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Non-Compete Agreement Leads to Potential Liability for Employer

August 1995

In a fascinating “man bites dog” reversal, a Massachusetts court has refused to dismiss the vice president of a company as a defendant in a lawsuit involving a non-compete agreement. The company, and one of its officers who had been involved in the hiring process, were sued when they demanded that a new employee sign a non-compete agreement. The employee had refused to do so, and claimed deceit and negligent misrepresentation by reason of the company’s failure to warn her that this would be a condition of employment.

The moral of the story: always provide a prospective employee with a copy of any non-compete agreement before the employee accepts employment, and before the employee resigns from another job in expectation of the new job.