In Massachusetts, non-compete agreements are presumptively unenforceable as to certain professions: physicians; nurses; lawyers; broadcasters; and just recently, social workers.
Under M.G.L. c. 112, s. 12X, non-compete agreements are null and void as to physicians. In Falmouth Ob-Gyn Assocs., Inc. v. Abisla, the Supreme Judicial Court struck down a doctor’s contractual obligation to pay $250,000 in liquidated damages after leaving to compete against his former practice. In a similar vein, M.G.L. c. 112, s. 74D nullifies non-competes as to registered or licensed practical nurses.
Under the Massachusetts Rules of Professional Conduct, non-competes are unenforceable as to lawyers. However, in Pettingell v. Morrison, Mahoney & Miller, the Supreme Judicial Court considered the enforceability of a forfeiture-for-competition clause contained in a law firm’s partnership agreement. The clause required partners who withdraw from the firm, and who later compete, to forfeit certain payments. Although the Supreme Judicial Court ruled that the clause was unenforceable in that particular case, it noted that forfeiture-for-competition clauses are not per se illegal and may be upheld if a law firm could demonstrate that its survival and well-being justified such a clause.
In 1998, the Massachusetts legislature exempted individuals in the broadcasting industry, including television stations and radio stations. In particular, M.G.L. c. 149, s. 186, nullifies non-compete agreements in the broadcasting industry where: (1) the employer terminates the employee, (2) the employment relationship is terminated by mutual agreement, or (3) the employee’s contract expires. Notably, Section 186 does not prohibit the enforcement of non-compete agreements where the employee voluntarily terminates his or her employment prior to the expiration of an employment contract.
Recently, in 2008, the Massachusetts legislature made non-competes unenforceable with respect to social workers under M.G.L. c. 112, s. 135C:
A contract or agreement creating or establishing the terms of a partnership, employment, or any other form of professional relationship with a social worker licensed under this chapter that includes a restriction of the right of the social worker to practice in any geographic area for any period of time after termination of the partnership, employment or professional relationship shall be void and unenforceable with respect to that restriction. This section shall not render void or unenforceable the remainder of the contract or agreement.
Beyond these exemptions, a court will refuse to enforce a non-compete against any employee where the non-compete is not: (1) necessary to protect a legitimate business interest, (2) reasonably limited in time and geographic scope, (3) consonant with the public interest, and (4) supported by consideration. The burden of proof as to the enforceability of a non-compete agreement lies with the employer. For more information, please visit our previous blog post entitled, Massachusetts Non-Compete Agreements in a Nutshell.