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Federal Court Determines that Garden Leave Payments Under Massachusetts Non-Compete Law Are Not Wages, Limiting Former Employees’ Leverage Under Wage Act

December 9, 2022

Via: JD Supra

The District of Massachusetts recently held that garden leave payments, whereby a former employee subject to a restrictive covenant is paid by the former employer for the duration of the restrictive period, do not constitute “wages” under the Massachusetts Wage Act.

In Carroll v. Mitsubishi Chemical America, Plaintiff Khristine Carroll, a former Director of Commercial Operations at Defendant Mitsubishi Chemical America (“MCA”), alleged that MCA breached its employment contract with her and unlawfully failed to provide her wages when MCA sought to opt out of the non-compete provision and related garden leave payments.

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