You got a new job offer, and it comes with better pay and a shorter commute. Then you remember the non-compete you signed at your last job, and suddenly you are not sure if you can even accept. Massachusetts law changed the rules around non-competes significantly, and a lot of workers are still operating on outdated assumptions about what these agreements can actually do.
The 2018 Law That Changed Everything
Massachusetts overhauled non-compete law with the Massachusetts Noncompetition Agreement Act, which applies to agreements signed on or after October 1, 2018. Before this law, non-competes were governed mostly by case-by-case court decisions with few clear rules.
Under the current law, a valid non-compete must meet several requirements:
- It must be in writing and signed by both the employer and the employee
- It must state, in the agreement itself, that the employee has the right to consult an attorney before signing
- It generally cannot restrict you for longer than 12 months after your employment ends
- If you are asked to sign one when you are hired, you must receive it by the earlier of the formal job offer or 10 business days before your start date
That 12-month cap can extend up to 2 years, but only in narrow situations, such as if the employee breached a fiduciary duty or unlawfully took the employer’s property.
If a non-compete is presented to you after you have already started the job, rather than at hiring, the rules get stricter. In that case, the law requires “fair and reasonable consideration independent from the continuation of employment,” meaning your employer has to give you something of real value beyond simply letting you keep your existing job.
Who Massachusetts Noncompetes Cannot Apply To
Not every worker can legally be bound by a non-compete in Massachusetts, no matter what the document says. The law makes non-competes unenforceable against:
- Employees who are 18 years old or younger
- Student interns
- Nonexempt employees, meaning most workers paid on an hourly basis
- Employees who are terminated without cause or laid off
If you fall into one of these categories, a non-compete you signed may simply not hold up, regardless of how it was written or how confidently your former employer points to it.
The Garden Leave Requirement Most Workers Have Never Heard Of
Here is where a lot of non-competes fail without anyone realizing it. Massachusetts law requires that a non-compete be backed by either a garden leave clause or other clearly specified consideration.
A garden leave clause means your former employer must pay you at least 50 percent of your highest annualized base salary from the past two years for the entire length of the restricted period. If your agreement instead relies on “other mutually agreed upon consideration,” that consideration has to be spelled out in the agreement itself. Massachusetts courts have already ruled that simply being hired or continuing to work is not enough on its own to satisfy this requirement for agreements signed during employment.
Recent Court Decisions Are Narrowing Enforcement Further
Massachusetts courts have continued to tighten how these agreements are interpreted. A few recent examples:
- Courts have required the non-compete to be signed by your actual, direct employer, not just a parent company you never technically worked for
- At least one court refused to enforce a non-compete because the employee was never clearly told, in writing, that they had the right to consult a lawyer before signing
- The Massachusetts Supreme Judicial Court has clarified that non-solicitation agreements are treated differently from non-competes under the law, which affects how forfeiture provisions in severance agreements are enforced
The pattern is consistent. Massachusetts courts are not inclined to give employers the benefit of the doubt when a non-compete does not meet the law’s technical requirements.
What About the Federal Noncompete Ban?
You may have heard that the Federal Trade Commission tried to ban non-competes nationwide. That rule was set aside by a federal court, and the FTC has since dropped its appeal, though the agency has said it may still pursue non-compete issues through individual enforcement actions. For now, there is no active federal ban, which means Massachusetts state law is still what actually governs your agreement.
Know What You Are Signing, or What You Already Signed
Whether you are staring down a job offer with a new non-compete attached, or wondering if an old one can actually stop you from taking a new job, the answer usually comes down to details most people never read closely. Our employment law attorneys review non-competes for both workers and employers, including situations tied to a termination or layoff.
Schedule your free 15-minute consultation with Zaheer Law Group today, or call (978) 301-6100 to speak with an attorney who will actually pick up. No pressure, just answers.
This article is for informational purposes only and does not constitute legal advice. Consult an attorney for guidance specific to your situation.