Non-compete agreements can still be enforceable even if you are laid off. However, if your layoff occurred in Massachusetts, these agreements must meet specific legal standards to hold up in court.
Our Boston non-compete agreement lawyer can review your agreement to determine if it is enforceable. We also can advise you on what to do if you’re restricted from working after losing your job.
If you’re unsure about your rights, don’t wait to get legal help. You can call us for a free consultation today.
What Is a Non-Compete Agreement, and What Does It Do?
It is a legal contract between you and your employer. It says you won’t work for a competing business or start a competing business after your job ends.
These agreements often include:
- Time limits: How long the restriction lasts
- Location limits: Where the restriction applies
- Job limits: What kind of work is restricted
Non-competes are common in many industries, but they must follow the law to be valid.
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Are Non-Compete Agreements Enforceable After a Layoff?
Whether the agreement is enforceable after a layoff depends on where you live in the U.S. Because the rules vary so much by state, it’s a good idea to talk to a lawyer in your area.
Under Massachusetts law, a non-compete agreement is only enforceable if:
- You and your employer have both signed a written agreement. Make sure you have a copy of the signed document for your records.
- It gives you something of value in return (like a new job offer or severance pay).
- It’s fair and not too restrictive.
- Your employer notifies you about it in advance.
Massachusetts generally does not allow non-compete agreements for workers who are laid off or fired without cause. If you lose your job through no fault of your own, your non-compete might not be enforceable.
Know Your Rights: Massachusetts Non-Compete Law at a Glance
Massachusetts passed a law in 2018 to protect workers from unfair non-compete clauses. The Massachusetts Noncompetition Agreement Act (G.L. c. 149, § 24L) lays out specific rules that employers must follow. If they don’t, the agreement might not be valid.
Here’s what you need to know:
10-Day Advance Notice Rule
Your employer must give you a copy of the agreement at least 10 business days before your start date or when they make the job offer. This gives you time to review it and get legal advice.
‘Garden Leave’ or Other Compensation
To be legally binding, a non-compete contract in Massachusetts must offer “garden leave pay.” This means your employer agrees to pay you during the restricted period (usually 50% of your highest base salary during employment).
If they do not, they must provide another form of fair compensation in exchange for your agreement not to compete.
No Enforcement Against Most Hourly Workers
If you are a non-exempt employee under the Fair Labor Standards Act (meaning you earn hourly wages and are entitled to overtime), non-competes are not allowed. This rule helps protect low- and moderate-income workers.
Agreements Must Be Reasonable
Even if an employer follows all the above rules, a non-compete must still be reasonable in length, geographic area, and scope of work. If the terms are too broad or harsh, a court may strike them down.
The Law Applies Only to Agreements Made After October 1, 2018
These protections only apply to non-compete agreements entered on or after October 1, 2018. Older agreements may still be judged under prior law, so it’s important to have a lawyer review yours.
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What Makes a Non-Compete Contract “Reasonable?”
Even if you’re not laid off, a non-compete must still be reasonable. Massachusetts courts can consider the following:
- Time frame: Is it too long? (Usually, more than 12 months is too much.)
- Location: Does it cover an area that is too wide?
- Job scope: Does it prevent you from working in a much broader role than you previously had?
- Hardship: Does it make it too hard for you to earn a living?
- Public interest: Would enforcing it harm the public or limit access to services?
If the court finds any of these factors unreasonable, it might not enforce the agreement.
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Our Attorneys Will Determine if Your Agreement Is Valid
If you’ve been laid off and are facing an agreement that contains a non-compete clause, you don’t have to figure out if it will hold up if challenged. Our non-compete contract lawyers in Boston will:
- Review your agreement: We will read through your contract and explain what each part means in plain English.
- Check if it’s legally valid: Not all non-competition agreements follow the rules under Massachusetts law. Our lawyer will look for anything that makes it too broad, unfair, or unenforceable.
- Look at how your job ended: If you were laid off or fired without cause, our lawyer may argue that the non-compete shouldn’t apply to you.
- Negotiate on your behalf: Sometimes, an attorney can work directly with your former employer to reduce or cancel the restrictions.
- Make your case in court (if needed): If your old employer tries to enforce the agreement unfairly, we can go to court to protect your rights.
By working with a lawyer, you’ll understand your options and avoid mistakes that could hurt your job search or future career.
Why You Should Get Legal Advice About Your Matter Now
If you’ve been laid off and have a non-compete agreement hanging over your head, you should talk to a lawyer right away. Waiting too long could limit your job options or put you at risk of a legal dispute.
We will protect your future and make sure you’re treated fairly throughout your case.
Did the FTC Ban Non-Compete Agreements in Other States?
In the spring of 2024, the Federal Trade Commission (FTC) proposed a rule to ban most non-compete agreements across the country. But in August 2024, a federal court stopped that rule from taking effect. As of now, the ban is not in place.
This means that state laws—like those in Massachusetts—still control whether non-competes are allowed and enforceable.
Learn if Your Non-Compete Contract Is Enforceable After a Layoff
Are you facing a layoff and unsure of where you stand? The issue of whether non-compete agreements are enforceable if you’re laid off can be complex. Our team can give you clear answers and help you protect your rights.
Duddy, Goodwin & Pollard stands up for workers and holds corporations accountable. We are one of the few law firms in New England that handle labor and employment matters on contingency, which means you pay us no upfront fees unless we win your case.
Contact us today for a free consultation to discuss your case.
Call or text (860) 999-9394 or complete a Free Case Evaluation form