On September 11, 2025, Judge Debra A. Squires-Lee of the Massachusetts Superior Court held that a parent company cannot enforce a noncompetition provision against the employee of one of its subsidiaries.

In what appears to be a matter of first impression, Judge Squires-Lee held that a parent company is not an “employer” within the meaning of the Massachusetts Noncompetition Agreement Act (the “Act”). As a result, Judge Squires-Lee concluded that a noncompetition provision that was signed only by a parent company and one of its subsidiaries’ employees (but not the “employer” of the worker) was unenforceable under the Act.

Statutory Background

The 2018 Act requires that covered noncompetition provisions contain several elements to be enforceable. Among other requirements, the Act requires that noncompetition agreements (1) are in writing; (2) expressly advise the employee of the right to consult with counsel before signing; and, relevant to this matter, (3) are “signed by both the employer and employee.” Prior decisions have confirmed that these procedural and substantive rules must be strictly followed to satisfy the Act.

Decision

Anaplan Parent, LP (“Parent”) sought to enforce a noncompetition agreement to prevent Timothy Brennan from working for a competitor after his resignation from Anaplan, Inc. (“Anaplan”), a subsidiary of Parent. During his employment, Brennan entered into multiple equity agreements with Parent containing noncompetition provisions. Parent and...

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