THESE UPDATES ARE OFFERED FOR INFORMATIONAL PURPOSES ONLY AND DO NOT CONSTITUTE LEGAL ADVICE OR RECOMMENDATION
The Massachusetts Non-Compete Law went into effect on October 1, 2018. A non-competition agreement is a type of agreement in which an employer provides some consideration (such as a bonus) to an employee or independent contractor in exchange for that employee or independent contractor agreeing not to compete for a period of time after leaving the employment relationship.
The new law prohibits non-compete agreements with employees who are:
- Nonexempt under the Fair Labor Standards Act.
- Under age 18.
- Part-time college or graduate student workers.
For a non-compete agreement to be valid, it must be:
- Limited to 12 months in duration.
- Presented to new hires either with an offer letter or 10 days prior to an employee's start date, whichever is earlier.
- Signed by the employer and the worker
- Inform employees of their right to consult legal counsel before signing the agreement.
- Agreements must be limited to protect the employer's legitimate business interests and must have a reasonable geographic scope.
A few provisions employers should be aware of:
- The law applies to independent contractors as well as employees.
- If employers want existing workers to sign non-competes, they will need to offer "fair and reasonable" consideration beyond continued employment for the agreements to be valid.
- Non-compete agreements will not be enforceable against employees who are laid off or fired without cause.
- The law does not apply to non-compete agreements related to the sale of a business
- The law does not apply to non-compete agreements that are included in an employee's separation agreement (as long as the employee is given seven days to revoke the agreement).