Massachusetts overhauled its non-compete law in 2018 with the Non-Competition Agreement Act, which for the first time imposed specific requirements on employers seeking to enforce non-compete restrictions against departing employees. Before the Act, Massachusetts courts enforced non-competes under a reasonableness standard that gave employers significant latitude. The Act added mandatory procedural and substantive requirements that many employers have not fully complied with, and those compliance failures give employees legal grounds to challenge agreements that would otherwise appear binding on their face.
What the Act Requires for Enforceability
To be enforceable under the 2018 Act, a non-compete agreement must be in writing and signed by both the employer and the employee. It must expressly state that the employee has the right to consult an attorney before signing. For agreements with new employees, it must be provided by the earlier of a formal offer of employment or ten business days before the start date. Agreements presented after employment has already begun require either a raise or other fair and reasonable consideration beyond continued employment. These requirements are procedural floors, not suggestions, and an agreement that fails any one of them may be unenforceable on that ground alone.
An experienced employment attorney in Boston can review a non-compete agreement against the Act’s checklist and identify whether any of these procedural requirements were missed before an employee makes any decision about their next career move.
The Garden Leave Requirement and What It Means
The most significant change the 2018 Act introduced is the garden leave obligation. To enforce a non-compete under Massachusetts law, an employer must either pay the employee garden leave equal to at least fifty percent of the employee’s base salary for the duration of the restriction, or provide other mutually agreed-upon consideration specified in the agreement. Garden leave means the employer pays the employee not to work for a competitor during the restriction period. If the employer does not pay garden leave and has not agreed on alternative consideration, the non-compete is unenforceable. Many non-compete agreements signed after 2018 do not include a garden leave provision or adequate alternative consideration, making them vulnerable to challenge.
Geographic Scope, Duration, and the Reasonableness Test
Even if the procedural requirements are met and garden leave is addressed, the Act imposes substantive reasonableness requirements. The restriction must be no broader than necessary to protect a legitimate business interest such as trade secrets, confidential information, or goodwill. It cannot exceed one year in duration. It must be reasonable in geographic scope and in the scope of activities restricted. Courts have struck down agreements that imposed statewide or nationwide restrictions on employees who served only local markets, and agreements that restricted activities unrelated to the employee’s actual role.
When the Agreement Was Signed Before 2018
The 2018 Act applies only to non-compete agreements signed on or after October 1, 2018. Agreements signed before that date are governed by the prior common law reasonableness standard. For employees who signed older agreements, the analysis shifts to whether the restriction is reasonable in duration, geographic scope, and activity covered, and whether the employer has a legitimate business interest sufficient to justify the restriction. The Massachusetts Office of the Attorney General’s guidance on non-competes addresses the Act’s requirements and the enforcement landscape for post-2018 agreements.
