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To Be Valid, a Non-Compete Agreement Generally Needs These Three Elements

Non-competition agreements require the following three elements to be considered valid:

It must be supported by some form of consideration when it is signed. In exchange for signing the agreement, an employee must get something of value in return. If an employee signs the agreement prior to actually becoming employed, then actually becoming an employee will be considered sufficient in return for the employee promises not to compete. However, if the employee signs the non-compete agreement after beginning employment, then something else of value must be offered in exchange for the promise. This may be in the form of a promotion, more compensation, or another type of benefit that was not offered as an original part of employment.

It protects a legitimate business interest of the employer. An employer can use a non-compete agreement to protect confidential information. For this to be valid, the employer must be able to show that they took reasonable steps to keep the information protected and that this information gives the business some sort of competitive edge.

The agreement must be reasonable in terms of scope, geography, and time. Courts must weigh whether or not a non-compete agreement is reasonable in its duration and scope in cases where legal action is initiated. They must balance the need to protect an employer’s confidential information with the burden it would place on an employee.

Courts do have the discretion to narrow the scope of an agreement if they find it to be overly broad or refuse to enforce it entirely if they find it was clearly intended to prevent legitimate business competition by a former employee.

Consult an Attorney If you Have Non-Compete Agreement Questions

Some employers can be quick to file suit if they believe an employee or ex-employee has divulged information that is a part of the non-compete agreement in Boston. This can lead to a sticky legal situation and cost an employee in many ways. It is best to consult an experienced employment law attorney to make sure you are clear what your rights are in this type of situation.

Davis & Davis, P.C. serves clients in Boston and other surrounding Massachusetts communities.

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