March 28, 2023

Volume XIII, Number 87


March 27, 2023

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Finally, Judicial Guidance Interpreting the Massachusetts Noncompetition Agreement Act

In the past several years, there has been significant movement in the non-competition space in a number of states (with change on the federal level potentially on the horizon).  One such place with significant movement has been Massachusetts, which in 2018, passed the Massachusetts Noncompetition Agreement Act (“MNAA”). 

The MNAA imposed several new substantive requirements on employers, but drafted many of them in a manner that was left open to interpretation. One such example is that the law requires a non-competition restriction to be supported by “garden leave or other mutually-agreed upon consideration.” While the law clearly defines “garden leave,” i.e., payment “on a pro-rata basis during the entirety of the restricted period, of at least 50 percent of the employee’s highest annualized base salary paid by the employer within the 2 years preceding the employee’s termination,” it leaves “other mutually-agreed upon consideration” wholly undefined. 

Given this ambiguity, in order to ensure the validity of their non-competition agreements, many employers with Massachusetts-based employees have opted for the safest approach to consideration and agreed to provide garden leave.  Others have opted to provide some other form of “mutually-agreed upon consideration,” such as, for example, a sign-on bonus, an equity grant, or a lump sum cash payment. A question has remained, however, whether the courts would uphold such alternative forms of mutually-agreed upon but non-garden leave forms of consideration.  

Now, there is guidance.

In Cynosure LLC v. Reveal Lasers LLC (D. Mass. 2022), the Court upheld a non-competition agreement utilizing stock options as the other consideration.    Although just one court and although considering one type of alternative consideration, this holding provides employers with much-needed guidance and additional comfort in negotiating enforceable non-competition agreements with Massachusetts employees. 

Massachusetts employers should beware that their non-competition agreements may still be held unenforceable for reasons beyond lacking the appropriate monetary consideration, as there are a number of other mandatory procedural requirements employers must satisfy. For example, in this same case, the Court refused to enforce certain other non-competition restrictions because the employer had failed to disclose in the agreement that the employee had a right to consult with counsel before signing. 

We wrote about the MNAA and its requirements in more detail here, and discussed the recent proposed federal ban on non-competes here.  (Our antitrust colleagues also discuss the potential implications of the proposed federal ban in this post.) 

We recommend consulting with counsel to ensure compliance with the MNAA and to better understand the risks and limitations in utilizing non-competition agreements in the workplace. 

©1994-2023 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XIII, Number 38

About this Author

Geri L. Haight Employment Litigation Attorney Mintz, Levin, Cohn, Ferris, Glovsky and Popeo Boston, MA

Geri has a multifaceted practice focusing on employment litigation, counseling, and compliance, as well as intellectual property and trade secret matters. She leverages extensive experience as an in-house attorney and trial lawyer and with a broad range of business and employment issues to advise clients across a variety of industries, including food & beverage, consumer products, retail, and technology.

Geri’s work primarily involves litigation and counseling on federal and state labor and employment matters, including issues involving trade secret protection, the enforcement...

Natalie C. Groot Labor & Employment Litigation Attorney Mintz, Levin, Cohn, Ferris, Glovsky and Popeo Boston, MA

Natalie counsels clients and litigates employment disputes on a wide variety of employment and labor matters before state and federal courts and administrative agencies. Her litigation practice includes non-competition and non-solicitation agreements, discrimination, sexual harassment and retaliation claims, and wage and hour compliance. She also counsels clients on various employment and labor issues, including employment and separation agreements, terminations and reductions in force, internal workplace investigations, workplace health and safety, independent contractor and employee...


Danielle is a litigator who focuses her practice on employment disputes before federal and state courts and administrative agencies. 

Prior to joining the firm, Danielle worked as an extern with Mintz and the Access to Justice Commission. She also served as an extern with the Victim Rights Law Center and as a risk and compliance intern with Fidelity Investments. In law school, Danielle was a student-attorney with the Boston College Innocence Program, representing wrongly convicted individuals and collaborating with community partners on policy...