Non-Compete Agreements: Navigating Massachusetts Law for Employers
Massachusetts' New Non-Compete Law and Employers
In 2018, Massachusetts introduced new legislation that has significant implications for employers seeking to safeguard their goodwill and confidential information through non-compete agreements.
Understanding the key aspects of this law is crucial for businesses in the state. It is also critical for you in understanding the pitfalls of the free or low cost non compete templates on the internet, which by and large fail to recognize Massachusetts requirements.
Key Provisions of the Law
The Massachusetts law on non-compete agreements, effective for those signed on or after October 1, 2018, includes the following key provisions:
Applicability of the Law
This law applies to any employee who lives or works in Massachusetts, irrespective of any contractual stipulations to the contrary. If your business has employees residing or working in Massachusetts, the statute will apply. However, for remote employees located in other states, the law's applicability remains uncertain and may require legal assessment.
Understanding "Garden Leave"
The Massachusetts Non-Compete Act mandates a "garden leave" provision, ensuring that employees subject to a non-compete receive at least 50% of their highest base salary throughout the restricted period. This requirement applies to new agreements signed after October 1, 2018, while pre-existing agreements are exempt. Employers have the flexibility to choose whether to enforce the non-compete with garden leave payments or waive the restrictions, depending on the specific circumstances.
Who Can Be Bound by a Non-Compete Agreement?
The law explicitly prohibits enforcing a non-compete against certain employee categories, including those not exempt from overtime, individuals under 18 years of age, undergraduate or graduate student interns, and employees terminated without cause. Determining overtime exemptions and the definition of "cause" can be complex, making it advisable to seek legal counsel to ensure proper classification and compliance.
While the cost of non-compete agreements has increased for employers, alternative restrictive covenants remain unaffected by the new law and can achieve similar objectives:
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Wondering About Using Non Compete Agreements in Your Business?
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How Our Non Compete Lawyers Can Help
For personalized legal advice tailored to your specific circumstances, it is recommended to consult with an employment attorney. We can help you get clarity on the best way to protect your business with a legally enforceable agreement. 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.