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Non-Competes Stink but Can Be Enforced In Maryland

A recent New York Times article entitled “How Non-compete Clauses Keep Workers Locked In” reminded me just how unfair non-complete contract clauses are and how inconsistent they are to the so-called “free-market.” Indeed, Maryland employers can condition employment on an employee agreeing to a non-compete and/or non-solicitation provision (also called a “restrictive covenant”).

In Maryland, non-competes and non-solicitation provisions can be enforced. However, a Maryland court will not enforce every non-compete and/or non-solicitation agreement. To be enforced: (1) adequate consideration must be present; (2) the restraints are limited in geographic scope and duration to what is reasonably necessary to protect the employer’s business; (3) they do not impose undue hardship on the employees; and (4) they are not against the public interest.

Lebau & Neuworth can provide countless examples in which a client was subject to a clearly overly broad and unduly burdensome restrictive covenant, but still a potential new employer would not hire him or her because the employer did not want to be dragged into litigation. On some occasions, we have been able to negotiate on behalf of our clients with their employers to narrow the scope of the non-compete or non-solicitation provision, allowing our clients to accept new employment, while, providing assurances to the former employer that certain clients or customers will not be contacted and/or solicited. We also have been able to successfully negotiate for severance pay during the term -- or at least part of the term -- of the non-compete and/or non-solicitation agreement.

There is no doubt that restrictive covenants are one-sided to the employer’ great advantage. So, not entering into such agreements is the best option. However, if that is not possible, then we suggest you contact counsel who is extremely knowledgeable on this subject to provide necessary advice and suggestions.

If you need assitance with a non-complete contract, please contact Lebau & Neuworth at 888-456-2529 or lebauneuworth.com/contact-us.

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