Employee Restrictive Covenant Agreement

“Competitive Business” means the business activities described in Cover Terms under Competitive Business.

“Confidential Information” means non-public information relating to Employer's business, including trade secrets, customer lists, pricing, business processes, technical data, and strategic plans, but excluding information that becomes public through no fault of Employee.

“Covered Customers” means customers, vendors, referral sources, and business partners with whom Employee had material contact or for whom Employee had responsibility during the 12 months before termination of employment.

“Covered Employees” means employees with whom Employee worked or whom Employee managed during the 12 months before termination of employment.

“Passive Public Holdings” means ownership of securities of a publicly traded company representing less than five percent of any class of such company's securities, and interests in diversified mutual funds, index funds, and exchange-traded funds that may hold securities of a Competitive Business.

“Protected Interests” means the legitimate business interests that Mass. Gen. Laws ch. 149, § 24L(b)(iii) permits a noncompetition agreement to protect: Employer's trade secrets, Employer's Confidential Information that would not otherwise qualify as a trade secret, and Employer's goodwill. Protection from ordinary competition is not a Protected Interest.

“Restricted Period” means the duration specified in Cover Terms for each covenant, beginning on the date Employee's employment with Employer ends for any reason.

“Restricted Territory” means the geographic area described in Cover Terms under Restricted Territory.

“Solicit” means to directly or indirectly contact, approach, induce, encourage, or provide Confidential Information to any person or entity for the purpose of diverting business away from Employer, but does not include responding to general advertisements or unsolicited inquiries not initiated by Employee.

“Trade Secrets” has the meaning given in the Massachusetts Uniform Trade Secrets Act, Mass. Gen. Laws ch. 93, § 42.

Employer and Employee acknowledge and agree that the restrictive covenants in this agreement are supported by, and no broader than necessary to protect, one or more of the legitimate business interests that Mass. Gen. Laws ch. 149, § 24L(b)(iii) permits a noncompetition agreement to protect: (A) Employer's trade secrets; (B) Employer's Confidential Information that would not otherwise qualify as a trade secret; or (C) Employer's goodwill. The parties acknowledge that, under Massachusetts law, protection from ordinary competition is not a legitimate business interest. Employer would not provide Employee with access to these Protected Interests absent the protections in this agreement.

Employee has the right to consult with counsel prior to signing this agreement. If this agreement is entered into in connection with the commencement of employment, it is provided to Employee by the earlier of a formal offer of employment or 10 business days before the commencement of employment, and is signed by both Employer and Employee (Mass. Gen. Laws ch. 149, § 24L(b)(i)). If this agreement is entered into after the commencement of employment but not in connection with separation, it is supported by fair and reasonable consideration independent from the continuation of employment, and notice of the agreement is provided to Employee at least 10 business days before it is to be effective (Mass. Gen. Laws ch. 149, § 24L(b)(ii)). Employee acknowledges that the restrictions in this agreement are reasonable and necessary to protect Employer's Protected Interests. If the employment relationship later changes materially, Employer may ask Employee to execute a new agreement that complies with the statute then in effect. This agreement is effective as of the Effective Date listed in Cover Terms.

Employee must treat all Confidential Information as strictly confidential. Employee must not use or disclose Confidential Information except as required to perform authorized job duties or with Employer's prior written consent. Employee's obligations regarding trade secrets continue in perpetuity. Employee's obligations regarding other Confidential Information continue for the period specified in Cover Terms. Trade secrets are protected under Massachusetts law, including the Massachusetts Uniform Trade Secrets Act, Mass. Gen. Laws ch. 93, §§ 42–42G.

Nothing in this agreement prohibits Employee from: (a) reporting possible violations of law to any government agency, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, or any other federal, state, or local agency; (b) making disclosures protected under whistleblower provisions of any law; (c) discussing wages, hours, or other terms and conditions of employment as protected by applicable law; (d) testifying truthfully in legal proceedings; or (e) filing a sealed complaint in court using Confidential Information without liability. Pursuant to the Defend Trade Secrets Act (18 U.S.C. § 1833(b)), Employee may not be held criminally or civilly liable for disclosing a trade secret in confidence to a government official or attorney solely for the purpose of reporting or investigating a suspected violation of law, or in a sealed court filing.

Upon termination of employment, Employee must promptly return to Employer all documents, devices, files, credentials, and other materials containing or relating to Confidential Information. Where permitted, Employee must permanently delete electronic copies of Confidential Information from personal devices and accounts. Employee must certify compliance with this section in writing upon Employer's request.

During the Restricted Period, Employee must not Solicit, recruit, hire, or attempt to hire any Covered Employee. This restriction does not prohibit Employee from providing a professional reference upon request or from hiring a person who responds to a general advertisement not directed specifically at Employer's employees.

During the Restricted Period, Employee must not Solicit the business of any Covered Customer. This is a covenant not to solicit Employer's customers, clients, or vendors and, under Mass. Gen. Laws ch. 149, § 24L(a), it is not a noncompetition agreement subject to that section's garden-leave, duration, and notice requirements; it is governed by common-law reasonableness and protects Employer's goodwill.

During the Restricted Period, Employee must not accept, service, or do business with any Covered Customer, regardless of whether Employee or the Covered Customer first initiated contact. This restriction is broader than non-solicitation because it applies even if the Covered Customer approaches Employee. As a covenant not to transact business with Employer's customers, clients, or vendors, this restriction is excluded from the Massachusetts Noncompetition Agreement Act by Mass. Gen. Laws ch. 149, § 24L(a) and is governed by common-law reasonableness; it protects Employer's goodwill.

During the Restricted Period, Employee must not engage in, be employed by, consult for, or have an active ownership interest in any Competitive Business within the Restricted Territory. This covenant is a noncompetition agreement under the Massachusetts Noncompetition Agreement Act, Mass. Gen. Laws ch. 149, § 24L. It is no broader than necessary to protect Employer's Protected Interests, and the Restricted Period for this covenant does not exceed 12 months from the cessation of employment, except that it may extend to no more than 2 years from cessation if Employee has breached a fiduciary duty to Employer or has unlawfully taken, physically or electronically, property belonging to Employer (Mass. Gen. Laws ch. 149, § 24L(b)(iv)). This covenant is supported by the garden leave clause or other mutually-agreed upon consideration stated in Cover Terms (Mass. Gen. Laws ch. 149, § 24L(b)(vii)), and is subject to the worker exemptions stated below. The Restricted Territory is intended to be reasonable in geographic reach, and the Competitive Business is intended to be reasonable in the scope of proscribed activities, each in relation to the Protected Interests (Mass. Gen. Laws ch. 149, § 24L(b)(v)–(vi)); this covenant is intended to be consonant with public policy (Mass. Gen. Laws ch. 149, § 24L(b)(viii)). Consistent with Massachusetts common law, a covenant not to compete is enforceable only if it is necessary to protect a legitimate business interest, reasonably limited in time and space, and consonant with the public interest. Passive Public Holdings are permitted.

This noncompetition agreement is supported by the garden leave clause or other mutually-agreed upon consideration stated in Cover Terms, as required by Mass. Gen. Laws ch. 149, § 24L(b)(vii). A qualifying garden leave clause provides for the payment to Employee, on a pro-rata basis during the entirety of the Restricted Period for the non-compete and consistent with the wage-payment requirements of Mass. Gen. Laws ch. 149, § 148, of at least 50 percent of Employee's highest annualized base salary paid by Employer within the 2 years preceding the cessation of employment. Where the parties instead agree to other mutually-agreed upon consideration, that consideration is the amount stated in Cover Terms. Because the statute does not define consideration other than garden leave, the consideration is intended to be sized conservatively against the garden-leave benchmark.

Notwithstanding any other provision of this agreement, the non-compete restriction is not enforceable against, and does not apply to, Employee if Employee falls within any category against which Mass. Gen. Laws ch. 149, § 24L(c) makes a noncompetition agreement unenforceable: (i) an employee classified as nonexempt under the Fair Labor Standards Act, 29 U.S.C. §§ 201–219; (ii) an undergraduate or graduate student engaged in an internship or other short-term employment relationship while enrolled in a full-time or part-time educational program; (iii) an employee who has been terminated without cause or laid off; or (iv) an employee age 18 or younger. For purposes of this section and Mass. Gen. Laws ch. 149, § 24L, the term employee includes an independent contractor under Mass. Gen. Laws ch. 149, § 148B. The other restrictive covenants in this agreement remain in effect to the extent they are otherwise enforceable.

During the Restricted Period, Employee must not acquire or hold any active ownership interest in, serve as a director, officer, manager, or advisor to, or have material economic participation in any Competitive Business. This restriction primarily targets active or material ownership in private competitors. Passive Public Holdings are permitted. To the extent this covenant restricts Employee from engaging in activities competitive with Employer after employment ends — for example, serving as a director, officer, manager, or advisor to a Competitive Business — it is a noncompetition agreement under Mass. Gen. Laws ch. 149, § 24L and applies only on the same terms as the non-compete in this agreement, including the garden leave or other agreed consideration, the 12-month duration cap, and the worker exemptions stated above; it does not restrict Passive Public Holdings.

During the Restricted Period specified in Cover Terms for Non-Disparagement, Employee must not make statements that are intended to or reasonably likely to disparage Employer, its officers, directors, employees, products, or services. This section does not restrict Employee from making truthful statements in legal proceedings, providing truthful testimony, making disclosures to government agencies, or exercising rights protected by law.

Notwithstanding any other provision of this agreement, any restriction on Employee's right to practice Employee's profession after the termination of employment is void and unenforceable, while the remaining provisions of this agreement continue in effect, if Employee is a physician registered to practice medicine (Mass. Gen. Laws ch. 112, § 12X), a registered or practical nurse (Mass. Gen. Laws ch. 112, § 74D), a licensed psychologist (Mass. Gen. Laws ch. 112, § 129B), or a licensed social worker (Mass. Gen. Laws ch. 112, § 135C). If Employee is employed or engaged in the broadcasting industry, any restriction on Employee's right to obtain subsequent employment is void and unenforceable where Employer terminated the employment, the parties ended the employment relationship by mutual agreement, or the contract expired, and a violation of that prohibition exposes Employer to the affected Employee's reasonable attorneys' fees and costs (Mass. Gen. Laws ch. 149, § 186).

Employee represents that performing duties for Employer and complying with this agreement does not conflict with any prior agreement, court order, or legal obligation binding on Employee. Employee must promptly disclose to Employer any potential conflict that arises during employment.

Employer may disclose the existence and terms of this agreement to any prospective employer or business associate of Employee if Employer has a reasonable belief that Employee may breach this agreement. Employee consents to this disclosure.

If Employee breaches any restrictive covenant in this agreement, the Restricted Period for that covenant is extended by one day for each day of the breach, so that the full duration of the restriction runs from the date the breach ends; provided that, for the non-compete, no extension under this section may cause the Restricted Period to run beyond the latest point permitted by Mass. Gen. Laws ch. 149, § 24L(b)(iv) — that is, beyond 12 months from the cessation of employment, or beyond 2 years from the cessation of employment only where Employee has breached a fiduciary duty to Employer or has unlawfully taken, physically or electronically, property belonging to Employer. Because Massachusetts courts will not equitably extend a noncompetition restraint beyond its stated term (see EMC Corp. v. Arturi and Automile Holdings, LLC v. McGovern), this express provision is the parties' agreed mechanism for any extension during a breach, and it cannot lengthen the non-compete beyond that statutory ceiling.

Employee acknowledges that a breach of this agreement may cause Employer irreparable harm for which money damages would be inadequate. Employer may seek injunctive or other equitable relief in addition to any other remedies available at law. If Employer prevails in any action to enforce this agreement, Employee must reimburse Employer's reasonable attorney's fees and costs.

If any provision of this agreement is found to be unenforceable, the remaining provisions remain in full force and effect. The parties acknowledge that, under Mass. Gen. Laws ch. 149, § 24L(d), a court may, in its discretion, reform or otherwise revise a noncompetition agreement so as to render it valid and enforceable to the extent necessary to protect Employer's applicable legitimate business interests, and Employer requests such reformation if any restraint in this agreement is found to be overbroad. Because that reformation power is discretionary, the parties intend each restrictive covenant in this agreement to be drawn no broader than necessary and to be independently enforceable, rather than to rely on judicial revision.

Each restrictive covenant in this agreement survives the termination of Employee's employment for the Restricted Period specified in Cover Terms. Obligations under the Confidential Information and Trade Secret Protection section survive indefinitely to the extent they relate to trade secrets. All other provisions survive to the extent necessary to enforce rights that arose during employment.

Employee may not assign this agreement or any rights or obligations under it. Employer may assign this agreement to any successor or acquirer of all or substantially all of Employer's business or assets. The Employer named in this agreement is the entity that actually employs Employee. Because Mass. Gen. Laws ch. 149, § 24L governs an agreement between an employer and an employee, the noncompetition obligations run to and are enforceable by that employing entity, and are not intended to be enforced by a parent, holding company, or affiliate that is not Employee's employer. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns.

This agreement is governed by the law listed in Cover Terms, including the Massachusetts Noncompetition Agreement Act, Mass. Gen. Laws ch. 149, § 24L, for agreements entered into on or after October 1, 2018. No choice-of-law provision shall be applied to avoid the requirements of Mass. Gen. Laws ch. 149, § 24L if Employee is, and has been for at least 30 days immediately preceding the cessation of employment, a resident of or employed in Massachusetts. All civil actions relating to the noncompetition agreement in this agreement shall be brought in the county where Employee resides or, if Employer and Employee mutually agree, in Suffolk County, as required by Mass. Gen. Laws ch. 149, § 24L(f). Other disputes will be resolved in the courts of the Governing Law state, subject to non-waivable rights under applicable law.

This agreement constitutes the entire agreement between the parties regarding its subject matter and supersedes all prior agreements, understandings, and negotiations on this subject. This agreement may be amended only in writing signed by both parties. A party's failure to enforce any provision does not waive that party's right to enforce it later. This agreement may be executed in counterparts, including by electronic signature, each of which is an original.