Enforceability of Non-Competition Agreements in Maryland

In general, non-competition agreements will be strictly construed against employers. These agreements must be as narrowly drafted as possible to protect the vital interests of the employer. If the agreement is too broad or vague, it is unlikely that a court will enforce the agreement.

When a non-competition agreement is challenged, Courts in Maryland will generally enforce the agreement only:

  1. Against an employee providing unique services.
  2. To prevent misuse of the employer’s:
    • established customer relationships;
    • trade secrets;
    • sales or delivery routes; or
    • customer or client lists.

In Maryland, Courts will also consider whether the employee is an unskilled worker whose services are not unique, whether the employee is exploiting close personal contact with the employer’s customers and whether the non-competition agreement is necessary to prevent misuse of the employer’s trade secrets and business information.

Courts will also review terms such as geographical limitation, time limitation, and scope of the limitation to determine reasonableness, and therefore enforceability. What is considered a reasonable time and geographic restriction in a non-compete depends on the specific facts of each case. However, in the past, Maryland courts have upheld non-competes with 2-year restrictions. Regarding geographic restrictions, courts will typically consider what the former employer’s territory encompasses.

Non-Competes are Prohibited for Low-Wage Workers

As of October 1, 2019, Maryland prohibits the use of non-competition agreements for employees who earn equal to or less than $15 per hour or $31,200 annually. Specifically, the law states: “A noncompete or conflict of interest provision in an employment contract or a similar document or agreement that restricts 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 shall be null and void as being against the public policy of the State.”

However, the law does not apply to agreements regarding the taking or use of a client list or other proprietary client-related information. Non-disclosure agreements protecting employer proprietary client information are still enforceable against these low-wage workers.

Our attorneys at General Counsel, P.C. have experience in walking the fine line of protecting a wide range of employer interests, while still remaining narrow enough to be enforceable.

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