The Massachusetts Superior Court recently clarified the enforceability of noncompetition agreements by parent companies under the Massachusetts Noncompetition Agreement Act (MNAA), serving a warning to employers in the Commonwealth that deploy restrictive covenants in their work agreements. The September 11 decision in Anaplan Parent, LP v. Brennan underscores that only the actual employer – not the parent or grandparent company – can sign and enforce noncompetition agreements tied to employment under the MNAA. Here’s what the ruling means for businesses operating in Massachusetts.

An MNAA Refresher

The MNAA, effective since October 1, 2018, sets strict statutory requirements that almost every noncompetition agreement must meet to be enforceable in the Commonwealth.

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The MNAA requires that all noncompete agreements must: be in writing and signed by the employer and employee; inform the employee of their right to consult an attorney; be provided at least 10 business days before employment begins, or the agreement is to be effective, whichever is later; last no longer than 12 months after employment ends, be reasonable in geographic scope and activities restricted, and protect legitimate business interests such as trade secrets, confidential information, or goodwill; and include a garden leave clause – paying at least 50% of the employee’s highest annual base salary during the restricted period – or other mutually agreed upon consideration specified in the agreement.

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