Employee Non-Compete Agreement and Enforceability Memo — Massachusetts

MASSACHUSETTS Employee Non-Compete Agreement and Enforceability Memo

Quick-Reference Summary

PART A — ENFORCEABILITY MEMO

MEMORANDUM

TO: [CLIENT / EMPLOYER]
FROM: [ATTORNEY]
DATE: [__/__/____]
RE: Enforceability of Employee Non-Competition Agreement Under Massachusetts Law (G.L. c. 149 § 24L)
PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION / WORK PRODUCT

I. Executive Summary

Massachusetts noncompetition agreements entered on or after October 1, 2018 are governed by the Massachusetts Noncompetition Agreement Act, G.L. c. 149, § 24L ("MNAA"). The MNAA is a comprehensive procedural and substantive statute that must be satisfied in every material respect for a non-compete to be valid. Section 24L is a one-way ratchet: it does not preempt more protective common law, and judicial reformation, while available, will not cure a failure to meet the statute's express prerequisites (writing, advance notice, right-to-counsel disclosure, garden-leave or other mutually-agreed consideration, 12-month cap, exempt-employee status). A non-MNAA-compliant agreement is void.

II. Governing Law

1. G.L. c. 149, § 24L — codifies notice, consideration, scope, and durational rules.
2. Common law — supplements § 24L for agreements excluded from its scope (non-solicits, NDAs, sale-of-business covenants, forfeiture provisions per Miele v. Foundation Medicine Inc., 496 Mass. 171 (2025)).
3. MA Uniform Trade Secrets Act, G.L. c. 93, §§ 42–42G (parallel trade-secret protection).

III. Substantive Requirements (§ 24L(b))

A valid noncompetition agreement must satisfy ALL of the following:

(i) Timing & notice — new hires: Provided by the earlier of a formal offer of employment OR 10 business days before commencement of employment;

(ii) Timing & notice — existing employees: Provided at least 10 business days before agreement is effective AND supported by "fair and reasonable consideration independent from the continuation of employment";

(iii) Form: Must be in writing and signed by both parties;

(iv) Right-to-counsel disclosure: Must expressly state that the employee has the right to consult with counsel before signing;

(v) Reasonableness — duration: Not to exceed 12 months from cessation of employment (extendable to 24 months only if employee breached fiduciary duty or unlawfully took employer property);

(vi) Reasonableness — geography: Limited to areas where employee, during the last two years of employment, provided services or had a material presence or influence (presumptively reasonable);

(vii) Reasonableness — restricted activities: Limited to the specific types of services the employee provided during the last two years of employment ("janitor rule" — presumptively reasonable);

(viii) Consideration: Supported by a garden-leave clause OR other mutually-agreed-upon consideration specified in the agreement.

IV. Banned Employee Categories (§ 24L(c))

A noncompetition agreement is NOT enforceable against:

(a) An employee classified as non-exempt under the FLSA;

(b) An undergraduate or graduate student engaged in short-term employment;

(c) An employee aged 18 or younger; or

(d) An employee who has been terminated without cause OR laid off.

PRACTICE NOTE: The "without cause" carve-out is a powerful employee-side defense. Employers should document termination justification contemporaneously. Massachusetts courts construe "cause" narrowly; restructuring, performance issues short of misconduct, or "fit" terminations may not qualify.

V. Garden-Leave Clause Requirements (§ 24L(b)(vii))

To qualify as a "garden-leave clause," the agreement must:

(1) Provide for payment, consistent with G.L. c. 149 § 148 (wage payment), on a pro-rata basis during the entirety of the restricted period;

(2) Pay at least 50% of the employee's highest annualized base salary paid by the employer within the two years preceding termination; AND

(3) Except in the event of employee breach, NOT permit the employer to unilaterally discontinue or refuse to make the payments.

DRAFTER'S NOTE: "Other mutually-agreed-upon consideration" is undefined by the statute. Conservative practice is to provide a signing bonus, equity grant, severance commitment, or substantial salary increase expressly tied to the non-compete in the agreement text. Mere recitation of "good and valuable consideration" or continued at-will employment will not satisfy § 24L for mid-employment agreements (§ 24L(b)(ii) requires "fair and reasonable consideration independent from the continuation of employment").

VI. Choice of Law and Forum (§ 24L(e), (f))

• Choice of law: Any choice-of-law provision selecting non-Massachusetts law is void if the employee resided in or was employed in Massachusetts for at least 30 days immediately preceding cessation of employment.
• Forum: Civil actions must be brought in the county where the employee resides, or, with mutual consent, in the Suffolk County Superior Court Business Litigation Session.

VII. Reformation

Section 24L(d) permits courts to reform overbroad provisions to render them valid. However, reformation cannot cure a failure to satisfy the threshold procedural requirements (writing, notice, right-to-counsel disclosure, garden-leave/consideration, exempt status). Defects in those elements render the agreement void ab initio.

VIII. Carve-Outs from § 24L

The following agreements are NOT governed by § 24L and remain subject to common-law reasonableness analysis (All Stainless v. Colby, 364 Mass. 773 (1974)):

• Non-solicitation of customers, clients, or vendors
• Non-solicitation/non-hire of employees (subject to Automile Holdings v. McGovern, 483 Mass. 797 (2020))
• Non-disclosure / confidentiality agreements
• Invention assignment agreements
• Sale-of-business non-competes (significant owner)
• Severance agreements giving the employee 7 business days to rescind
• Forfeiture agreements (Miele v. Foundation Medicine Inc., 496 Mass. 171 (2025))
• Garden-leave clauses standing alone
• Re-hire prohibitions

IX. FTC Non-Compete Rule Status

The FTC's April 23, 2024 final rule banning most non-competes was vacated nationwide by Ryan LLC v. Federal Trade Commission, No. 3:24-cv-00986 (N.D. Tex. Aug. 20, 2024). The FTC abandoned its Fifth Circuit appeal on September 5, 2025. The rule is not in effect. The FTC retains case-by-case Section 5 enforcement authority.

X. Recommended Action Items

☐ Confirm the employee is FLSA-exempt and over age 18.
☐ Confirm termination scenario contemplated (without-cause/layoff defense is automatic).
☐ Provide written agreement with right-to-counsel language by the earlier of formal offer or 10 business days before start (new hire) OR 10 business days before effective date with independent fair consideration (existing employee).
☐ Limit duration to 12 months or less; limit geography and restricted activities to last-2-years footprint and services.
☐ Elect garden-leave (50% of highest 2-year salary) OR document specific "mutually-agreed" consideration in the agreement.
☐ Use Massachusetts choice of law and venue.
☐ Pair with stand-alone NDA and non-solicitation agreement, which are NOT subject to § 24L.

PART B — NON-COMPETE AGREEMENT (§ 24L-COMPLIANT)

THIS NONCOMPETITION AGREEMENT (this "Agreement") is entered into as of [__/__/____] (the "Effective Date"),

by and between:

EMPLOYER:
Name: [________________________________]
Address: [________________________________]
City/State/ZIP: [________________________________]
(the "Company")

and

EMPLOYEE:
Name: [________________________________]
Address: [________________________________]
City/State/ZIP: [________________________________]
FLSA Status: ☐ Exempt ☐ Non-Exempt (STOP — § 24L bars enforcement against non-exempt employees)
Position: [________________________________]
Age (must be over 18): [____]
(the "Employee")

STATUTORY NOTICES AND RIGHT TO COUNSEL

RIGHT TO CONSULT WITH COUNSEL: Pursuant to Mass. Gen. Laws ch. 149, § 24L(b)(i), the Employee is hereby expressly notified of, and acknowledges, the RIGHT TO CONSULT WITH AN ATTORNEY OF THE EMPLOYEE'S CHOOSING PRIOR TO SIGNING THIS AGREEMENT. Employee is encouraged to do so.

ADVANCE NOTICE COMPLIANCE:

☐ New Hire: This Agreement was provided to Employee by the earlier of (a) Employee's formal offer of employment, dated [__/__/____], OR (b) ten (10) business days before Employee's commencement of employment scheduled for [__/__/____].

☐ Mid-Employment: This Agreement was provided to Employee on [__/__/____], which is at least ten (10) business days before the Effective Date, and is supported by fair and reasonable consideration independent of continued employment as described in Section 3.

SECTION 1 — DEFINITIONS

1.1 "Business" means the Company's business of [________________________________].

1.2 "Confidential Information" means non-public, proprietary, or trade-secret information of the Company, including customer lists, pricing, business plans, financial data, product roadmaps, marketing strategies, vendor terms, software, algorithms, and employee data. Consistent with G.L. c. 93, §§ 42–42G and 18 U.S.C. § 1836.

1.3 "Restricted Period" means the period commencing on Employee's cessation of employment for any reason and continuing for:

☐ Six (6) months
☐ Nine (9) months
☐ Twelve (12) months (statutory maximum)

DRAFTER'S NOTE: § 24L(b)(v) caps the Restricted Period at 12 months unless Employee breached a fiduciary duty owed to the Company or unlawfully took Company property (in which case up to 24 months).

1.4 "Geographic Area" means the geographic area(s) in which Employee, during the last two (2) years of employment, provided services or had a material presence or influence, specifically:

[________________________________]

1.5 "Restricted Activities" means activities providing the specific types of services Employee provided to the Company during the last two (2) years of employment, namely: [________________________________].

SECTION 2 — COVENANT NOT TO COMPETE

2.1 During the Restricted Period, Employee shall not, directly or indirectly, engage in the Restricted Activities within the Geographic Area for any person or entity that competes with the Business.

2.2 Scope Limitation. Employee remains free to (a) use general skills and knowledge not constituting Confidential Information; (b) work in a non-competing role within an entity that has a competing division, provided Employee does not provide services to that division; and (c) own less than 2% of a publicly traded company.

SECTION 3 — CONSIDERATION

3.1 As required by G.L. c. 149 § 24L(b)(viii), this Agreement is supported by:

☐ Option A — Garden-Leave Clause (§ 24L(b)(vii) compliant): During the entire Restricted Period, the Company shall pay Employee, on a pro-rata basis on the Company's regular payroll schedule (consistent with G.L. c. 149 § 148), an amount equal to no less than fifty percent (50%) of Employee's highest annualized base salary paid by the Company within the two (2) years preceding cessation of employment. The Company may not unilaterally discontinue or refuse to make these payments except in the event of Employee's material breach of this Agreement.

☐ Option B — Other Mutually-Agreed-Upon Consideration: [________________________________] (e.g., signing bonus of $[____]; equity grant of [____] shares; guaranteed severance of [____] months; specific salary increase of $[____]; promotion to [____]). The Parties expressly agree that this consideration is provided specifically in exchange for the covenants in this Agreement and is "fair and reasonable consideration independent from the continuation of employment" within the meaning of § 24L(b)(ii) (for mid-employment agreements).

3.2 Employee acknowledges the consideration is fair, reasonable, and adequate.

SECTION 4 — LEGITIMATE BUSINESS INTERESTS

The Company has legitimate business interests in protecting (a) its trade secrets and Confidential Information; (b) its customer goodwill; and (c) specialized training investments in Employee.

SECTION 5 — REFORMATION

If any provision is found unreasonable, the Parties consent to judicial reformation under § 24L(d) to the minimum extent necessary to render the provision valid.

SECTION 6 — REMEDIES

The Company is entitled to injunctive relief, actual damages, and (to the extent permitted by law) attorneys' fees. Each remedy is cumulative.

SECTION 7 — GOVERNING LAW AND VENUE

7.1 This Agreement is governed by the laws of the Commonwealth of Massachusetts without regard to conflicts principles.

7.2 Per § 24L(f), any civil action shall be brought in the Superior Court for the county in which Employee resides, or by mutual consent, the Suffolk County Superior Court Business Litigation Session.

SECTION 8 — TERMINATION-WITHOUT-CAUSE / LAYOFF CARVE-OUT

The Parties acknowledge that, per § 24L(c)(iv), this Agreement is NOT enforceable against Employee if Employee's employment is terminated without cause or as part of a reduction in force.

SIGNATURES

COMPANY:

EMPLOYEE:

PART C — PRE-SIGNING CHECKLIST

☐ Confirmed Employee is FLSA-exempt.
☐ Confirmed Employee is over 18 and is not an undergraduate/graduate student intern.
☐ Determined whether agreement is "new hire" or "mid-employment" (notice rules differ).
☐ Provided written agreement by earlier of formal offer or 10 business days before start (new hire) OR 10 business days before effective date (mid-employment).
☐ Mid-employment agreements: documented "fair and reasonable consideration independent from continuation of employment."
☐ Restricted Period is 12 months or less.
☐ Geographic Area limited to last-2-years footprint where Employee had material presence/influence.
☐ Restricted Activities limited to last-2-years services (janitor rule).
☐ Right-to-counsel language expressly stated.
☐ Garden-leave clause (≥50% of highest 2-year salary) OR specific mutually-agreed consideration documented in the agreement.
☐ Massachusetts choice of law; venue in county of Employee's residence or Suffolk BLS.
☐ Written and signed by both parties.
☐ Copy delivered to Employee for records.
☐ Termination-without-cause / layoff carve-out acknowledged.
☐ Pair with stand-alone NDA, customer non-solicitation, and employee non-solicitation (not subject to § 24L).
☐ If termination triggers garden-leave payments, payroll set up for pro-rata payment per G.L. c. 149 § 148.

Sources and References

• Mass. Gen. Laws ch. 149, § 24L — malegislature.gov
• Mass.gov, "Massachusetts law about noncompetition agreements" — mass.gov
• Mass. Bar Association, "Massachusetts' new non-compete law: An overview" — massbar.org
• Beck Reed Riden LLP, "The Massachusetts Noncompetition Agreement Act" — beckreedriden.com
• Miele v. Foundation Medicine Inc., 496 Mass. 171 (2025) — Google Scholar
• Automile Holdings, LLC v. McGovern, 483 Mass. 797 (2020) — Google Scholar
• All Stainless, Inc. v. Colby, 364 Mass. 773 (1974) — Google Scholar
• Ryan LLC v. FTC, No. 3:24-cv-00986 (N.D. Tex. Aug. 20, 2024) — FTC press release on appeal abandonment
• Mass. Uniform Trade Secrets Act, G.L. c. 93, §§ 42–42G — malegislature.gov

This template is provided for informational purposes only and does not constitute legal advice. Massachusetts noncompetition law is governed by a strict statute (G.L. c. 149 § 24L) that voids agreements failing any procedural prerequisite. Customize and review with a Massachusetts-licensed attorney before use.

Prepared for use on ezel.ai — a legal template platform for solo and small-firm practitioners.