Question about non-compete in Massachusetts

Factual Questions
1

Hi -

I’ll try and make this as quick as possible - but basically I’m looking to see how enforceable a non-compete clause in an employee agreement is in Massachusetts. I’ve tried doing some research, and have found that enforceability is spotty in MA - so I figured I’d give the SDMB a shot.

Anyway, the exact wording of the non-compete clause is:

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As an essential inducement to the Company, you covenant and agree that during your employment and for a period of twelve (12) months from the termination of your employment or the date of your last severance payment, if any is made, you will not work for a competing professional services firm, consulting firm, value added reseller, storage integrator, or storage and backup service vendor, or directly or indirectly, either individually or in partnership or jointly in conjunction with any person as principal, agent, consultant, or shareholder, or in any manner whatsoever, provide, market, or perform services, or sell, distribute, market, or license software or hardware, functionally similar to the services, goods, and software being marketed and distributed by the Company during the term of your employment, to any Customer or Prospect of the Company. “Customer” includes any company that purchased the Company’s goods or services, directly or indirectly, during the twelve (12) months before your employment terminates, and “Prospect” includes any company qualified as an opportunity in Company records at the time your employment terminates. Further, during your employment and for a period of eighteen (18) months from the termination of your employment or the date of your last severance payment, if any is made, you will not work for XXXXX or YYYYY in any capacity. If any restriction of this section is found by any court of competent jurisdiction to be unenforceable becaeuse it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it shall be interpreted to extend only over the maximum period of time, range of activities or geographic area as to which is may be enforceable.

XXXXX and YYYYY are the names of specific companies we have partnerships with. The non-compete clause specifies those companies, but I opted to keep those companies anonymous in this posting.

I know the answer is probably ‘go see a lawyer’, but I am curious if anyone knowledgeable in Massachusetts law has anything to say about it - is it mostly a scare tactic, or by signing am I pretty much forfeiting my right to work in my field of expertise if I decide to leave the company (I have no intentions to right now or in the foreseeable future, but I like to think ahead about these things)? Thanks!

2

Get a lawyer. No one on the SDMB is qualified to answer a specific legal question because we don’t have access to all applicable facts that might influence our advice. Furthermore, if you are willing to base your financial future on the words of someone on a message board – whose name you don’t know and whose credentials you cannot verify – then you’re a dope.

–Cliffy

3

Ok, I guess a clarification is in order because Cliffy assumes I’m an idiot - I plan to verify any information given by any member, but I am hoping on the slim chance that someone knows an MGL reference that I can crosscheck.

4

That’s one of the more reasonable ones I’ve seen.

Its short in duration and they have substituted specific customers and prospects for a geographic scope. However, the scope of prohibited activities is very broad - you can’t work for a competitor ‘in any capacity’, even sweeping the floors - and this would be problematic in my state. But my state is probably one of teh toughest to get these enforced because of our state constitution. They also might have a problem if you are a member of certain professions, such as law (on the theory that a client must have an unfetter ability to choose legal counsel) or a physician and your services are essential - e.g. shortage of doctors. I don’t know anything about your state, but I would expect this would get enforced in most states. However, this is an area where you really need an expert.

Call the State Bar Association and ask for a referral to a local lawyer experienced in employment law. IF you find someone with sufficient experience, it probably wouldn’t be very difficult (read: expensive) to get a very specific answer.

5

IANALawyer, but it seems to me that the first sentence of the employment agreement merely says that you can’t work for a competing company that shares actual or prospective customers with your current employer. Once all the synonyms are taken out, this is what you get:

You agree that for a period of twelve months from the termination of your employment you will not work for a competing professional services firm as consultant or perform services similar to the services being marketed and distributed by the Company during the term of your employment to any Customer or Prospect of the Company.

6
  1. Why didn’t you say so in the first place?
  2. I stand by my post – this is just a waste of time for you and will almost certainly make you more confused and less willing to listen to your lawyer’s advice when/if you finally go see one. Anyone who knows enough law to give you credible advice on this topic knows enough law not to give advice on a message board.

–Cliffy

7

IANAL, however, even though companies can make you sign a non-compete agreement, it is my understanding that a non-compete is very, very difficult to enforce. I believe it is covered under Federal Labor laws that no company can stop you from earning a living, even if it happens to interfere with a non-compete that you have signed. I don’t have a site for that, just somewhat personal experience.

8

Um, Cliffy, don’t most people post here looking for advice? We can’t really verify anybody’s credentials, but people often just need a point from which to start gathering information. The OP did specify that he expected the answer to be to go see a lawyer, but many people don’t know what kind of specialty to look for.

9

Amen, Cliffy.

Asking for legal advice in a public forum is generally not against the law, but it is usually very foolish, and can lead to unexpected and unfortunate consequences – both for the ones asking and for the ones answering. The SDMB does not go far enough in discouraging it, IMO. When you have a legal problem, especially if you are getting sued or may get sued (which is well within the realm of possibility for volating a non-compete clause), the wisest course is seeking prompt and confidential advice from a qualified lawyer who practices in your jurisdiction. The lawyer will know the law, can render competent advice, and can do so under the protection of the attorney-client privilege.

Asking a general or hypothetical question about the law is fine, and seldom dangerous. But asking for particular advice about specific facts can be very dangerous. It can be dangerous for the member asking the question because, if the case does get litigated, the opposing party’s attorney will usually ask whom else (other than his or her attorney) the member has discussed the case with. The member must then disclose the SDMB thread, in which case a good opposing attorney can have a field day. Whatever the member said may reveal knowledge or strategy that the opposing attorney can use against the member in litigation – and no matter how harmless the comments may seem on the boards, a good attorney will use them in litigation in whatever way helps his or her client’s case. The member will presumably have read the thread that he or she started, and will thus be burdened with notice of every wild-ass guess or theory posted in the thread, so that the opposing attorney can inquire into why the member did or did not act in accordance with the suggestion once it was posted. If some answering post suggests the legally correct course, and the asking member did not immediately adopt it, then a court can easily infer that the member was acting with reckless or willful disregard for the law from that point forward. Even if the information posted on the board was not inherently harmful, the mere act of posting it in a public forum probably waives any claim of confidentiality that the member may otherwise have enjoyed, and may even void the attorney-client privilege with respect to any subject in the litigation that was the subject of the public disclosure. The opposing attorney can then invade even otherwise privileged conversations between the member and his or her attorney.

Answering a question asking for particular legal advice about a specific case can also be dangerous. If the member answering the question ventures a guess about the law, but is not a lawyer, then he or she may be practicing law without a license – a crime in most jurisdictions. And while prosecutors and bar associations are probably not scouring the SDMB looking for potential defendants, a disgruntled opponent who learns about the thread can wreak havoc for the SDMB and for the Chicago Reader, Inc., by simply bringing it to the attention of a prosecutor – because even if no prosecution results, an investigation will. I am surprised that it hasn’t happened yet (assuming that it hasn’t).

If the member answering the question is a lawyer, but is not licensed in the member’s jurisdiction, then he or she may still be practicing law without a license – in which case a prosecution is much more likely if the opposing party instigates a complaint, since a lawyer ought to know better. And if the lawyer is properly licensed in the member’s jurisdiction, then simply answering the question may establish an attorney-client relationship – hence the disclaimers that so many lawyers post in their answers that “I am not your lawyer and you are not my client” as a result of posting an answer. Whether such a disclaimer is effective is debatable: some jurisdictions are extremely liberal about finding an attorney-client relationship from even casual communication between an attorney and someone seeking legal advice. And if an attorney-client relationship is established, then rendering legal advice in a public forum – thereby waiving the attorney-client privilege – is almost certainly malpractice.

There is a significant downside risk for everyone who asks or answers a question asking for legal advice about an identifiable case.

10

brianmelendez -

Thanks so much for your input! I didn’t realize the gravity of asking a legal type question on a message board until I read your explanation of it!

I’m still a little confused though, and I was hoping you could clarify things a bit futher - since it’s obvious you have a lot of knowledge in this subject. When you say that I could be asked who else I discussed this matter with, does a message board really legally qualify as a reference? Have there been cases where a message board posting has significantly altered the outcome of a legal case?
I’m also unclear on something else - you point out that the opposing lawyer might presume the poster has read the entire thread (and therefore be swayed by all the random and wild comments users make), but how could there be any proof that the poster had read anything beyond the timestamp of their latest post? I agree with you, that it would be ‘assumed’, but it doesn’t seem to me that a lawyer can base a case on the assumption that everything in the thread is in the mind of the poster. Does the law have a history of supporting the idea that whatever is in a thread is known by the poster?

Also, could it be possible that no investigation of the SDMB has been done because either 1) if it was ever mentioned, it was thrown out as a source simply because of the type of information exchange it is or 2) there is a disclaimer on the SDMB (and if so, how much liability does that relieve the SDMB of?)

And finally - if a user posts a response and is not a lawyer, you (probably correctly) point out that the person could be considered as practicing law without a license. Does this extend to someone pointing out a reference if they know where the actual text of the law can be found? Furthermore, does my own investigation and looking up of laws mean that I’m committing a crime, because only a lawyer can perform such acts?

As I read your response, it was very obvious that you are much more knowledgeable in this matter than I, so I figured I’d ask for clarification on the questions that came to mind. Afterall - as you would probably agree - it never hurts for a person to be well informed!

11

I have never heard of a case where a message-board posting affected the outcome or where a court decided whether “a message board really legally qualif[ies] as a reference.” But keep in mind that the only reported cases are the ones that reach the appellate level. If an attorney questioning a witness at a deposition asks, “Whom else have you discussed the facts of this case with?,” it is clear to me that a message-board thread is a discussion that must be disclosed in answer to that question. What a litigant says to a nonparty, any nonparty, in any form – spoken, written, or electronic – is information that his or her opponent is entitled to discover. Whether “a message board really legally qualif[ies] as a reference” would have arisen in an appellate decision only if a party fought that issue all the way to an appellate court, and I just can’t see any attorney pursuing that argument with a straight face, or any litigant paying for an appeal on the issue. I can see a court sanctioning, or a jury disbelieving, any witness who withheld information about an online conversation on the theory that it wasn’t really a conversation.

Again, there is no well-developed body of “message-board law” out there – and the law consists not only of reported appellate decisions, which are well documented and easily accessible, but also of what judges and juries in fact do, which depends on experience and is not as easily researched or cited. A judge or jury would decide whether a message-board poster reads his or her own thread in the same way that any factfinder gets to the bottom of a doubtful question: by looking at the available evidence and applying their own experience and common sense.

The simplest way of finding out how far into the thread you read, beyond your latest posting, is by asking you. And if you say that you stopped reading after your latest posting, then the opposing attorney can impeach your testimony by showing, for example, that your usual practice was reading each thread that you started all the way to the end, or that you received an electronic mail each time a new post appeared in the thread, and letting the factfinder draw the warranted inference.

It is possible that a prosecutor may have spotted this issue before and just decided that a bunch of anonymous characters gabbling about legal issues on a message board wasn’t worth going after. But as I said, the risk is not so much that a prosecutor will independently crack down on a message board as it is that a disgruntled opponent will call the issue to a prosecutor’s attention, which will almost certainly trigger an investigation even if no prosecution results.

I’m not sure what “disclaimer on the SDMB” you are referring to. I imagine that the board itself is at less risk than the individual posters. When I wrote that “the thread can wreak havoc for the SDMB and for the Chicago Reader, Inc.,” I meant that they would get dragged into an investigation about the members involved, not necessarily that they would themselves be targets. But I am confident that nobody can avoid the consequences of illegal activity by disclaiming liability for it. The law is what it is, and it applies to a private party’s conduct regardless of the party’s self-serving characterization of that conduct. For example, if a message board posted a disclaimer saying that a poster was not liable for a false and defamatory statements posted on the board, that disclaimer would not affect a poster’s liability to a third party who was defamed by such a statement.

What constitutes the “practice of law” is rather poorly defined (I looked up the law both in your state, Massachusetts, and mine, Minnesota, and can’t find a satisfyingly clear and concise definition in either one), but I am confident that neither example – “someone pointing out a reference if they know where the actual text of the law can be found,” or “my own investigation and looking up of laws” – come anywhere near the “unauthorized practice of law.” Since “ignorance of the law is no excuse,” everyone is presumed to know what the law requires, so pointing out or looking up a statute’s text or a court’s reported decision can’t be activities that lawyers have a monopoly on. The kind of activity that may amount to the unauthorized practice of law is where someone offers legal advice to someone else.

12

Sorry, I just realized an important exception to what I wrote: a litigant need not disclose what he or she says to a nonparty if the communication is privileged or otherwise protected from disclosure. The law recognizes several such privileges, such as the clergy-penitent privilege, doctor-patient privilege, marital privilege, and attorney-client privilege, just to name a few. But no such privilege would apply to a message-board posting, especially since such a communication is not occuring in confidence.