Massachusetts Noncompete After a Layoff Without Cause
In 2019, Jordan, a Massachusetts resident, was hired as a sales director by Beacon Medical Devices, Inc., a Boston company. On the first day, Jordan signed an agreement stating: 'For 18 months after termination, Employee shall not work for any competitor within 50 miles of Boston. Employee acknowledges the right to consult counsel.' The agreement said nothing about pay during the restriction. In 2024, Beacon laid Jordan off in a restructuring; the termination letter said 'without cause.' Jordan took a job with a competitor in Providence, Rhode Island, about 45 miles from Boston. Beacon sues in Suffolk Superior Court for a preliminary injunction, arguing Jordan has confidential pricing information. Jordan moves to dismiss, arguing the noncompete is unenforceable. Beacon responds that a court may reform the agreement to 12 months and a narrower radius.
1. Is the noncompete enforceable under the Massachusetts Noncompetition Agreement Act?
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The noncompete is unenforceable. The Massachusetts Noncompetition Agreement Act, G.L. c. 149, § 24L, applies to agreements entered on or after October 1, 2018. Jordan's 2019 agreement is covered. The Act imposes several requirements: the agreement must be in writing and signed, must state that the employee has the right to consult counsel, must be no broader than necessary, and may not exceed 12 months (unless the employee breached a fiduciary duty or unlawfully took property). It also requires garden leave-at least 50% of the employee's highest annualized base salary during the restriction-or other mutually agreed consideration. Most importantly, a noncompete is not enforceable against an employee who is terminated without cause or laid off. Beacon laid Jordan off and called it 'without cause.' That statutory bar is dispositive. The 18-month term and the absence of garden leave are additional defects.
2. Can the court reform the agreement to 12 months and a narrower radius?
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Reformation does not save the agreement. The Act allows a court to reform or revise a noncompete to the extent necessary to make it enforceable, but that power cannot override the statute's categorical protection for employees terminated without cause or laid off. A court cannot blue-pencil the termination clause or rewrite the agreement to remove the statutory bar. Even if the court reduced the term to 12 months and narrowed the radius, Jordan would still be a laid-off employee, so the noncompete would remain unenforceable. Beacon may still seek to protect its confidential pricing information through a trade-secret claim, a confidentiality agreement, or a narrowly drawn non-solicitation clause, but it cannot obtain an injunction enforcing this noncompete.