Non-Compete Enforceability in Massachusetts: Post-2018 Reform and Garden-Leave Pay

Massachusetts non-competes are enforceable only when they satisfy a strict statutory framework, and many fail to meet it. Massachusetts substantially overhauled its non-compete law in 2018: the Massachusetts Noncompetition Agreement Act, M.G.L. c. 149 § 24L, generally applies to agreements signed on or after October 1, 2018, and sets out a series of procedural and substantive requirements that many employers fail to satisfy. The specifics depend on your situation, your agreement, and the facts of your separation, and these rules can change.

The most consequential change: under § 24L, a covered non-compete generally requires "garden leave" pay (or other mutually-agreed consideration) — meaning the statute generally requires the employer to pay the employee 50% of their highest annualized base salary during the restricted period. That economic reality leads most employers to narrow or abandon non-competes entirely.

Are non-competes enforceable in Massachusetts?

Sometimes — a Massachusetts non-compete is generally enforceable only where it clears a strict statutory bar, and many agreements do not. The Massachusetts Noncompetition Agreement Act, M.G.L. c. 149 § 24L, generally applies to agreements signed on or after October 1, 2018 and sets out both procedural and substantive requirements. The one with the most practical weight is garden-leave pay: a covered non-compete generally requires the employer to pay the employee at least 50% of their highest annualized base salary during the restricted period, unless the parties specifically identify other mutually-agreed consideration. Duration is generally capped at 12 months, the agreement generally has to be signed before the start date or with advance notice, and several categories of workers are excluded from enforcement entirely. Reasonableness in scope, geography, and time is still generally required on top of all that. The requirements that generally decide the question:

• Garden-leave requirement: During the restricted period (the time the employee cannot compete), the Act generally requires the employer to pay at least 50% of the employee's highest annualized base salary during the prior two years. The parties may agree to "other mutually-agreed consideration" in lieu, but the statute generally requires that consideration to be specifically identified.
• Duration cap: The Act generally caps duration at 12 months. Longer restrictions are typically reduced to 12 months or struck.
• Written and signed at start (or with 10-day advance notice): For pre-employment non-competes, § 24L generally requires that the agreement be signed before the start date or with at least 10 business days' advance notice. For mid-employment non-competes, the Act generally requires new and material consideration beyond continued employment.
• Specifically excluded workers: The Act generally does not allow enforcement against:
  • Non-exempt workers (FLSA non-exempt)
  • Workers under 18
  • Undergraduate or graduate student interns
  • Workers terminated without cause or laid off
• Reasonableness — still required: Even within the Act's framework, the statute generally requires a non-compete to be reasonable in scope of activity, geography, and time.
• Choice of law: The Act generally provides that Massachusetts law applies to a Massachusetts resident or employee, regardless of choice-of-law clauses.
• Customer non-solicits — outside the Act: Customer non-solicitation agreements are generally not governed by the Act; they are typically subject to common-law reasonableness review instead.

What should you say about a non-compete?

There is no required wording, but many people find it helps to respond in writing and to name the requirement the agreement misses. Three situations come up most often in Massachusetts: reviewing a proposed non-compete before starting a job, responding after a termination without cause or a layoff, and pointing out that the Act generally excludes non-exempt workers from enforcement altogether. The useful details are similar in each — which agreement is at issue, when it was signed relative to your start date, your FLSA classification, and how your employment ended. The provision people generally cite is M.G.L. c. 149 § 24L, with subsection (c) covering the excluded categories. A factual tone tends to work better than an ultimatum, because it gives an employer room to revise or withdraw the agreement. The language below is what some people use as a starting point; the specifics depend on your agreement and situation.

Reviewing a new non-compete pre-employment:

"Under M.G.L. c. 149 § 24L, the proposed non-compete is enforceable only if it (a) is signed before my start date or with 10 business days' advance notice, (b) provides for garden-leave pay during the restricted period equal to at least 50% of my highest base salary, (c) is limited to 12 months in duration, and (d) is reasonable in scope and geography. Please revise the agreement to meet these requirements or withdraw it."

If you were terminated without cause or laid off:

"I was [terminated without cause / laid off as part of a reduction in force]. Under M.G.L. c. 149 § 24L(c), the non-compete in my employment agreement is unenforceable against an employee terminated without cause or laid off. Please confirm in writing that the agreement will not be enforced."

If you are non-exempt under FLSA:

"I am a non-exempt employee under the Fair Labor Standards Act. Under M.G.L. c. 149 § 24L(c), the Act excludes non-exempt workers from non-compete enforcement. The agreement is unenforceable as to me."

What should you keep on hand?

The paperwork that answers the procedural questions comes first, because under § 24L a defect in how the agreement was made is often decisive before anyone reaches whether its terms are reasonable. The agreement itself, with the signature page and date, is the starting point, and the timing of that signature relative to your start date or to any pay change is generally what determines whether the notice and consideration requirements were met. Three facts about you do the rest of the work: your FLSA classification, since non-exempt workers are generally excluded from enforcement; the circumstances of your separation, since a layoff or a termination without cause generally excludes you too; and your highest annualized base salary in the two years before separation, which sets the garden-leave figure. What people generally keep:

• The non-compete agreement, with the signature page and date
• The timing of the signature relative to your start date or any pay change
• Your FLSA classification (exempt or non-exempt)
• The circumstances of your separation (voluntary, terminated for cause, terminated without cause, laid off)
• Your highest annualized base salary in the two years before separation
• Any communications from the former employer about enforcement

What should you do if an employer tries to enforce?

If a former employer attempts to enforce a non-compete, many people in Massachusetts consult an employment attorney early, because the procedural defects under § 24L are often dispositive without a court ever reaching the question of reasonableness. It is often worth raising whether the new employer wants to share counsel, since a new employer generally has a parallel interest in the outcome. The economics tend to shape where these disputes land: because the Act's garden-leave obligations generally make full enforcement expensive for employers, many cases settle on narrowed customer non-solicits instead. Agreements predating October 1, 2018 sit outside the Act, and the common-law reasonableness test generally applies to them instead — whether an older agreement holds up depends on its specific terms, and those cases are typically judged on whether the restriction is reasonable in scope. The steps people most often describe:

1. Many people consult a Massachusetts employment attorney early. The procedural defects under § 24L are often dispositive without a court ever reaching reasonableness.
2. The new employer may have a parallel interest and shared counsel — something worth raising.
3. Because the Act's garden-leave pay obligations generally make most non-compete enforcement economically unattractive for employers, many cases settle on narrowed customer non-solicits rather than full non-competes.
4. For agreements predating October 1, 2018, the common-law reasonableness test generally applies instead. Those agreements are typically still enforceable if reasonable in scope, but the bar is high. Whether an older agreement holds up depends on its specific terms.

The Massachusetts framework is closer to "non-competes are disfavored but possible if you really pay for them" than to a strict prohibition. In practice, the garden-leave economic cost leads most employers to use narrower restrictions (customer non-solicits, confidentiality) rather than full non-competes.

Official sources

• Massachusetts General Laws — M.G.L. c. 149 § 24L (Massachusetts Noncompetition Agreement Act)