Maryland Non-Compete Agreements: What Employees Need to Know

You’re offered a new job, and you are thrilled about it. Because you can’t wait to begin, you probably won’t want to slow down to read all of the terms of your offer, or all of the paperwork that you’re asked to sign. However, if your future employer wants you to sign a non-compete agreement as a term of your employment, consider putting on the brakes and giving it careful consideration.

Q. What’s required for a non-compete to be valid?

In Maryland, to be enforceable, non-compete agreements must:

  • Be supported by adequate consideration,
  • Be ancillary to a general employment contract,
  • Be limited in geographic area and duration only in a way that is reasonably necessary for the employer’s protection, and;
  • Must not impose an undue hardship on the worker, or violate public policy. (See Becker v. Bailey, 299 A.2d 835, 838 (Md. 1973).

Q. Which interests may an employer protect with non-compete agreements?

There are only two reasons that a Maryland employer may require an employee to sign a non-compete. Those two interests are:

  1. Unfair competition from former employees (e.g. preventing former employees from using trade-secret information, or profiting from valuable customer or leads lists.)
  2. When the employee provided unique services to the employer. For example, In the 1973 case Millward v. Gerstung Int’l Sport Educ., Inc., a well-known soccer coach left his job as Gerstung’s camp director to start his own, competing soccer camp. The Millward Court found that consumers would be confused into thinking the new camp was Gerstung’s, and that it was reasonably necessary for Gerstung’s to protect their business. The Court emphasized that Coach Millward’s “reputation and qualifications” were a direct reason for the success of Gerstung’s program. (See Millward v. Gerstung Int’l Sport Educ., Inc., 302 A.2d 14, 16 (Md. 1973)).

Q. What’s the “Blue-Pencil Law”?

Maryland follows the “blue-pencil” doctrine, which means that the courts may “blue-pencil” any problematic provisions of a non-compete agreement without rendering the entire instrument void. Under common law, if a restrictive covenant had a provision that was invalid for reason of law or mistake, the agreement was not valid. The blue-pencil doctrine is considered employer-friendly, so employees must read and understand their agreements fully, knowing that the intent of the employer is likely to be followed by the court.

Q. What can my employer do if they catch me breaking my non-compete agreement?

When enforcing non-compete agreements, Maryland employers may seek:

  • Preliminary and permanent injunctions
  • Damages
  • Liquidated Damages, if such a remedy was outlined in the non-compete agreement.

Don’t risk your future and livelihood by signing a non-compete agreement that may place your future on serious hold. Before you sign, contact the knowledgeable Baltimore employment lawyers at The Law Firm of J.W. Stafford, L.L.C. to discuss your agreement. Ensuring that your employer follows the legal requirements for a non-compete may save you from devastating unemployment down the road.

Learn More from a Non-Compete Attorney

If you have questions about a your rights, please view our in-depth guide to non-compete agreements. We encourage you to to contact experienced Baltimore employment lawyer Jamaal (“Jay”) W. Stafford to talk about your options or call us at (410) 514-6099. We are here to help ensure that your employer gives you all of the rights that you deserve.

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Written by Law Firm of J.W. Stafford, L.L.C.

Attorney Jamaal (“Jay”) W. Stafford has extensive experience counseling and representing clients facing complex and challenging legal issues. He puts his experience to work with each client to help them get their desired results, no matter what legal situation they are facing. Each service that is offered is backed by his experience, education, professional training, and passion for employment law and litigation.