WHAT EMPLOYEES SHOULD KNOW
ABOUT MASSACHUSETTS EMPLOYMENT LAW
At-Will Employment
Most employment relationships are "at-will" which means that the employer and employee serve at the will of each other for an indefinite period of time. Either party may terminate the relationship for no reason whatsoever, usually without advance notice, although in certain circumstances notice may be required.
There are advantages and disadvantages for both parties. The employee is free to leave his employer at any time to accept a better job. The employer has the right to discharge an employee at any time, for any reason, or for no reason at all so long as the discharge is not discriminatory, against public policy, or in breach of any specific state ore federal law. Courts have been reluctant to abolish this relationship. The United States historically has endorsed an employee's right to work for whomever he chooses, and an employer's right to discharge employees in its sole discretion. At times application of this doctrine can seem cruel and economically harsh to a long-term employee, who is suddenly terminated without receiving any warnings whatsoever. The loss of a job is emotionally devastating, similar to losing a loved one. Not only is a job loss a financial hardship, it is also a severe blow to one's self-esteem.
While it is usually impossible for the terminated employee to avoid the vicissitudes of the at-will doctrine, attorney Wallace strives to help the fired or laid off employee make a bad situation better. Quite often at-will employees discharged without cause are offered severance packages in return for releasing the employer from any and all claims arising out of the employment relationship. Often attorney Wallace is able to negotiate a better severance package, depending on the quality of the terminated employee and financial strength of the employer.
If termination is due to a large-scale layoff (commonly known as a reduction in force, or RIF), we carefully scrutinize the circumstances of our client's termination. If the objective of a RIF is the reduction of costs, this is a legitimate and sound business decision. However, an employer may violate the laws prohibiting age discrimination where the aim of the reduction in force is simply to reduce labor costs by discharging higher paid employees. Higher salary frequently serves as a proxy for age. An employee could offer to his employer continued service with a reduction in pay. This would put the burden on the employer to show why such an arrangement is not possible and could be evidence of age discrimination of not accepted by the employer.
The at-will doctrine is alive and well in Massachusetts, and many employers expressly print in their employee handbooks that the employer has the right to terminate the employment relationship at any time with or without cause. Most handbooks state that there is a no job security or a contract of employment for any definite duration.
Most employees assume that as long as they do their jobs they will not be fired. When they see language in a handbook that they can be fired for no reason and have no job security, they may seek other means to obtain job security such as organizing a union. Some employers have decided voluntarily to limit their right to discharge at-will employees because they want to bolster morale and/or avoid the formation of a labor union.
Employment for a Definite Term
In this relationship, a written contract is entered into between the employer and employee for a specific duration, rarely more than five years. It is uncommon for lower-level clerical and blue-collar workers to be offered a contract, who are usually at-will employees. Often key employees may demand a written term contract for employment security since the employer is prevented from discharging a contract employee for anything other than good cause (poor performance, willful misconduct, theft, etc.). However, even these contracts can be terminated by the employer prior to the expiration date in the event that dire financial circumstances necessitate layoffs.
Noncompetition and Confidentiality Agreements
Many employees are required by employers to execute noncompetition and confidentiality agreements, particularly when an employee will be privy to the employer's trade secrets and confidential business information. Many businesses utilize such agreements, particularly for technical, sales, and managerial personnel. Typically, a noncompetition agreement will state that for a specified period of time within a defined geographic territory, a former employee is barred from competing with his former employer. A confidentiality agreement when trade secrets are involved often will be very broad or unlimited in geographic scope.
If a noncompetition agreement bars solicitation of the former employer's customers, the former employee and the new employer are faced with a dilemma. The employee usually has intimate knowledge of his previous employer's customers which may be valuable to the new employer. Unless a settlement can be attained, an employee who leaves his employer to join a competitor may be subject to a court injunction barring contact with the previous employer's customers.
A prospective employee should consult an attorney before signing a noncompetition agreement. If an employee already has a customer base (i.e., goodwill) prior to commencing employment, this goodwill should clarify that the employee's own book of business is specifically excluded from the agreement. The objective of a reasonable noncompetition agreement is to protect the employer's goodwill, not to appropriate the goodwill of the employee.
Massachusetts courts will enforce noncompetition agreements so long as they are necessary to protect the former employer's legitimate business interest and are reasonably limited in time and space.