Non-competition agreements, commonly referred to as non-competes, are legal agreements designed to restrict employees or former employees from competing with their employer`s business for a certain period of time. They are often used to protect an employer`s trade secrets, client relationships, and confidential information.
In Maryland, non-competes are enforceable under certain circumstances, but their validity is subject to strict scrutiny. The state`s public policy favors free competition and encourages the mobility of labor. Therefore, non-competes must be carefully drafted and limited in scope to be enforceable.
Maryland law requires non-competes to be reasonable in duration, geographic scope, and the type of activity restricted. A non-compete that is too broad in any of these areas is likely to be deemed unenforceable. For example, a non-compete that prohibits an employee from working in the same industry anywhere in the world for an indefinite period is unlikely to be upheld.
In addition to these requirements, Maryland employers must offer their employees something of value in exchange for signing a non-compete. This can include access to trade secrets or confidential information, additional compensation, or a promotion. Failure to provide any consideration can render the non-compete unenforceable.
Furthermore, non-competes in Maryland cannot be applied to all employees. They are generally reserved for those in high-level positions with access to sensitive information or clients. Additionally, non-competes cannot be used to prevent an employee from earning a livelihood or pursuing their chosen profession.
Maryland employers should be aware that non-compete agreements are subject to legal challenges and should be prepared to defend them in court if necessary. Additionally, they should consult with legal counsel to ensure their non-competes comply with Maryland law and protect their legitimate business interests.
In conclusion, non-competes can be a useful tool for Maryland employers to protect their business interests, but they must be carefully drafted and limited in scope. Employers should offer adequate consideration to employees and consult with legal counsel to ensure their non-competes are enforceable. Employees should also be aware of their rights and consult with legal counsel if they believe a non-compete is unfair or overly restrictive.