Are you stuck under a noncompete?

Do you remember the first day of your current job? Maybe not - other than the series of documents that were force fed you at an orientation by someone in the HR department. Just a bunch of formalities, right? Again, maybe not. In this world of click-through agreements, how many times have you clicked "accept" on terms that you never even looked at, or signed a "standard" agreement without even reading the terms?  Everyone is happy at the beginning of an employment, but a little diligence can protect you down the road. Many employees are required by their employers to sign what are known as "noncompetes". They are actually Non-competition Agreements, but may also be referred to as NDAs (sort of a misnomer since the non-disclosure aspect is often linked with this concept, though broader in scope).  While the specifics will vary to a certain degree, the basic premise is similar: once you sign up to work for this company, you may be prevented from choosing your next one.

A non-compete generally says that when you leave your current employment, regardless of whether you quit or are fired, you are not allowed to work for a competing company for a certain period of time in a defined geographic area. That time can be 12 months to five years or some other period that varies, sometimes by industry, and the geographic area can be a certain radius around the company, an entire state, or even the entire United States!

For example, say you work for a retail store that sells women's clothing. After working there for five years, you decide you want to go develop your own women's clothing line and start your own business. If you signed a broad non-compete, you may not be able to do it for a year or more, regardless of whether you think your line will compete or not.

While Massachusetts enforces noncompetes generally, not all state non-competition laws are the same. California, for example, only allows noncompetes in connection with the sale of a business. So are Massachusetts employees at a competitive disadvantage? Not necessarily, but it pays to know what you are signing when you start a new job.

For more information about the effects of noncompetes and the potentially shifting view of them in Massachusetts, you should read Scott Kirsner's recent article in The Boston Globe, and, of course, the next document that your employer asks you to sign.