Are Non Competes Legal in Maryland

Maryland has joined many other states in limiting the legality of non-compete obligations. Maryland Code, Labor & Employment, § 3-716 states that all non-compete clauses are void for employees earning less than $15 per hour or $31,200 per year. However, nothing prevents employers from retaining proprietary information such as customer lists or proprietary information. Therefore, companies cannot restrict how or when a former employee can look for a new job after leaving a company if they are within the income level limits. A local non-competition lawyer could help determine whether a non-compete obligation applies to an employee. In the District of Columbia, the D.C. Council enacted the D.C. Ban on Non-Competition Agreements Amendment Act of 2020, which invalidates non-compete obligations issued on or after the 1st. October 2022, the current date of application of the law. Non-compete obligations entered into before the date of applicability remain subject to the common law of D.C. The courts will also consider terms such as geographic limitation, time limit and scope of the restriction to determine relevance and thus applicability. What is considered to be an appropriate temporal and geographical restriction in the case of a non-compete obligation depends on the specific facts of the case. In the past, however, Maryland courts have upheld non-challenges with 2-year restrictions.

With respect to geographical restrictions, the courts generally consider what the former employer`s territory covers. Recent changes to Maryland laws prohibit the enforcement of non-compete obligations for workers who fall below a certain level of income. While this changes the legal rights of some employees, many other people are still subject to these clauses in their employment contracts. A non-competing attorney in Maryland may be able to help if there are disagreements about the legality, scope, and enforceability of non-compete obligations. This includes situations where a clause may be illegal under the law or where a more thorough reading of a contract may be required to establish a party`s rights. Contact a civil litigation lawyer today to learn more. So far in 2019, there has been a significant movement at the state level toward limiting agreements for low-income workers, continuing the trend of 2018. Laws restricting non-compete obligations for income-tested workers have been passed in Maine, New Hampshire, Rhode Island and Washington in recent weeks or will soon go into effect. Massachusetts, Utah, Idaho and Colorado passed or amended laws in 2018 that restricted the use of non-compete obligations by employers in their states. And in recent years, California, Illinois and Nevada have also passed laws to control the use of non-compete clauses in the workplace.

Other states have reportedly tried to restrict non-competition clauses, but so far none of these proposals have been implemented. Despite laws restricting the non-compete clause for some employees, these clauses still have legal implications for others. Generally, a non-compete obligation is enforceable if the terms are „reasonable”. These agreements must be closely tailored and must not prevent an employee from earning a living in his or her field. To answer this question, it may be necessary to take the case to court. Maryland`s civil courts have jurisdiction to require an employee to comply with the terms of these contracts. On the other hand, they can also hear cases of employees invoking an illegal non-competition clause. A non-competing lawyer from Maryland could help make arguments in court to protect the rights of the parties. The Federal Workforce Mobility Act was introduced in the United States. Senate in early 2018 by Connecticut Democratic Senator Christopher Murphy. The law would ban all non-compete clauses, but Congressional action on the bill was pretty much limited to its introduction. Stay one step ahead of open enrollment tasks with this 90-day work schedule.

Therefore, the applicability of a non-compete obligation works on a case-by-case basis. An agreement should restrict an employee`s rights in a specific geographic area, for a short period of time and in a specific segment of the market. A non-compete attorney in Maryland could help assess the language of a nonconpetition code to determine if it is legally enforceable. While the law prohibits non-compete obligations, it expressly reserves the right of employers to enforce contracts that prohibit „the inclusion or use of a customer list or other proprietary customer-related information.” However, the law does not address other types of restrictive agreements, such as non-solicitation agreements for customers and employees. Is the non-compete obligation limited to what is necessary to protect the employer? Most non-compete clauses have two main limitations: While DC employers may continue to use confidentiality agreements to protect confidential, proprietary or sensitive information, customer lists, customer lists, and trade secrets, the Use of Non-Solicitation Provisions Act that restrict employee solicitation, of customers and / or customers is silent. Interpretation by the courts may determine the applicability of the law to these provisions prohibiting poaching. The law does not mention whether an employer will be punished for violations, nor does it declare or create a law enforcement system, nor does it provide for a private right of action for injured workers. Effective October 1, 2019, Maryland will prohibit the use of non-compete obligations for employees earning at least $15 per hour or $31,200 per year. Specifically, the law states: „A non-compete obligation or conflict of interest in an employment contract or similar document or agreement that restricts an employee`s ability to take employment with a new employer or become self-employed in the same or similar business is null and void because it is contrary to public policy of the state.” Our lawyers at General Counsel, P.C. have experience in protecting various employer interests while remaining narrow enough to be enforceable. Maryland employers can no longer require non-compete obligations from certain employees.

The Obama administration has commented on the non-competition clauses. In 2016, the Obama White House released a report on workplace non-compete clauses, concluding that the agreements „can impose significant costs on workers, consumers, and the economy at large.” As of October 1, 2019, Maryland`s non-compete clause and conflict of interest clauses prohibit non-compete obligations for „low-wage” employees who earn $31,200 per year or $15.00 per hour. The law does not apply to agreements regarding the inclusion or use of a customer list or other proprietary customer information; As a result, non-disclosure agreements that protect the employer`s client information are still enforceable against these low-wage workers. C2`s federal clients often have employees working on contracts across the country. A common question is how clients can effectively manage restrictive post-employment agreements (e.g., non-compete obligations and solicitation bans) across their workforce. This can be difficult, as laws relating to non-compete obligations are currently governed by state law. Many state legislators have been active in this area in recent years. In particular, Maryland recently joined a growing group of states limiting the application of a non-compete clause to low-wage workers. Any non-compete obligation that violates this law is considered null and void, even if it is voluntarily contracted by the employee.

Based on the trends we have observed in recent years, the courts are moving away from the application of global non-compete obligations; They only apply non-compete obligations that are strictly designed to protect a company`s reasonable business interests, such as relationships with protected customers and confidential information. In many cases, courts have chosen not to enforce non-compete obligations that largely prohibit an employee from working in any capacity for a competitor. As a general rule, courts apply only non-compete obligations that are narrow and proportionate: agreements that prohibit employees from working for competitors in the same or similar roles they have held with their previous employers, and where the nature of their work with new employers is likely to include either contact with the clients of the previous employer, or the use of the former employer`s confidential information. The courts review each non-compete obligation on a case-by-case basis, and what might be enforceable in one case may not be enforceable in another. Although there is still the possibility for employers to enter into enforceable non-compete obligations, such agreements must be drafted on a case-by-case basis for specific employees or groups of employees, and they must be closely tailored to the protection of the legitimate business interests of the company.