Published: seacoastonline.com
When people talk about “non-compete agreements” in New Hampshire, it is not always clear to what they are referring. As mentioned in another Seacoast Online article a few years ago, judges, lawyers, and business professionals often use different terms to describe different types of post-employment, contractual restrictions. These include “non- compete” restrictions in which the employee promises – for a limited period of time and within a certain geographic area – not to work at all for a competing company after departure. Employers also often obtain agreements that contain “non-solicitation” restrictions, which prohibit former employees for some reasonable time from trying to divert employees and/or certain clients from the company. These “non- solicitation” restrictions can also sometimes be referred to as “non-interference” or “non- piracy” restrictions. Many employers also require employees to sign agreements with “non-disclosure” restrictions, which prevent former employees from divulging or utilizing the employer’s confidential information.
This article focuses on the first type of restriction: a non-compete that prevents an employee outright from working for a competitor for some time. These restrictions are not typically enforced in New Hampshire, but there are important exceptions. One is for a noncompete restriction that is connected to the sale of a business – and not attendant only to an employment relationship. Another, and one of particular interest here, is a noncompete restriction aimed at high level employees. A recent case from the New Hampshire Superior Court Business and Commercial docket is illustrative.
In CMG v. Perron (Nov. 2025), the employee signed a noncompete agreement when he was promoted to Vice President of Finance. The agreement prohibited him from, among other things, working for a competitor that serviced common clients of the company, without any limitation that the restricted clients be ones with whom he interacted or about whom he learned confidential information. In most circumstances in New Hampshire, broad restrictions like this would be disfavored and would run afoul of New Hampshire Supreme Court precedent, like Syncom Industries, Inc. v. Wood (2007) and Merrimack Valley Wood Prods. V. Near (2005), because the restriction potentially extends beyond the legitimate protection of goodwill or confidential information. In CMG, though, the Court upheld the broad noncompete, enjoining Perron from working for the new employer.
The Court enforced the broad noncompete restriction because it concluded that Perron - with his high-level position and high-level access to highly proprietary information - would very likely disclose that information if he were allowed to work for the new employer. The Court, in essence, held that in the performance of his new duties for the competitor Perron would be unable safely to compartmentalize the highly specialized information from his prior employer, CMG. The Court cited a decision from the federal court in New Hampshire, Data Intensity LLC v. Spero (2024), which held that allowing a high-level employee to work for a competitor in a substantially similar position would present too much risk that the employee would breach his contract and disclose confidential information, even if inadvertently.
In an earlier case, ACAS (Precitech) v. Hobert (2007), the New Hampshire Supreme Court upheld the trial court’s finding that a broad noncompete was valid and necessary to prevent the high-level employee from using highly proprietary financial, marketing, strategic and other sensitive information on behalf of a competitor. As in the CMG case, the Court highlighted some of the trial court’s factual findings concerning Hobert’s apparently expressed and demonstrated bad intentions to use the confidential information to the detriment of ACAS, but, like in CMG, its holding did not depend upon a finding that the departed employee was untrustworthy. Instead, the Court mainly focused on Hobert’s high-level position at ACAS, his access to highly sensitive information, and the similarity of the positions. Importantly, the Court did not find that ACAS should have used a narrower restriction, one that for example only prevented Hobert from interacting with customers with whom he had some relationship or about whom he gained significant confidential information or a nondisclosure covenant that would have prevented him from disclosing sensitive information. Thus, although broad noncompete restrictions are strictly construed against an employer and must be narrowly tailored to protect only legitimate employer interests like goodwill and proprietary information, the ACAS Court upheld it as written, just as the lower court had done in the CMG case.
Against a backdrop of strong disfavor in New Hampshire for outright anti-competitive employee agreements, what can we learn from the holdings in the CMG, Spero and ACAS cases? One thing seems clear. In New Hampshire broad non-compete agreements may be enforced where (a) high level employees, (b) with high level access to highly proprietary information, (c) work (or desire to work) for a competitor in a similar position that would cause those employees necessarily to use that information on behalf of a competitor. Less clear is the degree to which bad behavior (untrustworthiness) by the departing employee should or will matter in the analysis. While New Hampshire courts do not explicitly rely on such bad actions to uphold broad noncompetes, they seem more comfortable enforcing them to prevent disclosure of truly proprietary information against high level employees, particularly those who have shown unscrupulous behavior.