Massachusetts laws
MGL c. 149, § 24L Massachusetts Noncompetition Agreement Act
These laws ban noncompetition agreements for certain professions:
- MGL c. 112, § 12X Physicians
- MGL c. 112, § 74D Nurses
- MGL c. 112, § 129B Psychologists
- MGL c. 112, § 135C Social workers
- MGL c. 149, § 186 Broadcasting industry
- Mass. Rules of Professional Conduct 5.6 Lawyers
Federal laws and regulations
NOTE: On August 20, 2024, a decision out of the District Court for the Northern District of Texas set aside the Federal Trade Commission's Non-Compete Rule, which was to go into effect on September 4, 2024. However, the FTC can still address noncompetes through case-by-case enforcement actions (source). For more information, see:
- District Court in Texas Sets Aside FTC Non-Compete Rule, Holland & Knight, August 21, 2024.
- With federal ban blocked, here's where noncompete agreements stand in Massachusetts, NPR, September 5, 2024.
Executive Order on promoting competition in the American economy, Executive Office of the President, 2021.
"...[T]he Chair of the FTC is encouraged to consider working with the rest of the Commission to exercise the FTC’s statutory rulemaking authority under the Federal Trade Commission Act to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility." (Factsheet)
Non-compete clause rule, Federal Trade Commission.
"The final rule provides that it is an unfair method of competition for persons to, among other things, enter into non-compete clauses (“non-competes”) with workers on or after the final rule's effective date." For more information and documentation, visit the FTC's Noncompete rule page.
Selected cases
All Stainless, Inc. v. Colby, 364 Mass. 773 (1974)
"A covenant not to compete contained in a contract for personal services will be enforced if it is reasonable, based on all the circumstances."
Automile Holdings, LLC v. McGovern, 483 Mass. 797 (2020)
An "anti-raiding" restrictive covenant is “only reasonable, and thus enforceable, if it is (1) necessary to protect a legitimate business interest, (2) reasonably limited in time and space, and (3) consonant with the public interest.”
Boulanger v. Dunkin' Donuts, Inc., 442 Mass. 635 (2004)
Under the circumstances, "covenants not to compete signed by the plaintiff as part of his franchise agreements with the defendant were enforceable" as they were necessary and reasonable.
F. A. Bartlett Tree Expert Company vs. Barrington, 353 Mass. 585 (1968)
This case sets the standard for the material change doctrine "where it appeared that after working under that contract for some years the salesman's remuneration and sales area were changed substantially..."
Novelty Bias Binding Co. v. Shevrin, 342 Mass. 714 (1961)
"It has been long settled in this Commonwealth that a covenant inserted in a contract for personal service restricting trade or competition or freedom of employment is not invalid and may be enforced in equity provided it is necessary for the protection of the employer, is reasonably limited in time and space, and is consonant with the public interest. What is reasonable depends on the facts in each case."
Richmond Brothers, Inc. v. Westinghouse Broadcasting Co., Inc., 357 Mass. 106 (1970)
"Enforcement of the covenant...would merely be protecting the plaintiff against ordinary competition. It is not entitled to such protection."
Ryan LLC v. Federal Trade Commission, D.Texas 3:24-cv-00986 (August 20, 2024)
Decision staying the effective date of the FTC's noncompete rule. "The Court sets aside the Non-Compete rule. Consequently, the Rule shall not be enforced or otherwise take effect on its effective date of September 4, 2024 or thereafter.
Web sources
Employee noncompetition laws and practices: A Massachusetts paradigm shift goes national, Massachusetts Law Review, Vol. 103, No. 2, June 2022.
Fair competition law, Beck Reed Riden LLP.
This source keeps close tabs on noncompetition law changes across the country and especially Massachusetts. Includes 50-state surveys, and The Changing Landscape of Trade Secrets Laws and Noncompete Laws Around the Country.
HRMA Perspectives publishes “The Supreme Judicial Court and the new law imposing restrictions on non-compete agreements in Massachusetts”, Bowditch, October 2018.
Detailed summary of the provisions of the 2018 Massachusetts law.
Print sources
Covenants against competition in franchise agreements, ABA, 2012.
Drafting employment documents in Massachusetts, 4th ed., MCLE, loose-leaf. Chapter 5, Restrictive covenants and protection of trade secrets. Includes sample agreements.
Labor and employment in Massachusetts, LexisNexis, loose-leaf. Section 1-3 Employment agreements.
Massachusetts employment law, 6th ed., MCLE, 2024. Chapter 23.
Negotiating, drafting, and enforcing noncompetition agreements and related restrictive covenants, 6th ed., MCLE, 2021.
Noncompete law, LexisNexis.
Contact for Massachusetts law about noncompetition agreements
Online
| Last updated: | October 15, 2024 |
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