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Ray
Ray, Lawyer
Category: Legal
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Experience:  30 years in civil, probate, real estate, elder law
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I live in MA and my company is in Texas I am considered a

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I live in MA and my company is in Texas I am considered a fulltime w-2 employee and I only receive commission if I sell and deliver consulting work. is that legal in MA? I am leaving my company and will owe the company 30K from draws because I did not close 2 M in 2 years. I closed 400K. Also the company does not pay for healthcare- no benefits at all and I have to pay for all of my sales and marketing expenses. I am paying them 40% of what I close and receiving no benefit. I am leaving because they do not have the resources to deliver the consulting I sell and I going into debt every month I am there
JA: Because employment law varies from place to place, can you tell me what state this is in?
Customer: I live in MA and work from my home office in MA the company's headquarter is in Houston Texas
JA: Has anything been filed or reported?
Customer: no
JA: Anything else you want the lawyer to know before I connect you?
Customer: yes my non compete says I have no5 yr non compete because of my age and then it says if I sell 2M is that legal?

Hi and welcome to JA. Ray here to help you today.Please bear with me a few moments while I review your question and respond.

It is legal here if the company is paying you commission against draw and you net minimum wage.The noncomepete if the business is in Texas and you are in MA may have trouble enforcing it so far away.In Massachusetts, courts will enforce noncompete agreements if they are reasonable in time and geographic scope, supported by consideration, and only to the extent necessary to protect a legitimate business interest. What that actually means requires some explanation, and this simply stated standard can result in widely differing results form case to case.The noncompete may not be enforceable in this case.given the distance, etc.You may want to try and locate other employment in MA and see if they try to enforce this or not.

I am not sure they can enforce the $30k you owe here either.If they try to sue you for it then Chapter7 woul be an option to discharge the judgment.

Reference

Massachusetts court opinions state that, to be enforceable, the restriction on competition must be "necessary to protect a legitimate business interest, reasonably limited in time and space, and consonant with the public interest." The court will examine the particular agreement and surrounding circumstances to determine whether the noncompete is reasonable, and the terms may be "no more restrictive than necessary." In analyzing a noncompete, a Massachusetts court will strictly construe the agreement in favor of the employee because of his or her weak bargaining power in comparison to that of the employer.

Legitimate Business Interests

Business interests considered legitimate enough to merit protection under noncompete agreements and similar provisions include:
-Proprietary information
-Confidential business information such as customer lists
-Trade secrets
-Good will, also called good reputation
-Customer lists

The Supreme Judicial Court of Massachusetts has stated that "ordinary competition" is not a legitimate interest worthy of protection.

Limits on Time and Space

Massachusetts requires that noncompetes impose reasonable restrictions on how long a former employee may not compete and in what geographical area he or she may not engage in competing business for that time period. Many decisions have found durations under five years to be reasonable, but it is entirely dependent on the individual situation.

Consistent With Public Interest

Massachusetts courts recognize the tension between two public interests: an employer's right to protect its legitimate business interests from the potentially damaging commercial activity of a former employee, and that employee's right to earn a living after leaving employment by participating in robust commercial activity of his or her choice. The court may find the terms of a noncompete inconsistent with either of these public interests.

Reformation of Agreement

A Massachusetts court will wholly enforce a completely valid noncompetition agreement, but may reform individually invalid parts of an otherwise legitimate agreement. For example, the court might shorten the unreasonable duration time of a noncompete, leaving its other reasonable terms intact.

I appreciate the chance to help you today.Thanks again.

If you can positive rate 5 stars it is much appreciated.

Customer: replied 3 months ago.
You said "commission against draw and you net minimum wage" I do not get a draw nor do I make minimum wage I only get paid if I sell and there is commission. I earned 160K last year this year I have only brought in 5 k since January. The draw he gave me in Feb and March was not a draw but a loan which is why I owe him 30 K. When I started he gave me 21K as a loan if I sold 2M I sold 425 K since I started so it looks like I will owe him money??

Yes if these were loans and you signed for them then you would owe them.Again you might be looking at Chapter 7 if he tries to enforce the loans and gets judgment.It would be your means to get these off your back here and start fresh.

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