Are Employment Non-Competition Agreements Enforceable in Maryland?

Have you heard someone tell you that a “non-compete” provision in a contract is not worth the paper it’s printed on.  In Maryland, as in most states, that off the cuff legal advice would be wrong.  While business owners and managers in the state must proceed carefully to ensure that any non-competition clause in an employment contract actually provides the protection the company assumes it will provide, a properly drafted clause will protect the employer under most circumstances..

William Heyman and the Law Firm of Willian S. Heyman can provide meticulous step-by-step guidance for businesses seeking non-competition clause guidance. Mr. Heyman can put his more than 20 years of practical legal experience to work for your company by drafting or reviewing your company’s employment contracts, non-competition clauses, and the process utilized when an employee signs an agreement prohibiting her from engaging in competition in the future. If you are already facing a dispute or litigation over a non-compete clause, Mr. Heyman is  able to advocate your  position and, if necessary, aggressively litigate on you or your company’s behalf. To schedule a confidential legal consultation with a Baltimore business litigation lawyer, call the Law Firm of William S. Heyman today at (410) 305-9287.

What Employer Interests Can be Protected by a Non-Compete in Maryland?   

In Maryland, there are generally two employer interests that are protectable through a restrictive employment covenant. First, Maryland law protects an employer from unfair competition by a former employee. Under this prong, an employee is generally prohibited from utilizing trade secrets, such as customer lists or known customer routes, following the end of an employment relationship. Provided that the individual has signed a valid and enforceable non-compete agreement, the agreement is enforceable regardless of whether the termination was voluntary or involuntary. Hebb, III v. Stump, Harvey, & Cook, Inc., 334 A.2d at 569 (Md. App. 1975).

The second protectable interest held by an employer when a valid restrictive covenant is executed is when an employee provided unique services to the employer. Millward v. Gerstung Int’l Sport Education, Inc. 302 A.2d 14, 16 (Md. 1973). In Millward, a former professional soccer coach left employment with Gerstung to start his own competing training program. The coach, Millward, had signed a non-compete that prohibited direct or indirect competition in in a same or similar business and restricted Millward’s ability to solicit Gerstung’s clients. The program developed by the coach was designed to confuse these clients and draw their business away from his former employer. The courts upheld the non-compete agreement on the basis of the coach’s unique “reputation and qualifications.”

When Will A Court Enforce a Non-Compete Agreement?

When the employer has a protectable interest due to the conversion of a trade secret or the employee’s unique reputation or qualification, certain additional requirements must be met for a court to enforce the agreement. Generally, four elements must be met by the agreement and the process by which the employee accepted the terms of the restrictive covenant.

First, the non-compete must be supported by adequate consideration. This means that the employee received something of value in exchange for signing the non-compete agreement. Second, the non-compete must be “ancillary” to the employment contract. A non-compete is ancillary to the agreement when it is necessary to support the goals of the employment agreement. Third, the restrictive covenant must be limited and reasonable in geography and duration. Speaking generally, a court is more likely to upheld a narrowly construed agreement than a broadly construed one. However, an employer must balance concerns regarding enforceability with the interests to be protected. Finally, a court will also consider public policy reasons prior to enforcing a non-compete agreement. The court will assess whether the restrictive covenant is likely to impose an undue hardship on the employee and other public policy concerns.

Work with a Strategic Baltimore Employment Lawyer

The above sets forth some of the common concerns and considerations that are essential in any assessment of a restrictive employment agreement. However, these concerns merely serve as a starting point for an inquiry and the unique facts and circumstances present in a matter must be fully assessed before any legal advice can be provided.

Baltimore business attorney William Heyman can put hisbusiness law and commercial litigation experience to work for your firm. To schedule a confidential consultation at the Law Firm of William S. Heyman, call (410) 305-9287 or contact the firm online.