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

Massachusetts substantially overhauled its non-compete law in 2018. The Massachusetts Noncompetition Agreement Act, M.G.L. c. 149 § 24L, applies to agreements signed on or after October 1, 2018, and imposes a series of procedural and substantive requirements that many employers fail to satisfy.

The most consequential change: a covered non-compete requires "garden leave" pay (or other mutually-agreed consideration) — meaning the employer typically must pay the employee 50% of their highest annualized base salary during the restricted period. That economic reality makes most employers narrow or abandon non-competes entirely.

The rule, in plain terms

• Garden-leave requirement: During the restricted period (the time the employee cannot compete), the employer must 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 that consideration must be specifically identified.
• Duration cap: Maximum 12 months. Longer restrictions are reduced to 12 months or struck.
• Written and signed at start (or with 10-day advance notice): Pre-employment non-competes must be signed before the start date or with at least 10 business days' advance notice. Mid-employment non-competes require new and material consideration beyond continued employment.
• Specifically excluded workers: The Act 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, a non-compete must be reasonable in scope of activity, geography, and time.
• Choice of law: The Act 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 not governed by the Act; they are subject to common-law reasonableness review.

Scripts to use

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."

When 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."

When 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 to document

• 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

When to escalate

If a former employer attempts to enforce a non-compete:

1. Consult a Massachusetts employment attorney early. The procedural defects under § 24L are often dispositive without reaching reasonableness.
2. The new employer may have parallel interest and shared counsel.
3. Garden-leave pay obligations 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 applies. Those agreements are still enforceable if reasonable in scope, but the bar is high.

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 causes most employers to use narrower restrictions (customer non-solicits, confidentiality) rather than full non-competes.

Educational content only — not legal advice. Employment law varies by jurisdiction and situation. Consult a qualified employment attorney for advice specific to your circumstances.