Summary of Key Changes

  • Applies to all noncompetition agreements entered into on or after October 1, 2018
  • Generally limits post-employment noncompetition periods to a maximum duration of 12 months
    • 24 months permitted for breach of fiduciary duty or unlawful taking of property
  • Absent agreement to the contrary, employers must pay employee 50% of the former employee's base salary during the period of restriction (so-called "garden leave clause")
  • A noncompete is not permitted against former employee whose employment is terminated without cause by the company unless entered into in connection with leaving the company

New Procedural Requirements

  • Noncompetes must be in writing and signed by employer and employee
  • Must expressly state that the employee can consult an attorney before signing
  • Must be provided to the employee either with the initial offer letter, or at least 10 business days before the start of employment, whichever is earlier (or in the case of a current employee at least 10 business days before the effective date)
    • Noncompetes should be part of formal offer letter
  • Noncompetes entered into after commencement of employment (both other than in connection with employment termination) must be supported by "fair and reasonable consideration"
    • Continued employment will not qualify
    • Payment of annual bonus conditioned on noncompetition agreement?

What You Need To Know Now Changes To Massachusetts Noncompetition And Trade Secret Law

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.