While noncompetition agreements are legal in New Hampshire they are not favored by the law and courts narrowly construe such contracts. In determining the reasonableness of the restraint, the court considers a three-part test: 1) whether the restraint is narrowly tailored to protect the employee’s legitimate interest; 2) whether the restrictions impose an undue hardship on the employee; and 3) whether the restriction is injurious to the public interest. If any of these factors are unreasonable, it is not likely to be enforced in court.
A recent New Hampshire case illustrates the enforceability of those contracts. In this case, a Manchester young mother graduated from a five month esthetician program and, in 2016, began working for Wax Specialists in Manchester. After she left their employ Ms. Boudreau in 2020 began working 1.5 miles away at a spa. Wax Specialists took her to court to enjoin her from the spa job. Boudreau v. Wax Specialists, #216-2020-CV-476, Hillsborough Northern District.
The 2016 Noncompete and RSA 275:60
After Ms. Boudreau began work at Wax Specialists she was presented with a restriction of no new job as an esthetician within five miles for two years. The court voided that agreement because, under New Hampshire law (RSA 275:60), a noncompete must be provided prior to hiring.
Five Mile Restriction
In 2019, Ms. Boudreau signed an agreement reducing the scope of the 2016 agreement to five miles from the terms of a 2018 agreement that had a 20 mile radius. It was the third agreement that Wax Specialists was trying to enforce in court.
The Decision in Boudreau v. Wax Specialists
The Superior Court judge noted that a five mile radius encompassed 60 other potential employers and, as a young single mother, she “would suffer undue harm” if she could not work. Also, the judge found two years “an excessively long period of time to prevent…an esthetician from competing in Manchester.” The court also found the aim of the agreements was to make it difficult to leave. That “is not a legitimate business interest,” said the judge.