Massachusetts Non-Compete Agreement

Introduction

Key Things to Know

1. 1

   A non-compete agreement is a contract in which one party, usually an employee, agrees not to compete with a business for a set time and area after the relationship ends. In Massachusetts it is enforceable only if it satisfies the Noncompetition Agreement Act.

2. 2

   Massachusetts enforces non-competes only under M.G.L. Chapter 149, Section 24L (the MNAA), which applies to agreements entered into on or after October 1, 2018. The clause must be in writing, signed by both parties, no broader than necessary to protect trade secrets, confidential information, or goodwill, and cannot last more than 12 months.

3. 3

   Massachusetts has no state-specific salary-dollar threshold for a non-compete. Instead, Section 24L(c) makes a non-compete unenforceable against any employee who is non-exempt under the federal Fair Labor Standards Act, which covers most hourly, overtime-eligible workers. Do not import another state's fixed salary figure.

4. 4

   A Massachusetts non-compete is capped at 12 months from the end of employment (up to 2 years only if the employee breached a fiduciary duty or unlawfully took company property). It must also be reasonable in geographic reach and in the activities it restricts, presumptively limited to where and what the employee did in the last 2 years.

5. 5

   Massachusetts requires advance notice and real consideration. The non-compete must be delivered by the earlier of a formal offer or 10 business days before the job starts, state the right to consult counsel, and be supported by a garden leave clause paying at least 50 percent of the employee's highest annualized base salary, or other mutually-agreed consideration.

6. 6

   Massachusetts bars non-competes against non-exempt (FLSA) workers, student interns, employees terminated without cause or laid off, and workers age 18 or younger (Section 24L(c)). Separate statutes void them for physicians, nurses, psychologists, social workers, and broadcasters. A court may reform an overbroad clause rather than void it entirely (Section 24L(d)).

7. 7

   Because Massachusetts caps and prices non-competes so heavily, employers often protect information instead with a nondisclosure or nonsolicitation agreement and the Massachusetts Uniform Trade Secrets Act (Chapter 93, Sections 42 to 42G), which the MNAA leaves untouched.

Massachusetts Requirements for Non-Compete Agreement

• Enforceable Only Under the MNAA

  In Massachusetts an employee non-compete is enforceable only if it satisfies the Massachusetts Noncompetition Agreement Act, M.G.L. c. 149, Section 24L, which applies to agreements entered into on or after October 1, 2018. It must be in writing, signed by both parties, no broader than necessary to protect a legitimate business interest (trade secrets, confidential information, or goodwill), and meet the Act's notice, duration, and consideration rules. A non-compete that misses any requirement is not enforceable in Massachusetts.

• No State Salary Threshold: FLSA Carve-Out

  Massachusetts sets no state-specific salary-dollar threshold. Instead, Section 24L(c) makes a non-compete unenforceable against any employee who is non-exempt under the federal Fair Labor Standards Act, which covers most hourly, overtime-eligible workers. Whether a worker is FLSA non-exempt turns on the federal duties and salary-level tests set by the U.S. Department of Labor, so confirm the current federal figure and do not rely on another state's fixed salary number.

• 12-Month Duration Cap

  Section 24L(b) caps the restricted period at 12 months from the date employment ends. The only exception is where the employee breached a fiduciary duty to the employer or unlawfully took company property, physically or electronically, in which case the period may run up to 2 years. A Massachusetts non-compete drafted for longer than 12 months, without one of those grounds, exceeds what the statute allows.

• Reasonable Geography and Scope

  Beyond the 12-month cap, a Massachusetts non-compete must be reasonable in geographic reach and in the activities it restricts (Section 24L(b)). It is presumptively reasonable if limited to the geographic areas where, and the types of services for which, the employee provided services or had a material presence during the last 2 years of employment. Keep the restriction tied to what the employee actually did, not the employer's entire market.

• Advance Notice and Right to Counsel

  Under Section 24L(b), a non-compete presented at the start of employment must be delivered by the earlier of a formal offer or 10 business days before the job begins, and must expressly state the employee's right to consult counsel. A non-compete introduced after employment starts must be supported by fair and reasonable consideration independent of continued employment, with at least 10 business days notice before it becomes effective. A non-compete presented without this notice does not meet Massachusetts law.

• Garden Leave or Other Consideration

  Section 24L(b) requires a garden leave clause or other mutually-agreed consideration. A garden leave clause pays the former employee at least 50 percent of their highest annualized base salary from the 2 years preceding termination during the entire restricted period. If the employer does not provide garden leave, it must give some other agreed consideration; in Massachusetts, continued at-will employment alone is generally not enough for a non-compete signed after the job has already started.

• Workers Who Cannot Be Bound

  Section 24L(c) makes a non-compete unenforceable against employees who are non-exempt under the Fair Labor Standards Act, undergraduate or graduate student interns, employees terminated without cause or laid off, and workers age 18 or younger. Separate Massachusetts statutes also void non-competes for physicians (c. 112 Section 12X), nurses, psychologists, social workers, and broadcasters. A non-compete against any of these workers is not enforceable in Massachusetts.

• Reformation and the Trade-Secret Alternative

  A Massachusetts court may in its discretion reform an overbroad non-compete to make it valid only to the extent necessary to protect the legitimate interest (Section 24L(d)), but it is not required to. Because a compliant non-compete is costly and capped, employers often protect information instead with a nondisclosure or nonsolicitation agreement and the Massachusetts Uniform Trade Secrets Act (c. 93, Sections 42 to 42G), which the MNAA leaves outside its restrictions.