Like all relationships, an employer/employee relationship can be great in the beginning – or for a very long time – but at some point there is a possibility that the bloom will be off the rose and both parties will be seeking changes in the workplace or in personnel. You should be aware of any legal restrictions or parameters that might come into play when things change. That’s why we all need to read contracts carefully upon taking any new job, and be thoughtful about negotiating before signing them.
We’ve compiled a list of FAQs about the Non-Compete Agreement (NCA) to help you make informed decisions about signing one if you’re an employee as well as if you’re initiating one as an employer.
Q: What is a Non-Compete Agreement (NCA)?
A: It’s a legal contract, most often given to a new employee to sign upon hiring. This type of document generally states that the employee can’t go to work for a competitor, or start their own competitive business within a certain geographic radius and time frame once they leave the company.
Q: What do these agreements protect?
A: For the most part, they protect the employer’s ideas, marketing plan, computer programs, customer base, unique skill sets, and other proprietary assets from getting into a competitor’s hands.
Q: Who receives NCAs and when?
A: With some companies, NCAs are given only to upper management due to how much insider information they might have. Other companies give them to all of their employees, feeling that the risk is there regardless of someone’s position or title. Employees are often asked to sign upon being hired. But they can also be presented to an employee along with a promotion, or when they’re let go from the company.
Q: Do I have to sign one?
A: If you’re asked to sign one and you refuse, that obviously would be a huge red flag to your new employer. If you refuse to sign when you’re leaving the company, there is a chance that it could go to court, but there are ways to prevent that from happening. Don’t be discouraged if the NCA has some things in it that you’re uncomfortable with. You can always try to negotiate and make it more specific to your particular situation.
Q: Are NCAs protected under the law?
A: Non-Compete Agreements are governed by State law, not by Federal law. Some states have outright banned them. In October, 2018, Massachusetts signed a new law that regulates these types of agreements, including banning them from certain industries such as nursing. Check out Mass.gov for more specific information.
Q: What should I pay attention to when reviewing one?
A: When reviewing the NCA be sure to consider the length of time before you’re allowed to do your specific type of work again with a similar company, and look for the geographic range and specific companies considered to be competition. If you’re feeling that these restrictions could prohibit you from making a living, or that you’d have to relocate in order to do so, it would be a good idea think about getting legal assistance so you can negotiate a more compatible agreement.
Q: Do I need to have an attorney look it over?
A: It’s not imperative, but it wouldn’t hurt. As mentioned above, an attorney can help customize the NCA so that it’s not a burden as you move forward with your career. Ask your employer if you can take the papers home before signing so you can run them by an expert. When receiving an NCA upon hiring or during a promotion, an attorney might negotiate by asking for something in return, such as opportunities for promotions or extra vacation time. If you’ve been terminated and are expecting severance or seeking employment elsewhere, it could help you to consult an attorney before signing anything.
If you need clarification on other work related terminology, programs, etc., contact us. We’re here to help. Please understand we can only provide general information; you would need to see an attorney for any legal advice. MassHire Cape & Islands Career Center 508-771-JOBS (5627)
