Massachusetts' legislature has passed a significant revision to the non-compete laws, bringing the laws in line with how the courts have been resolving non-compete disputes over the last ten years. Effective October 1, 2018, non-exempt (hourly employees), independent contractors, undergrads and grads not working full-time, anyone under eighteen (18) years of age and employees terminated without cause cannot be bound by a non-compete agreement. Exempt employees (salaried) can be subject to a non-compete agreement, as long as it has a garden leave provision (pays the employee while not competing) and is for a twelve (12) month period of time and is limited to protecting the company's legitimate business interests. Non-competes are also permissible if they relate to the sale of a business or concern a key employee or owner of a business that is being sold.
The new law does not preclude the continued use of non-solicitation of customers or non-raiding of employees provisions. The trial courts have traditionally been enforcing such provisions while declining to enforce non-competes in general.
The law provides that non-competes in effect prior to October 1, 2018 are not affected by the change in law. Thus, going forward, all non-compete agreements and provisions must be reformed to comply with these and other changes in law.
CW’s attorney Tim Cutler is available for any questions.