Category: employment law, noncompete, Massachusetts, MNAA, litigation
Seven years after Massachusetts overhauled its noncompete law, employers across the Commonwealth are about to learn whether their agreements actually hold up. Two cases now moving through the courts — Boyd v. The Boston Beer Company and Anaplan Parent v. Brennan — are forcing courts to answer the questions the legislature left open in 2018. The outcomes will affect every company in Massachusetts that relies on noncompetes to protect its business.
The Massachusetts Noncompetition Agreement Act took effect on October 1, 2018, after years of lobbying from the venture capital community and innovation-focused employers who wanted stricter limits on noncompetes. The statute imposed significant new requirements. Noncompete agreements must now be in writing, signed by both employer and employee, limited to one year in duration, and accompanied by either "garden leave" payments — defined as at least 50 percent of the employee's highest annualized base salary during the prior two years — or "other mutually agreed-upon consideration."
The law also banned noncompetes entirely for hourly workers, those terminated without cause, and interns. It was a meaningful reform. But it was also a compromise, and that compromise left critical language undefined.
The phrase "other mutually agreed-upon consideration" was inserted into the...
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