Non Competes Signed Before the Massachusetts 2018 Law
Navigating Non-Compete Agreements in Massachusetts: What You Need to KnowIn 2018, Massachusetts implemented a significant change in the enforcement of non-compete agreements. However, it's crucial to understand that this law applies exclusively to agreements signed on or after October 1, 2018. Certain types of agreements are explicitly excluded from the statute, including non-competes signed in conjunction with severance agreements or business sales.
While these non-competes may not be subject to the new law's specific requirements, it doesn't automatically make them enforceable. Even before the statute, Massachusetts law imposed limitations on non-competes based on common law principles, and these principles continue to apply. In short, your employer still has to demonstrate that they have a legitimate business reason to enforce the non compete, that the restrictions are reasonably necessary to protect those interests, and that the length of time and geographic scope of the agreement are reasonable. If you're faced with the prospect of having a pre-2018 non-compete enforced against you or you're contemplating leaving a job you've held since before October 2018, it's wise to consult an employment lawyer before making any decisions. Meanwhile, we hope the information below provides you with valuable insights. Non Compete Agreements: Legitimate Business PurposeFor a non-compete to be enforceable in Massachusetts, it must serve the legitimate business interests of the company. The definition of "legitimate business interests" is narrower than one might expect and typically includes protecting trade secrets or confidential information and safeguarding the employer's goodwill. Mere economic interests, like preventing employees from joining competitors, do not qualify as legitimate business interests for enforcing a non-compete.
The confidential information an employer seeks to protect doesn't necessarily have to meet the legal standard of a "trade secret," but it must be genuinely confidential and proprietary. Information readily accessible in the public domain may not suffice. The concept of "goodwill" is commonly invoked with sales employees and individuals who have developed relationships with customers, prospects, and clients under the company's name. Non Compete Agreements: Time and Geographic ScopeMassachusetts courts will uphold a non-compete agreement only if it is reasonable concerning time and geographic scope. The definition of "reasonable" depends on the circumstances.
For post-2018 agreements, the statute explicitly limits the non-compete period to a maximum of 12 months. When examining time and geographic scope under common law, aside from the "bright line" 12-month limit, the analysis is similar. Courts evaluate the relationship between the interest protected and the extent of the restriction. While the statute introduced the 12-month restriction, it remains to be seen whether courts will consider this limit when assessing pre-2018 agreements. Before the statute, courts frequently found a 12-month duration reasonable, provided it aligned with the interest being safeguarded. Beyond 12 months, enforcement became less predictable, with some cases deeming two years reasonable and others excessive. Even in the absence of the statute, it's rare to see enforcement periods extending beyond two years, especially in employment-related non-competes. |
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Meet Our Employment and Non Compete Lawyers
Emily Smith-Lee is the owner and founder of slnlaw. She is a 1996 graduate of Boston College Law School. She was previously a partner at the Boston office of a large international firm, where she worked for thirteen years before starting the firm that became slnlaw in 2009. She has been recognized as Massachusetts Superlawyer each year since 2013, and in 2018 earned recognition as one of Massachusetts Lawyers Weekly's Lawyers of the Year. She has written a book on employment law: Rules of the Road, What You Need to Know About Employment Laws in Massachusetts, been interviewed by the Massachusetts Superlawyers magazine about non compete agreements, and written an op-ed in the New York Times about the dangers of non competes. Along with the rest of the slnlaw team, she has helped hundreds of clients navigate, negotiate, or defend against their non compete agreements.
Rebecca Rogers: Rebecca is a 2006 graduate of Boston College Law School, and has worked with slnlaw since 2013. She previously worked as an intellectual property litigation attorney for Fish & Richardson in Boston, Massachusetts, and clerked for the Massachusetts Supreme Judicial Court. Rebecca has helped many clients understand and evaluate their non compete agreements and develop strategies for defending against non compete enforcement and negotiating resolution.
Jenna Ordway: Jenna is a 2013 graduate of Quinnipiac Law School, and also earned an LLM in Taxation from Boston University in 2015. She has been affiliated with slnlaw since 2011, first as a law clerk and then as an attorney. Jenna has been recognized since 2019 as a "Rising Star" by Massachusetts Superlawyers. Jenna works with employers to develop reasonable and enforceable employee agreements, including non competes. She has also helped employees understand and evaluate their non compete agreements and develop strategies for defending against non compete enforcement and negotiating resolution.
Elijah Bresley: Eli is a 2014 graduate of Seton Hall Law school, and has worked with slnlaw since 2020. He previously worked for a boutique employment law firm outside of Boston, and then for the Labor and Employment department of a large Boston firm. He also spent a year clerking for the judges of the Superior Court in Hartford, Connecticut. Eli has helped clients both evaluate and negotiate their non compete agreements, and defended non compete claims in state and federal courts.
Other Non Compete Defenses
Several common defenses exist against non-competes, including:
- Lack of Consideration: If you signed a non-compete after commencing employment and didn't receive compensation for it, you may be able to resist enforcement.
- Material Changes: If your job or compensation experienced substantial changes after signing the agreement, the original contract might be voided.
- Breach by the Employer: If your employer failed to fulfill agreed-upon terms (e.g., salary), you could argue they've forfeited the right to enforce the non-compete.
- Independent Contractor Status: If you're classified as an independent contractor, you might have additional grounds to challenge the non-compete under the Massachusetts Independent Contractor Law.
How We Can Help
At slnlaw, our experienced employment lawyers are here to help you understand, challenge, or navigate non-compete agreements in Massachusetts. Whether you're facing the enforcement of a pre-2018 agreement, need assistance with a post-2018 agreement, or have questions about your rights and defenses, our legal team is ready to provide expert guidance and support tailored to your unique situation. 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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