In Part I of Key Changes to Massachusetts Noncompetes, I outlined some of the most significant new mandates that will apply to all noncompete agreements executed on or after October 1. In this post, I want to discuss some of the practical implications of the new law and how in-house counsel might address them.
- The new law does not apply to covenants not to solicit customers, clients, or vendors of the employer
While this may not sound like a significant exception, in many instances, it provides the ultimate loophole. For example, if your company uses noncompetes primarily or exclusively to prevent your sales force from competing against you, simply revising those agreements so that they are structured as nonsolicitation agreements may give you most, if not all, of the functional protections of a noncompete – but without having to worry about any of the requirements of the new law.
- Noncompete agreements entered at the outset of employment only are valid if they are provided to the employee by the earlier of a formal offer of employment or 10 business days prior to the commencement of employment
In light of this, it is critical that in-house counsel … Keep reading
Over the years, I have written blog posts related to a plethora of nuances concerning noncompetition agreements. While the signing into law last Friday of new legislation on noncompetes does not eviscerate them (despite advocacy on the part of some for such a result), there are a number of new mandates that significantly change the legal landscape – but only for noncompete agreements entered into on or after October 1, 2018. Here are what I believe to be the most significant changes to Massachusetts noncompete law:
I. The definition of noncompetes does NOT include, and the new law will NOT apply to:
- A. Covenants not to solicit or transact business with customers, clients, or vendors of the employer
- B. Noncompetes in the context of the sale of a business or substantial assets thereof, when the individual is a “significant” equity holder and will receive “significant” consideration for the transaction
- C. Noncompetes in connection with a separation agreement, if the employee is given seven days to rescind the agreement
- D. Covenants not to solicit or hire employees of the employer
II. To be valid, a noncompete MUST meet ALL of the following conditions:
- A. The noncompetition period may
… Keep reading