Non Compete Agreement Massachusetts Law


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As the summary below shows, the law is a compromise between those who believe that non-competition bans should be removed because they are fundamentally unfair to workers and bad for the Massachusetts economy,… Additional competition prohibitions should not be used to prevent normal competition or to deprive the worker of the right to use skills acquired during employment that do not correspond to a protected interest. However, employers must understand that Massachusetts courts, as long as they are exempt, will continue to analyze the applicability of these agreements under the Massachusetts common law and will likely analyze the public policy behind the Non-Competition Act. Although the law, for example, creates restrictive alliances in separation agreements, courts might ask why a confederation that lasts more than one year should be enforced. A unique aspect of the new Massachusetts non-compete clause is the requirement that non-compete clauses include a “garden vacation” clause or any other consensual consideration. A “garden holiday” clause requires the employer to pay the worker at least 50% of the worker`s highest salary during the last two years of employment during the duration of the competition. The employer`s obligation to pay for garden leave is discharged only if the worker violates the agreement. This legal obligation to pay a worker after the termination of the employment relationship may deter some employers from demanding non-competitive jobs in Massachusetts. This cause/dismissal is an important and worrying development, because an employer`s interest in protecting trade secrets and confidential information and its goodwill are aimed at preventing unfair competition, and these are interests that an employer still has to protect, regardless of the reason for the separation.

Therefore, employers who have not yet been used should consider other means of protecting these interests, such as through non-appeal agreements or appropriate severance pay. Non-competitions are also prohibited or unenforceable if an employee is dismissed or dismissed without cause. This would not be the case if the employee were dismissed for this reason. After years of debate, the Massachusetts Legislature recently passed a comprehensive competition reform law, and Governor Baker signed the law on August 10, 2018.