Golden Handcuffs Law and Legal Definition

Golden handcuffs refers to a high financial incentive given to an employee to prevent an employee from leaving the company. It also prevents an employee from receiving equal remuneration from elsewhere. An employee is obliged to stay in the company even if it is unpleasant or unrewarding. A noncompetition agreement is sometimes referred to as golden handcuffs. In Union Air Conditioning v. Stilphen, 1984 Me. Super. LEXIS 223 (Me. Super. Ct. Feb. 24, 1984), the court held that they are contrary to public policy and will only be enforced to the extent that they are reasonable and also to protect the business interests in issue.