Massachusetts Governor Deval Patrick recently announced that he is proposing legislation to abolish non-compete agreements. This announcement re-ignited a debate in the Massachusetts community regarding non-compete agreements. In general, more established companies, particularly those in the technology arena, view non-competes as a favorable way of protecting intellectual property and maintaining a competitive edge by preventing former employees from unfairly competing and/or sharing business secrets. In contrast, start-up companies (and some venture capitalists) generally view non-competes as stifling innovation and job growth.
There are only a few states that have banned non-compete agreements in the union, California being one of them. Many point to California’s booming Silicon Valley to show the effectiveness of such unenforceability. With Massachusetts attempting to follow in California’s footsteps, the non-compete argument has heated up in Connecticut as well. Just last year, the Connecticut General Assembly passed a bill restricting the use of non compete agreements only to have it vetoed by Governor Malloy. When speaking on why he vetoed the bill the Governor had the following to say:
“The bill left certain key terms undefined or unclear.” “As a result” he added, “this bill has the potential to produce legal uncertainty and ambiguity in the event of a merger or acquisition. If signed into law, costly and time-consuming litigation would likely be required to provide necessary clarity.” So its back to the drawing board for Connecticut, but maybe they can take notes from how Massachusetts handles the issue later in the year.
What is a non-compete agreement?
By way of background, and in the rare event you have never encountered a non-compete agreement, a typical non-compete agreement involves a company requiring an employee to contractually agree that, if the employee should leave his or her employment with the company, the employee will not work for a competitor within a certain geographic range of the employer for a certain period of time. Non-compete agreements are commonly signed at the beginning of an employment relationship, as a condition of employment, but may be signed during the course of an employment relationship under appropriate circumstances.
Effect of Non-Competes on Employees
The most important thing to know about non-compete agreements is how they affect you in the event of your termination or resignation from your current employer. All too often, these agreements are signed, yet misunderstood by the employee. A non-compete can change your circumstances more than you think; the agreements limit where you can work, when you can work, and who you can work for. For many individuals, a non-compete may restrict their entire job pool and leave them with little to no opportunities close to home. For these reasons, it is essential to speak with an experienced employment law attorney before you sign a non compete agreement as a condition of employment.
The attorneys of Maya Murphy, P.C. have been practicing employment law for more than a decade in the tribunals of New York and Connecticut. If you have any questions regarding employment agreements, please do not hesitate to contact Joseph Maya and the other experienced attorneys at 203-221-3100 or JMaya@Mayalaw.com to schedule a free initial consultation.