Massachusetts Federal Court Enforces Noncompete Against Senior Supply Chain Executive

Recently a Federal District Court in Massachusetts barred a former senior supply chain executive from continuing in his new C-suite role with another company. The decision in Fresenius USA Manufacturing, Inc. v. Much, Case No. 1:26-cv-13572-DJC (D. Mass. 2026) offers important insights on several issues regarding the “employer signature” requirement, affiliate-level protections, and the substantive scope of noncompetition restrictions under the Massachusetts Noncompetition Agreement Act’s (“MNAA”).

Employee Rises to Senior Position in Kidney Care Industry

In 2022, the employee began working for his former employer, which was a subsidiary of a holding company that operated in the kidney care space (specifically, dialysis). Previously, the employee had never worked in the healthcare industry generally, or with respect to kidney care specifically. As Vice President North America Supply Chain, the employee had responsibility for supply chain issues across the organization’s operations in the Americas and participated in high-level strategic meetings.

In connection with the holding company’s long-term incentive plan, the employee executed a series of restrictive covenants agreements, which included, among other things, a 12-month post-termination non-competition provision governed by Massachusetts law. The agreements also provided for an $82,778 payout and additional incentive grants of $110,000, $118,000, and $115,000.

In the summer of 2026, the employee resigned from his former employer and began working for his new employer as Executive Vice President and Chief Supply Chain Officer reporting directly to the new employer’s Chief Executive Officer. The new employer, like the former employer, operated in the dialysis business.

Former Employer Seeks Injunctive Relief

Eight days after the employee started with his new employer, the former employer filed a complaint in the United States District Court for the District of Massachusetts alleging, among other things, breach of the noncompetition agreements, along with a request for a temporary restraining order and preliminary injunction relating to the same. 

The employee’s opposition to the request for injunctive relief principally relied on two arguments: (1) that the noncompetition agreements failed to comply with the MNAA’s “employer signature” requirement; and (2) that the substantive scope of the restricted activity in the noncompetition agreements was too broad.

Court Distinguishes Anaplan and Rejects Employee’s Employer Signature Argument

Among other requirements, the MNAA requires that a noncompetition agreement “must be in writing and signed by both the employer and employee.” The employee relied heavily on the recent Massachusetts Superior Court decision Anaplan Parent, LP v. Brennan, No. 2584-cv-02350 (Mass. Super. Ct. Sept. 15, 2025), which we wrote about here, and which is now on appeal with the Massachusetts Supreme Judicial Court which heard arguments on the case earlier this month. There, the court invalidated a noncompete executed by a parent entity rather than the actual employer. In particular, in this case, the employee argued the noncompetition agreements’ reference to the employer generically being a “subsidiary” of the former employer holdings company and signed by executives of such holdings company, was insufficient.

The federal court distinguished Anaplan and rejected the employee’s argument. The federal court held that the noncompetition agreements’ reference to a “subsidiary” of the holdings company that employed the employee “sufficiently implicate[d] his specific employer rather than the broader [former employer] parent company.” That is, the federal court held that unlike in Anaplan where the employee entered into the agreement with only the parent company directly, here, the noncompetition agreements expressly stated that the agreements were being entered into with the actual employer and that the officers who executed them were authorized to do so by the actual employer.

Court Holds Noncompete Scope Was Functionally Limited to Employee’s Actual Duties

The employee also argued that the noncompetition agreements were overly broad because they defined protectable interests by reference to “the Company” which encompassed the holding company and its affiliates, as opposed to just limiting the protections to his nominal employer. The court again disagreed with the employee’s arguments. The court cited to the noncompetition agreements’ limitation of restricting the employee “in circumstances where [his] duties, services, and/or responsibilities are the same as or substantially similar to any of the duties and responsibilities [he] performed for the Company,” in holding that, based on the specific facts where the employee’s supply chain role required work across the broader enterprise, the provision was functionally limited to the employee’s actual duties and responsibilities.

Ultimately, the court granted an injunction against the employee extending 12 months from the employee’s last day of work with his former employer. 

The Decision Offers Several Takeaways for Employers and Executives

While the decision has been appealed, there are several takeaways for employers and executives impacted by noncompetition agreements:

• The employer-signature question now cuts both ways. While Anaplan cast doubt on agreements executed solely by a parent entity that did not actually employ the individual, this decision signals that other courts may look to whether the agreement terms sufficiently identify the employing entity as the signatory and not whether a specific corporate name appears on the signature line. We will continue to track developments on this issue. In the meantime, employers using template agreements across subsidiaries should ensure the agreement language ties back to the employing entity and is executed by an officer authorized to act on the employing entity’s behalf.

• The scope of affiliate-level protections remains fact-dependent. The court found that a noncompete referencing a parent or affiliate entity’s interests was not overbroad under the MNAA where the restriction was functionally limited to the duties and responsibilities the employee actually performed. Whether similar provisions will withstand scrutiny in other cases will likely turn on the specific language used and the employee’s actual role within the broader organization.

• Potential for LTIP award to satisfy mutually-agreed upon consideration requirement. Neither party nor the court spent material time analyzing the adequacy of the consideration to support the MNAA’s requirement to utilize garden leave (i.e., at least one-half salary payments during noncompete period) or some other “mutually-agreed upon consideration.” In this case, the noncompetition agreements were supported by long-term incentive awards, at least one of which was cash-settled. The implied acceptance of these awards as potentially adequate consideration opens up another possible alternative to garden leave to support noncompetition agreements under the MNAA.

With the matter now on appeal with the First Circuit, and the Massachusetts Supreme Judicial Court having heard oral arguments earlier this month on the related question in Anaplan, the contours of MNAA enforcement continue to evolve. 

Mintz’s employment team will continue to monitor any further legal developments on this issue and stands by ready to assist with any compliance-related matters under the MNAA. 

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