Philip Gordon testifies in favor of new Massachusetts Noncompete Bill

Massachusetts is set to revamp its existing noncompete laws and pass new legislation favorable to employees, as well as companies seeking to grow in Massachusetts. Philip Gordon spoke in front of Senators and Representatives about the proposed legislation, and the bill eventually passed in the Massachusetts Senate by 32 votes to 7.

The proposed changes to noncompete laws in Massachusetts would ban those clauses for workers classified as nonexempt under the Fair Labor Standards Act (FLSA). Exempt employees – typically, professionals, administrators or executives – would continue to be subject to noncompete clauses, but with more predictable results.  Noncompetes now would last only for six months, and they would be valid only if limited to a predefined geographic region and specific employment duties. Thus, if an employee finds new employment after six months, in a different area, or with different responsibilities, they would be allowed to begin working immediately.

Other major changes include a requirement that advance notice of any noncompete be provided to individuals prior to employment, and that the clauses themselves be clear and specific.

Click here to view the latest version of Massachusetts Noncompete bill.

If you have any questions, please contact us.


Severance Agreements and Releases: A Breakdown

You never walk into your dream executive job thinking about an exit strategy. But there is a distinct possibility that you may be asked to leave your company for any number of reasons. Rather than being blindsided by this, you can agree to a severance package with your employment.

Why would a company agree to a severance arrangement? They can prevent expensive litigation between employers and terminated employees. The agreement itself is just a contract between an employer and employee waiving certain legal rights of the employee in exchange for additional compensation or other benefits provided by the employer. On one hand, for the employee, the positive side of severance benefits may include large one-time payments, continued health benefits, additional salary payments, letters of recommendation or other offers.

On the other hand, severance packages may also include critical non-compete and confidentiality agreements, as well as releases requiring the employee to give up any claims she may have forever. Before signing such an agreement, be knowledgeable of the effects those provisions may have on your future ability to obtain employment.

If you’ve been offered severance in exchange for a release, contact us today.


Non-Competition and Non-Disclosure Agreements

Many employers require their employees to sign non-compete and non-disclosure agreements as a condition of employment. There are a number of reasons for such agreements, although the primary stated reason is that companies want to protect their investment in you and their own information.

The crucial question for any employees is: if I sign a non-compete and non-disclosure agreement, can I work in the same field for a different company after my employment ends? No employee wants to limit their future career options.

A non-disclosure agreement protects trade secrets, intellectual property or any other special information obtained by an executive during his employment. While these agreements are almost always required, you should be careful not to sign one that would limit you from using publicly available information or knowledge you developed on your own. Even though the agreements may not be enforceable, it may take years to litigate the coverage.

A non-compete agreement may be enforceable if it is:

Necessary to protect an employer’s legitimate business interest;
Reasonably limited in geographic scope and duration;
Reasonably limited to the scope of occupation; and
Supported by consideration.

But, even in those situations, there may still be a way out.

Contact us if you have any questions or check out our FAQs page on executive compensation.