Whether you’re an employer or an employee in Massachusetts, you may be a party to a “non-compete” or non-competition agreement. If so, you’ve likely wondered whether the agreement is actually enforceable. Unfortunately, the answer is not always easy. Over the years the Massachusetts legislature has considered establishing clear statutory guidelines, but has not done so yet. Instead, employers and employees must look to court decisions for guidance.
A recent Massachusetts Superior Court decision should serve as a reminder that in many cases, non-competition agreements are not likely to be enforced by a court. In Elizabeth Grady Face First, Inc. v. Garabedian, No. 16799D (Mass. Super. Mar. 25, 2016), a company operating a skin-care salon brought a lawsuit against three former employees seeking a court order enforcing their non-competition agreement. The agreement would have prevented the employees from working as aestheticians or massage therapists within a 25-mile radius of the company’s salon during a period of one year.
The Superior Court denied the company’s request for an injunction enforcing the non-competition agreement. The court ruled that the non-competition agreement was probably not enforceable because it did not protect a “legitimate business interest.” Massachusetts courts have explained that a non-competition agreement designed only to protect against “ordinary competition” do not protect a legitimate business interest. To be enforceable, a non-competition agreement needs to serve the purpose of protecting a business from the loss of assets such as confidential information, real trade secrets, or customer good will. In this particular case, the court found that there was no evidence of any confidential information or trade secrets and that any customer good will likely belonged to the individual salon employees rather than to the company.
If you need a Worcester, Massachusetts based business or employment lawyer for a situation involving the enforcement of a non-competition agreement, Murphy & Rudolf, LLP will fight for you and your rights. The firm of Murphy & Rudolf LLP represents businesses and employees in contractual disputes. If you are in need of a Worcester business or employment lawyer, please contact the law firm of Murphy & Rudolf LLP today.