Massachusetts Noncompetes: The 2018 Act Made Most Old Forms Worthless

Massachusetts spent years debating whether to follow California and void employee noncompetes outright. It landed somewhere else: noncompetes remain enforceable here, but only if the employer followed a specific set of procedural and substantive rules laid down by the Massachusetts Noncompetition Agreement Act, which took effect on 1 October 2018.

The practical consequence is that most of the requirements are about how the agreement was presented and paid for rather than about what it says. An employer who got the substance right and the process wrong has an unenforceable agreement, and the process cannot be repaired afterwards.

Notice, in writing, in advance

The agreement must be in writing, signed by both the employer and the employee, and it must expressly state that the employee has the right to consult with counsel before signing. That last requirement is a single sentence and its absence is fatal.

Timing is prescribed. For a new hire, the agreement must be provided with the formal offer or at least ten business days before employment begins, whichever comes first. For an existing employee, it must be provided at least ten business days before it takes effect.

Both rules exist to stop the practice the statute was aimed at: handing someone a noncompete on their first morning, in a stack of onboarding paperwork, with a pen and no time to think. An agreement signed that way is not saved by the employee having been happy to sign it.

Garden leave, or something else agreed and specified

This is the requirement that changed employer behaviour most. A Massachusetts noncompete must be supported either by a garden leave clause — payment during the restricted period of at least fifty percent of the employee’s highest annualised base salary within the two years preceding termination — or by other mutually agreed consideration specified in the agreement.

The statute deliberately left the alternative open-ended, and what satisfies it has been the subject of argument ever since. What is clear is that the consideration has to be identified in the agreement itself. A clause that simply recites “other good and valuable consideration” specifies nothing, and an employer relying on that language is relying on a court reading generosity into a statute drafted to restrain them.

For an existing employee, there is a further layer: the agreement must be supported by fair and reasonable consideration independent from the continuation of employment. Continued employment alone is not enough, which is the same trap North Carolina sets and which employers walk into just as often here.

Twelve months, and who cannot be bound at all

The restricted period may not exceed twelve months from the end of employment. It can be extended to two years, but only where the employee breached a fiduciary duty to the employer or unlawfully took employer property. A two-year restriction imposed as a matter of course is longer than the statute allows.

The act also removes whole categories of worker from its reach. A noncompete is not enforceable against an employee who is non-exempt under the Fair Labor Standards Act, against undergraduate or graduate students in an internship or other short-term employment, against anyone aged eighteen or younger, or — and this is the one employers most often miss — against an employee who has been terminated without cause or laid off.

That last exclusion changes the calculus of a reduction in force considerably. An employer cannot make someone redundant and then restrain them from working in the industry.

Scope, and a court that will reform rather than strike

The restriction must be no broader than necessary to protect a legitimate business interest, and reasonable in duration, geography and the scope of the prohibited activities. The statute supplies safe harbours: a geographic reach limited to the areas where the employee actually provided services or had a material presence in the last two years is presumptively reasonable, and so is a restriction limited to the types of services the employee actually provided in that period.

Where an agreement goes further, Massachusetts courts may reform it rather than discard it. That is a meaningful difference from North Carolina, where a strictly applied blue pencil rule means an overbroad covenant can fail entirely. It is not, however, an invitation to overreach, because reformation is discretionary and an employer who drafted aggressively has to persuade a judge to rescue them.

What the act does not cover

Several things commonly confused with noncompetes sit outside the statute and are governed by ordinary contract principles. Nonsolicitation of customers and of employees, confidentiality and nondisclosure agreements, noncompetes given in connection with the sale of a business, and noncompetes contained in a separation agreement where the employee is given at least seven business days to rescind are all excluded.

That last exclusion is used constantly. An employer who cannot impose a compliant noncompete during employment can frequently negotiate one at separation, in exchange for severance, with the seven-day rescission period observed.

The sale-of-business exclusion matters in transactions: a covenant given by a seller protecting the goodwill the buyer paid for is assessed under the older common law standard, not under the act, and it can run considerably longer than twelve months.

A note for multi-state employers

The act restricts the use of choice-of-law and forum clauses to escape it, applying Massachusetts law to employees who are residents of, or employed in, Massachusetts for at least thirty days before termination, and directing venue to the county where the employee resides or, by agreement, to Suffolk County.

An employer with staff in Massachusetts, North Carolina and California therefore needs three different approaches rather than one template: a compliant Massachusetts agreement, a North Carolina agreement drafted in separable units with real consideration, and a California agreement with no noncompete at all — where, since 2024, merely including one is itself unlawful. The Massachusetts business law page covers employment agreements and entity work.

What the employer usually actually needs

Working through the requirements tends to clarify something useful: most employers do not need to stop a departing employee working in the industry. They need to stop them taking the customer relationships, the pricing, the methods and the team.

Those are protected by different instruments, none of which carries the act’s procedural burden. A properly drawn confidentiality agreement covers defined information rather than everything the employee ever saw. Customer and employee nonsolicitation clauses restrict less and sit outside the statute. And Massachusetts has adopted a version of the Uniform Trade Secrets Act, which protects genuine trade secrets without any covenant at all — provided the business has actually treated the information as secret, which means access controls, marking, and an offboarding process rather than an assertion after the fact.

An employer who invests in those has protection that survives an employee’s departure, a change in the law, and a judge who is unsympathetic to restraints on people earning a living. An employer relying solely on a noncompete has one clause standing between them and nothing.

If you have been asked to sign one

Read it against the checklist before assuming it binds you. Was it given to you with the offer or ten business days before you started? Does it say in terms that you may consult a lawyer? Does it specify what you are being paid for the restriction, and is that something more than keeping your job? Is it limited to twelve months? Are you exempt under federal wage law, or were you laid off?

Any one of those can be decisive, and the statute was written on the assumption that employees would check. If you are negotiating an offer, the noncompete is a term like any other — the ten business days exist precisely so that it can be discussed before you sign, and asking for the geography to be narrowed or the period shortened at that stage is both normal and far easier than arguing about it on the way out.

Frequently Asked Questions

Our noncompete form predates October 2018. Is it still good?

Agreements entered into before the act took effect are governed by the prior common law. Anything signed on or after 1 October 2018 must satisfy the act, and a form carried forward without amendment almost certainly does not — the notice language, the timing and the specified consideration were not requirements before.

We laid someone off. Can we still enforce their noncompete?

No. The act makes a noncompete unenforceable against an employee terminated without cause or laid off. Confidentiality obligations and, depending on the drafting, nonsolicitation provisions may still apply, since those sit outside the act.

Does the act apply to independent contractors?

Yes, the act reaches noncompetition agreements with independent contractors as well as employees. Reclassifying someone as a contractor is not a route around the requirements, and in Massachusetts misclassification carries its own significant exposure.

Talk it through

If you employ people in Massachusetts under agreements written before 2018 or somewhere else, the template is worth twenty minutes of review. The Massachusetts contact page has the direct line.