Legal Question in Employment Law in Massachusetts

Non Compete clause in release letter from termination of employment

I am currently part of the Senior Mangement team of a Company, I have a contract that was given to me when I was promoted SVP that indicates that I am entitled to 12 months of salary if I am laid off without cause and 24 months in case of change in control of the Company. Nothing in this initial contract talks about restriction to work (non compete clause) for any other Company should it be triggered. The Company decided to cease Operation while there were negociating a Sale of the Company itself.

In the severance letter they gave me, they only proposed 12 months instead of the 24 months, also I believe that even if the sale did not close yet there were in the process of closing it and should have given 24 months but furthermore they added a clause prohibiting me to work for 12 months for a Company that was created by the same shareholders.

My question is: Do they have the right to impose these restrictions even if they were not part of my initial contract (meaning, take the package or go work for these people but if you do you will not get your package) and should have not been obligated to offer 24 months instead of the 12 months?


Asked on 9/25/07, 3:33 pm

2 Answers from Attorneys
David Conforto Conforto Law Group

Re: Non Compete clause in release letter from termination of employment

Thank you for your inquiry.

To give you some background about ourselves, Conforto Law Group is a boutique Boston law firm specializing in employment law. On behalf of executives and senior-level employees, we negotiate severance packages and the terms of discharge. This process includes enforcing commission agreements, overcoming non-compete issues, interpreting stock option plans, and ensuring that your interests are protected during takeovers, closures, or mergers.

Regarding your question, from what you've described, the original contract appears to be silent on the issue of what length of severance should be paid in the event of a company closure. As a result, there is an open question as to whether the company is obligated to pay a full 24 mos. severance in this scenario.

Overall, under the original contract, you appear to have a right to at least 12 months severance since you are presumably being discharged without cause. Take the company's requirement that you now sign a non-compete in exchange for severance very seriously. Have an attorney who concentrates in employment law review your documents and provide a detailed analysis.

Please feel free to contact us directly by phone or e-mail should you wish to explore working with us.

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Answered on 9/25/07, 4:23 pm
Craig J. Tiedemann Kajko, Weisman & Colasanti, LLP

Re: Non Compete clause in release letter from termination of employment

In my judgment, a firm answer to your question requires and depends upon analysis of the specific language in the contract as against the language in the severence offer, and whether or not other documents and/or extraneous facts/circumstances are relevant to those contractual provisions. Then, for good measure, assessed within the context of potentially relevant employee handbook provisions, employment/termination policies, verbal promises, etc., that might also bear upon the answer.

Having said that, my instinct immediately suggests that your issue is worth further exploration. Feel free to contact me for a free initial consultation.

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Answered on 9/25/07, 4:45 pm


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