Suit Against Beer Maker Challenges Sufficiency Of 'Garden Leave' Payment Alternative

Former employees of The Boston Beer Company, Inc.—a company that sells brand names like Samuel Adams and Twisted Tea—have filed a putative class action lawsuit to challenge the sufficiency of monetary payouts for departing employees that had signed noncompetition agreements with the company. The complaint in Boyd et al. v. The Boston Beer Co., Inc., 25-CV-13618-GAO, filed in the U.S. District Court for the District of Massachusetts on December 1, 2025, alleges that the noncompetition agreements signed by the plaintiffs, as well as other employees, violate the Massachusetts Noncompetition Agreement Act, G.L. c. 149 § 24L (MNAA) and M.G.L. c. 93A § 11, the consumer protection statute. The lawsuit is one of the first to directly address the sufficiency of an employer's payout of "mutually agreed upon consideration" for enforcement of the noncompete in lieu of a statutorily-defined "garden leave" payment.

In general, Massachusetts law sets a high bar for the validity and enforceability of noncompetition agreements due to policy concerns about employee mobility and wage suppression. To be valid and enforceable under Massachusetts law, the MNAA sets a number of minimum requirements that a noncompetition agreement must meet. These requirements include reasonable limits placed upon the geographic reach and the scope of the proscribed activities. Agreements are also required to be no broader than necessary to protect the legitimate business interests of the employer. One of the other requirements the MNAA places on employers is that the agreement must provide compensation to the departing employee in the form of "garden leave." This is defined in the MNAA as "at least 50 percent of the employee's highest annualized base salary within the 2 years preceding the termination." As an alternative to garden leave, the statute allows employers to pay "other mutually agreed upon consideration." See G.L. 149 § 24L(b)(vii). The undefined "other mutually agreed upon consideration" is the focus of the allegations in Boyd. According to the plaintiffs' complaint, the noncompetition agreements do not include a garden leave clause, and the "other mutually agreed upon consideration" paid by Boston Beer Co. is so deficient as to constitute a violation of the MNAA.

As alleged in the complaint, the relevant employment agreement provided $3,000 (minus tax withholdings) to all of its employees in exchange for enforcement of a one-year noncompetition agreement that has two separate limitations on the employees' post-employment activities: (1) a geographic limitation on working in any area where the employee provided services, or areas about which the employee obtained proprietary information, during the last two years of his/her employment; and (2) engaging in the import, production, marketing, sale or distribution for any company that is outside of and importing alcohol products into the United States, or produced within the United States and which has a wholesale price within 25% of the wholesale price of products offered by the Boston Beer Co. Therefore, the plaintiffs allege, in exchange for the noncompetition agreement that they characterize as having a broad scope, the employees receive "dramatically less" than the garden leave requirements. They allege this payout constituted less than 5% of the plaintiffs' annual salaries, in comparison to the 50% set as a minimum by the garden leave provision.

The questions raised in Boyd surrounding the alternative payment option described, but not defined, in the MNAA have yet to be substantively addressed in the courts. Does the MNAA require that the "mutually agreed upon consideration" be comparable in value to the garden leave provision? Boyd may provide guidance on this issue for employers with Massachusetts-based employees and it is worth tracking as the case progresses in 2026.

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