Are Non Competes Enforceable in Massachusetts?

The answer is yes, maybe, and it depends.  Even though the Massachusetts Non Compete statute passed in 2018 was meant to provide clear guidance and requirements for valid non competes, many questions still remain.  Also many employees are still under agreements signed before that law went into effect.  For these people, decisions about how to handle a job search will require a different analysis.

Non Competes Signed After October 1, 2018

These agreements are subject to the new Massachusetts non compete statute.  There are specific requirements in that statute, including:

• The employer must agree to pay you at least 50% of your salary or other mutually agreed upon consideration during the non compete period. This is called a "garden leave" clause.
• Certain employees cannot be held to a non compete agreement. These include employees who are not exempt from overtime, employees under the age of 18, and a few other categories.
  
• If you are terminated without cause or laid off, you cannot be held to your non compete.
• You must be given ten days and advised in writing to consult an attorney before the deadline for signing the agreement.

You may be able to make some quick decisions about your non compete based on these requirements.  Be aware, however, that there are still many unanswered questions about the interpretation of the new law, so it is still a good idea to consult an employment attorney.  You can learn more about the Massachusetts non compete statute here.

Non Competes Signed Before October 1, 2018

These agreements will be analyzed under the common law rules.  They will only be enforceable if reasonably necessary to protect a "legitimate business interest." Legitimate business interests for non compete purposes are limited to protection of employer confidential information and good will.  They do not include a mere desire to prevent a key employee from helping a competitor, or to disadvantage a competitor.

The length of time and geographic reach must also be reasonable in light of the interests the employer is seeking to protect.  Prior to the new statute, court decisions on what was reasonable for a time restriction varied widely.  This is an area where an attorney with experience in this area can help you assess the risk of enforcement, based on the nature of your job and your employer's business.

You can learn more about enforcement of non competes under the common law here.

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Defenses to Enforcement of a Non Compete

Whether you signed before or after the non compete statute took effect, there are many defenses to enforcement of a non compete in Massachusetts.  These include:

• Lack of consideration given to you for your agreement not to compete;
  
• Material changes in your job and/or compensation after signing the agreement;
  
• The employer's failure to live up to material aspects of your employment agreement;
  
• The absence of any legitimate business interests to protect; and
  
• Overreach by the employer in terms of the time and geographic scope of the restriction.
  

In addition, there are certain professionals who by statute or rules of professional ethics cannot be held to a non compete in Massachusetts.  These include physicians, registered nurses, licensed social workers, and attorneys.  The policies behind those specific limitations may extend by implication to others in related fields.  This, too, you should discuss with an attorney experienced in non compete issues.

How We Can Help

Our employment lawyers can help you navigate these issues and get clarity on your rights and obligations as an employer or an employee.  We can also help you respond if you have been served with a lawsuit or a cease and desist letter.  You can use the button below to schedule a call back from a member of our team, or give us a call at  781-784-2322.

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