Non-compete agreements were originally intended to prevent employees from unfairly taking specialized knowledge or skills learned from one employer and using that knowledge for the benefit of their direct competitors. However, employers often abuse such agreements and require employees to sign non-compete agreements that are overly restrictive and unfairly limit their ability to find future employment.
In Maryland, non-compete agreements are enforceable if the agreements are reasonable. However, if the scope, terms and/or duration are unreasonable, or the non-compete agreement causes an undue hardship on the employee, the agreement may be unenforceable.
Maryland also has specific restrictions on which employees may be subject to non-compete agreements. On May 28, 2019, the Non-Compete and Conflict of Interest Clauses Act became law in Maryland. The law, which went into effect on October 1, 2019, prevents employers from entering into non-compete agreements with employees who earn $15 per hour or less or $31,000 annually.
Under the new law, agreements that are the subject to the act are those “that restrict the ability of an employee to enter into employment with a new employer or to become self-employed in the same or similar business or trade ... .” The law does not limit the restrictions to those that only limit an employee after they leave employment. Therefore, the law likely bans restrictions on moonlighting or side work as well.
Restricted non-compete agreements entered into prior to October 1, 2019 became null and void as of that date. Also, although some non-compete agreements are enforceable, others are not.
If your employer is requiring you to sign a non-compete agreement or is trying to enforce an agreement that you signed, the attorneys at Lebau & Neuworth LLC may be able to help. We are experienced in dealing with non-compete agreements and other employment related contracts such as these. For more information contact us (410) 296-3030 or lebauneuworth.com/contact-us.
