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Business Litigation: July 2015 Archives

Challenging An Arbitration Award

Alternative dispute resolution is rightly gaining steam as an efficient, fair mechanism for the resolution of complex business disputes.  Many companies are redrafting their standard-form contracts to include mandatory arbitration clauses.  This is particularly true for companies doing business across state or national borders, so that they might avoid being hauled into court in a foreign jurisdiction.  But what if you agree to arbitrate a business dispute and end up losing?  Do you have any recourse?

Avoiding Some of the Uncertainty of Non-Compete Agreements: Fiduciary Duties of Minority Shareholders as a Basis For Enforcing Non-Compete Agreements

Evaluating the enforceability of a non-compete agreement under Massachusetts law involves an inherent degree of uncertainty.  This is because courts use subjective standards to determine whether to enforce a non-compete agreement based on whether it is: (1) reasonable in scope, length of time, and geographic area; (2) protective of a legitimate interest of the employer; and (3) supported by adequate consideration.  Thus, enforceability depends on the facts of a particular case.  Employers can increase the likelihood that a non-compete agreement will be enforced as written by tailoring non-compete agreements based on the guidance of past court decisions.  To that end, non-compete agreements should be limited to a duration of no more than 1-2 years. The geographic scope of a non-compete agreement should be limited to the area actually served by the employer or where the employer has specific plans to expand.  Non-compete agreements should also be presented to employees before hiring.  If the employee is already employed, employers should include some form of additional consideration, such as a raise or one time payment, for added certainty that a non-compete agreement will be enforced as written. 

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