As useful as the noncompete agreement is for businesses, it’s an instrument that is often tricky to draft and difficult to enforce. This is due to a variety of factors, including how widely noncompete laws vary from state to state and how well tailored the contract is so that it provides effective protection for the employer without being overly restrictive to the employee. Some states allow wide latitude in noncompetes, while others only allow them for narrowly tailored purposes. Still others, California in particular, ban the noncompete agreement entirely.
More so than with perhaps any other area of business law, the jurisdiction you’re in matters. Whether you’re an employer or an employee, it’s important to know the basics of the law before you consider signing–or asking someone to sign–a noncompete agreement. If you don’t have access to legal research tools, however, it can be difficult to know where to begin in understanding the law in your area.
Luckily, our fellow Boston lawyers over at Beck Reed Riden have prepared a handy cheatsheet that gives an overview of noncompete laws in all 50 states. Up to date as of March 2016, this chart (in PDF format), gives you vital information for each state, including whether noncompetes are permitted, what interest can be protected, standards and exemptions, necessary consideration, and more.
Massachusetts, for example, is a fairly restrictive state, allowing noncompetes for the relatively narrow purposes of protecting trade secrets, confidential information, and goodwill:
(Lawyers, too, are exempt from noncompete agreements, by the way. In fact, signing one is an ethical violation for an attorney.)
Thanks to Beck Reed Riden for this incredibly useful tool.
BeaconLegal provides noncompete agreement drafting and review for both employers and employees. If you’ve got an agreement you need reviewed, give us a call today at (617) 532-0910.