards, at least under Pennsylvania’s Medical Marijuana Act. In this decision, an individual received a conditional job offer for a non-safety sensitive position, contingent on a drug test. The individual disclosed his state-certified use of medical marijuana to treat anxiety, depression and ADHD, assuring the employer that it wouldn’t affect job performance or safety. After a positive test for marijuana, the employer rescinded the offer, citing safety concerns. The individual sued the employer under the Pennsylvania Medical Marijuana Act (“MMA”) and disability discrimination under the Pennsylvania Human Relations Act (“PHRA”). The Court allowed the individual’s claim under the MMA to proceed, potentially creating substantial precedent for tolerance of individual medical marijuana use in non-safety sensitive positions. The Court specifically noted that MMA protects individuals not just from discrimination based on card holder status, but also for adverse actions based solely on lawful medical marijuana use. The Court otherwise dismissed the individual’s claims under the PHRA because the PHRA does not require employers to accommodate medical marijuana use, even if it is prescribed for a legitimate medical condition. While a Pennsylvania decision, this decision potentially has rippling implications that will affect Massachusetts employers and employers in states where medical marijuana use is allowed under state law, which is allowed in some manner in 44 states. Employer Takeaways 1. Understand State-Specific Protections : Laws regarding medical marijuana use differ widely across states. In some areas, cardholder status is protected, while in others, it is not. Employers operating in multiple states must ensure their hiring and accommodation practices comply with the relevant laws in each state. 2. Base Safety Concerns on Job-Specific Evidence : General or speculative safety concerns are insufficient, particularly in states with strict employee protections. Safety risks cited should be specific, evidence-based, and directly related to the essential functions of the job. 3. Review Drug Testing and Accommodation Policies: Update your policies to reflect current state laws and clarify how your organization manages disclosures of medical marijuana use, especially during the hiring process . If you have any queries regarding drug testing or other workplace accommodations following this ruling, it is prudent to contact legal counsel. If your business has any questions on this topic or any other matters, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288.
March 28, 2025
The Royal Law Firm was a Finalist for Best Law Firm in The Best of The Valley Readers' Poll for 2025, as published by the Valley Advocate! Thank you to everyone who voted for us, and to those of you who trust us to help you in times of need. Click here to check out all of the category winners and finalists.
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