Massachusetts Non-Compete Law — What Massachusetts’ Employers Need to Know

Posted by Christopher A. Callanan | Aug 31, 2018 | 0 Comments

Effective October 1, 2018, Massachusetts employers will be subject to the following new requirements governing non-compete agreements with employees: 

  1. Non-compete agreements generally cannot exceed 12 months.
  2. The law covers employees and independent contractors, however non-compete agreements are unenforceable against employees laid-off or terminated without cause, non-exempt employees, students working as interns and employees under age 18.
  3. Non-compete agreements must be supported either by a “garden leave” pay provision or some other “mutually agreed upon consideration.” Acceptable “garden leave” pay must equal at least 50% of the employee's highest annualized base salary [for 2 years prior to termination] during the non-compete period.  Acceptable “mutually agreed upon consideration” could be less than acceptable “garden leave” pay.  The new law provides no further definition of “mutually agreed upon consideration.”
  4. For non-compete agreements entered into at the beginning of employment, an employer must provide at least 10 days notice to employees of the non-compete and must inform the prospective employee of the right to consult counsel regard the proposed agreement.
  5. For non-compete agreements entered into after the commencement of employment, continued employment alone will not constitute “fair and reasonable” consideration.  
  6. Existing non-compete agreements, non-solicitation agreements and non-compete restrictions in otherwise valid separation agreements are generally not affected by the new law.

What Steps Should Employers Take Now?

Employers using non-compete agreements should review the format of  their agreements to ensure compliance with new law beginning October 1, 2018.  Instead of non-compete agreements, employers should consider using non-solicitation or non-disclosure agreements which are not subject to the new law. 

Please call Kevin Callanan, or Chris Callanan (617) 330-7575 with any questions regarding the foregoing information.

Copyright © 2020 Callanan Law LLP. All rights reserved.

About the Author

Christopher A. Callanan

Chris Callanan is an experienced trial attorney who represents businesses and individuals in a variety of commercial, employment and catastrophic personal injury matters. Mr. Callanan's business litigation practice focuses on employment disputes including breach of contract, non-compete and non-solicitation agreements, wage and hour disputes, independent contractor classification issues, employment discrimination, wrongful termination, unfair and deceptive business practices, breach of fiduciary duty, fraud, and defamation.


There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Contact Us Today

Let us know how we may help. Appointments are available by phone, by Zoom video conference or in person at our offices in Norwell or Boston.

617-849-9900 Email Us