Massachusetts Legislature Passes Comprehensive Noncompete Reform

After years of negotiation, on July 31, 2018, the Massachusetts legislature finally was able to pass legislation that, if signed by Governor Charlie Baker, would significantly limit the enforceability of noncompetition agreements in the Commonwealth. The Massachusetts Noncompetition Agreement Act ("the Act") would apply to all noncompetition agreements entered into on or after October 1, 2018. If signed into law, the Act generally would limit all post-employment noncompetes to a maximum duration of 12 months, and, absent agreement to the contrary, require employers to pay 50% of the former employee's base salary – termed "garden leave" pay – during the restricted period, among other constraints. This significant change to employment relationships in Massachusetts was included in a broader economic development bill, and is now on Governor Baker's desk for signature.