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By now, many employers are aware that Massachusetts law governing non-competition agreements is changing at the end of this month. A non-competition covenant or agreement is a provision in either an employment agreement, offer letter or separate agreement where an employer provides to an employee or independent contractor payment or some other consideration (for example a stock option or bonus). The employee or independent contractor in turn agrees not to compete for a period of time, customarily one year, after leaving the employment relationship. To date, whether a non-competition agreement is enforceable has been largely a matter of judicial discretion and we invariably looked to case law for guidance.
Now, after a decade plus of the Legislature considering the topic, we have a new Massachusetts law effective October 1, 2018, Mass. Gen. L. c. 149, §24L (the “Act”), setting forth a number of rules governing non-competition covenants. As is the case with much legislation, the Act is a compromise among various constituencies. As such, it contains its share of ambiguities and competing interests that the courts will need to clarify over time. Nonetheless, it provides clarity in some areas. Here is a GPS to assist in the navigation of this new “non-compete” thicket and the heavily trafficked highway which will likely follow. Continue reading.....
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