Limitations on Non-Compete Clauses in a Severance Agreement

Sad young woman carrying box full of personal stuff while leaving office after retrenchment in coronavirus crisis. severance agreements concept.

After an employee leaves a place of employment or is terminated, the employer may have that employee sign a non-compete clause as part of a severance agreement with the company. With the recent changes to the noncompete law in Massachusetts, it is important to have a knowledgeable attorney to advise you. The experienced employment law attorneys at The Maura Greene Law Group in Boston have represented many employees subject to non-compete clauses and can advise you on all aspects of a severance agreement with your employer. For more information, call or contact our office today to schedule a consultation.

What is a Non-Compete Clause?

A non-compete clause, otherwise known in its full form as a non-competition clause, is a provision that bars the employee from competing with his or her employer for a specific period of time and within a specific geographic area. In Massachusetts, non-compete clauses in general cannot exceed a period of one year except under certain circumstances. In terms of geographic scope, the non-compete clause generally can apply only to the areas where the employee provided services or had a material presence or influence within the last two years of employment. A non-compete clause is also limited specifically to the types of services provided by the employee during the last two years of his or her employment.

It is important to note that on October 1, 2018, Massachusetts passed the Massachusetts Noncompetition Agreement Act that sets limitations and provisions to many non-compete clauses. However, this law does not apply to non-compete clauses included as part of a severance agreement. An experienced attorney will know how the law differs between non-compete clauses offered before or during employment and those included in a severance package, which is why you should always use a knowledgeable attorney when negotiating this type of agreement.

Applicability to Certain Professions

There are some professions where non-compete clauses are common in severance agreements. If the sale of a business includes the termination of the previous owner, they will likely have a non-compete clause in their severance package. Technology companies, biotechnology companies, retail businesses, start-up businesses, and other businesses with highly valuable intellectual property and trade secrets also typically include non-compete clauses in their severance agreements, as do most contracts for higher level executives and other C-suite leaders at companies of all types.

However, there are also some professions that do not allow non-compete clauses in severance agreements as a matter of public policy. These industries include the following:

  • Physicians
  • Nurses
  • Psychologists
  • Social workers
  • Lawyers
  • Broadcasters

Talk to Our Office Now About Your Severance Agreement  

For more information about the validity of a non-compete clause in your severance agreement and its potential to restrict your future employment options, call or contact The Maura Greene Law Group today to schedule a consultation. 


The Not So Fine Print:

We see patterns in our practice, like the ones described above.  However, every case has its own unique facts. The materials available on this web site are for informational purposes only and not for the purpose of providing legal advice. Before you take any action, you should contact an employment attorney to obtain advice on your own situation. We can’t provide legal advice here and this isn’t intended as legal advice. Use of and access to this Web site do not create an attorney-client relationship between the law firm and the user or browser.