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Are Non-Competes Enforceable in Massachusetts? Finally, Some Answers

For years, when asked by clients whether non-competition agreements are enforceable in Massachusetts, lawyers have had to say “it depends.”  Well, it still does – but not as much.  On August 10, 2018, Massachusetts Governor Baker signed a law that will take effect on October 1, 2018 and which will finally provide some clear guidance.

Here is a brief summary of some of what you need to know:

  • Non-competes are not enforceable against
    • non-exempt employees under the Fair Labor Standards Act;
    • undergraduates and graduate students working as interns or not full-time;
    • employees terminated without cause or laid off; or
    • anyone 18 or younger.
  • The law does not cover all restrictive covenants, just non-competes;
  • The law covers both employees and independent contractors (referred to collectively here as employees);
  • As a general rule, non-competes are limited to twelve months;
  • To be enforceable,
    • non-competes have to signed by both parties,
    • the employee must be advised of the right to consult counsel prior to signing,
    • the non-compete has to be presented to the employee at the time of the formal offer or ten days before the employment begins, whichever is earlier;
    • if entered into after the employment has begun, all the same requirements apply (including ten days’ notice), but there must be additional fair and reasonable consideration – on-going employment is no longer enough even for an at will employee;
    • the non-compete must be no broader than necessary to protect the employer’s trade secrets, confidential information and/or good will, and it must be reasonable in geographic scope and the scope of prohibited activities; provided, however, that it will be presumptively reasonable if it is limited to only the specific types of services provided by the employee during the last two years of employment;
    • the non-compete must be consistent with public policy; and
    • the non-compete must include “garden leave” (payment of no less than 50% of annualized compensation, pro rata for the period of the restriction) or other mutually agreed upon consideration.

As with all legal matters, if you have questions or concerns, consult legal counsel. 

© 2019 SHERIN AND LODGEN LLP

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About this Author

Brian J MacDonough, Employment Law, Sherin and Lodgen Law Firm
Partner

Brian J. MacDonough concentrates his practice in employment law and executive advocacy. He handles a wide range of matters, including contract negotiation and enforcement, discrimination, whistleblowing, wage and hour issues, and wrongful termination. In particular, Brian counsels and represents executives and professionals regarding sophisticated employment and compensation matters, including employment agreements, change of control agreements, equity and deferred compensation vehicles, non-competition and other restrictive covenants, severance /separation terms, and...

617.646.2286
Nancy S. Shilepsky. Employment Attorney, Sherin and Lodgen Law FIrm
Partner

Nancy S. Shilepsky is a leading influence in the world of executive advocacy, employment law and employment litigation. In May 2015, Nancy was selected as a Fellow of the Litigation Counsel of America (LCA). The LCA is a trial lawyer honorary society composed of less than one-half of one percent of American lawyers. Fellowship in the LCA is highly selective and by invitation only. Fellows are selected based upon excellence and accomplishment in litigation, and superior ethical reputation. She has been a Fellow of the College of Labor and Employment Lawyers since 2000.

617.646.2025