The Massachusetts Noncompetition Agreement Act, which went into effect on October 1, 2018, significantly altered the landscape for non-compete agreements in the state. This act aims to increase job mobility for workers and promote innovation and entrepreneurship by limiting the use of non-compete agreements in certain circumstances.
The new law applies to all non-compete agreements entered into on or after October 1, 2018, with certain exceptions for certain types of employees, such as those who are terminated without cause or laid off. Under the new law, non-compete agreements cannot be used for workers who are classified as non-exempt under the Fair Labor Standards Act (FLSA) or for workers who are classified as undergraduate or graduate students engaged in short-term employment or an internship.
The new law also requires employers to provide the employee with a copy of the agreement at least ten business days before the agreement is signed. This allows employees to review the agreement and seek legal counsel if necessary.
The Massachusetts Noncompetition Agreement Act allows for non-compete agreements to be enforced in certain circumstances, such as the sale of a business or the dissolution of a partnership. Employers must also provide “garden leave” pay of at least 50 percent of the employee’s base salary or other mutually agreed-upon compensation during the restricted period.
The law also imposes additional requirements for non-compete agreements, including that they must be in writing, signed by both parties, and must include a statement regarding the employee’s right to consult with legal counsel before signing the agreement.
Overall, the Massachusetts Noncompetition Agreement Act serves to protect workers’ rights and promote job mobility, while still allowing for reasonable limitations on competition when necessary. Employers should be aware of the requirements under the new law and ensure that their non-compete agreements comply with these requirements.
In conclusion, the Massachusetts Noncompetition Agreement Act is an important piece of legislation that significantly impacts the use of non-compete agreements in the state. Employers and employees should be aware of the provisions of this act and ensure that their non-compete agreements comply with the new requirements. By doing so, they can help to protect workers’ rights and promote innovation and entrepreneurship in the state.