Non-Competition Agreements: What Every Employer Needs to Know

Employers have a lot of responsibility when it comes to drafting legal contracts. Make sure you know exactly what your employee non-compete agreement needs to clarify.

When it comes to drafting employee contracts, businesses have a lot to deal with. Not only do they have to make sure that documents are worded clearly and concisely, but each company also needs to make sure that its employee contracts and clauses follow the law clearly. A new Massachusetts state law law took effect on October 1st, 2018, which means it's even more important that companies evaluate their current and future contracts to make sure they are following the state policies appropriately. If you're in the process of drafting a new contract for your employees or you want to make sure that your current non-competition agreement is legally binding, there are a few things you need to know.

First off, understand that the agreement must be written. Verbal agreements are not good enough when it comes to non-compete laws. While you may bring up the idea of your company's non-competition agreement when you interview potential employees, actual documentation is key. Make sure that both you and your employees each sign the agreement you have. There are many reasons that written documentation is important, but one of the simplest reasons is that it protects both you and the employee in the eyes of the law. Should you need to go to court for any reason, having this document available is imperative.

It's important to realize that non-competition agreements don't last forever. Your non-competition agreement needs to have an end date on it. You cannot have an employee sign an agreement that simply says the contract is never-ending. This is not only unreasonable, but also illegal. In Massachusetts, the end date may be up to one year after the employee's time at your office is over. For example, if an employee's employment is terminated on March 15th, the contract may last one year past that date.

Make sure that the agreement is available to new employees. In fact, according to state laws, you need to provide this at least 10 business days before each potential employee begins working for your company. Not only does this give your employee time to review the document, but it allows them to meet with their own legal counsel to review the agreement if they need to. Your contract needs to state that employees are free to have outside counsel review the document prior to them signing it.

Whether this is your first time drafting a non-compete agreement or you simply want to make sure your company's contract is legally binding, it's important to have your document reviewed by an attorney prior to being given out. A commercial business attorney will be able to review your document and let you know exactly which areas are clear and which portions of the document may need to be amended. Reach out as soon as possible to get the assistance you need when it comes to creating a fantastic document for your employees.