Chicago Business Litigation Lawyer Blog
When entering into the employment domain, covenants are imposed on employees restricting what they can and cannot do once they leave the job. Violations and restrictions are what employers often look for when they wish to seek enforceability of a contract that was entered into when employees decide to move elsewhere. Typically, such agreements prohibit competing with an former employer for a certain period after the employee has left the business, or prevents the ex-employee from soliciting or dealing with customers of the business by using knowledge of those customers gained.
Non compete clauses are in often in place for businesses to protect their investments in business and to not have employees turn around and share information that may be valuable in another employment setting. That is why the wording of non compete agreements is important. However, more and more businesses are now laying off employees.
It could be speculated that since more and more businesses are now laying off employees, that this is one of the reasons as to why Massachusetts legislature passed a bill that would require companies in the state to give employees some kind of compensation for up to a year after leaving if they decide to enforce a non-compete agreement. Another reason is that workers could also end up for months without a paycheck from either a previous employer and by not being able to work for a competitor. At least now, there is some form of relief and compensation until enforceability of the non-compete agreement is made.
When it comes to Massachusetts, the clause known as a “garden leave clause” provides pay for of at least 50% of the employee’s highest base salary over the prior two years, or other mutually-agreed upon consideration. Though the law does give some room for “other mutually-agreed upon consideration” leaving some level of flexibility.
As it stands, Massachusetts has become one of the first states to offer this kind of relief for employees. This change may encourage others states to enact reforms. Another change of note is allowing employees to review the agreements prior to signature and relieving laid off employees from the non-compete’s restrictions.
An agreement can be deemed null and void or certain provisions within can be. This is pretty much the same as it was before. It’s impact and affect is yet to be tested.