Non-Compete Laws: Massachusetts

1 STATE Q&A. Non-Compete Laws: Massachusetts by David J. Clark, Epstein Becker & Green, , with Practical Law Labor & Employment Status: Law stated as of 04 Oct 2021 | Jurisdiction: Massachusetts , United States This document is published by Practical Law and can be found at: Request a free trial and demonstration at: A Q&A guide to Non-Compete agreements between employers and employees for private employers in Massachusetts . This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local, or municipal law may impose additional or different requirements.

2 Answers to questions can be compared across a number of jurisdictions (see Non-Compete Laws: State Q&A Tool). Overview of State Non-Compete Nurses: c. 112, 74D. Massachusetts General Laws Chapter 112, Section 74D. Law governs Non-Compete agreements for nurses certified by the Massachusetts Board of Registration in Nursing. 1. If non-competes in your jurisdiction are governed by statute(s) or regulation(s), Social Workers: c. 112, 135C. identify the state statute(s) or regulation(s). Massachusetts General Laws Chapter 112, Section 135C. governing: addresses Non-Compete agreements for social workers Non-competes in employment generally. licensed under the Massachusetts Board of Registration for Social Workers.

3 Non-competes in employment in specific industries or professions. Broadcasters: c. 149, 186. Massachusetts General Laws Chapter 149, Section 186. General Statute and Regulation governs Non-Compete agreements for employees in the broadcasting industry. The Massachusetts Noncompetition Agreement Act ( c. 149, 24L) governs Non-Compete agreements generally for agreements made on or after October 1, 2. For each statute or regulation identified 2018. in Question 1, identify the essential elements for Non-Compete enforcement Industry- or Profession-Specific Statute or and any absolute barriers to enforcement Regulation identified in the statute or regulation. Lawyers: Mass.

4 R. Prof. C. General Statute and Regulation Massachusetts Rules of Professional Conduct Rule governs Non-Compete agreements in the legal industry. The Massachusetts Noncompetition Agreement Act (MNAA) governs Non-Compete agreements generally Physicians: c. 112, 12X ( c. 149, 24L). The act is effective for agreements made on or after October 1, 2018. Under the MNAA, to be Massachusetts General Laws Chapter 112, Section 12X. valid and enforceable a Non-Compete agreement must: addresses Non-Compete agreements for physicians licensed by the Massachusetts Board of Registration in Be in writing and signed by both the employer and the Medicine. employee. 2021 Thomson Reuters.

5 All rights reserved. Use of Practical Law websites and services is subject to the Terms of Use ( ) and Privacy Policy ( ). Non-Compete Laws: Massachusetts Expressly state that the employee may consult with an Employees that have been terminated without cause or attorney before signing. laid off. If made before employment begins, be provided to the Employees age 18 or younger. employee by the earlier of either: ( c. 149, 24L(c).). the formal offer of employment; or Under the MNAA, covered Non-Compete agreements at least ten business days before the employment include forfeiture for competition agreements, but do not begins. include: If made after employment begins but not in connection Covenants not to solicit or hire the employer's with termination of employment, be: employees.

6 Supported by fair and reasonable consideration Covenants not to solicit or transact business with the independent from continued employment; and employer's customers, clients, or vendors. provided to the employee at least ten business days Non-Compete agreements made in connection with the before the agreement is effective. sale of a business or substantially all of the operating Be no broader than necessary to protect one or more of assets of a business, if the restricted party: the following legitimate interests of the employer: is an owner, member, or partner of the sold entity; and trade secrets; will receive significant consideration or benefit from confidential information that is not a trade secret; or the sale.

7 The employer's goodwill. Non-Compete agreements made outside of an employment relationship . Not extend for longer than one year from the date the employment ends, or longer than two years if the Forfeiture agreements. employee: Non-disclosure or confidentiality agreements. breached their fiduciary duty to the employer; or Invention assignment agreements. unlawfully took the employer's property, either Garden leave clauses. physically or electronically. Non-Compete agreements made in connection with the Be reasonable in geographic scope. An agreement is employee's termination where the employer expressly presumed reasonable if it is limited to regions where the gives the employee seven business days to rescind employee provided services or had a material presence acceptance.

8 Or influence within the last two years of employment. Agreements where the employee agrees to not apply for Be reasonable in the scope of prohibited activities. An reemployment with the same employer after termination. agreement is presumed reasonable if it is limited to the specific services provided by the employee within the ( c. 149, 24L(a).). last two years of employment. Be supported by a garden leave clause or other express, Industry- or Profession-Specific Statute or mutually-agreed consideration for the duration of the Regulation restricted period. Lawyers: Mass. R. Prof. C. Be consonant with public policy. A lawyer cannot offer or make: ( c. 149, 24L(b).)

9 A partnership or employment agreement that Employers may not enforce Non-Compete agreements restricts lawyers from practicing law after ending the against: relationship , except for an agreement about retirement benefits. An employee who is classified as nonexempt under the Fair Labor Standards Act (29 210 to 219). A settlement agreement that restricts lawyers from practicing law. Undergraduate or graduate students participating in internships or short-term employment. (Mass. R. Prof. C. ). 2021 Thomson Reuters. All rights reserved. Use of Practical Law websites and services is subject to the Terms of Use 2 Practical Law ( ) and Privacy Policy ( ). Non-Compete Laws: Massachusetts Physicians: c.

10 112, 12X A Non-Compete agreement may be presumed necessary A physician's employment or partnership agreement may where the legitimate business interest cannot be not have a Non-Compete provision ( c. 112, 12X). adequately protected by an alternative restrictive covenant, including: Nurses: c. 112, 74D A non-solicitation agreement. A nurse's employment or partnership agreement may not A non-disclosure agreement. have a Non-Compete provision ( c. 112, 74D). A confidentiality agreement. Social Workers: c. 112, 135C ( c. 149, 24L(b)(iii).). A Non-Compete provision in a social worker's employment These interests align with those found protected or partnership agreement is void ( c.)