The 5 Most Commons Causes of Non-Compete Agreement Violations in Maryland

It is not uncommon for employment contracts to contain a provision called a non-compete agreement. Non-compete agreements are legal promises not to compete with a former employer for a reasonable length of time and within geographic limitations. After an employee leaves a company, it can be easy to feel free or “off the hook” from agreements with a former employer. This becomes problematic when a former employer becomes aware of the violation and pursues a legal cause of action against the employee. The Baltimore restrictive covenant attorneys at the Heyman Law Firm discuss common ways former employees breach their non-compete agreements with employers…

What is a Non-compete Agreement?

Non-compete agreements are typically designed to prevent employees from using knowledge acquired at former places of employment to their advantage at their subsequent business endeavors. A non-compete agreement will be enforced if a court finds:

• Adequate consideration to support the contract;
• The agreement was ancillary to the employment contract;
• Limited in geographic scope and duration; and
• The agreement does not impose an undue hardship on the employee and it is not against public policy

Maryland follows the “blue pencil doctrine” in its flexible approach to employers who fight to defend their noncompete agreements with former employees. Under this rule, a noncompete agreement may be enforced even if a court finds that part of it is voidable. The court will simply strike out the unenforceable provision so long as it is severable and does not have to be rewritten or supplemented.

Common Causes of Non-compete Agreement Violations

Non-compete agreements can be breached in a number of ways depending on the facts and circumstances surrounding the employment contract. Below is a list of common non-compete agreement violations:

• A former employee is hired by a competing business within the geographical limitation designated by the agreement
• A former employee provides trade secrets to a competitor
• A former employee is hired by a competing business and joins the company before the time limitation on employment has expired
• A former employee solicited customers from the former employer
• A former employee discloses confidential information from a former employer to a competitor

Violations of non-compete agreements can be extremely detrimental to former employers. When trade secrets are disclosed and customers are solicited, companies can potentially lose millions of dollars in profits. In order to protect a company’s interests, it is crucial that its non-compete agreements are well-written and enforceable. Retaining an experienced Baltimore trade secret attorney is essential to drafting restrictive covenants that are not overly broad and that are supported by ample consideration so that they can be enforced.

What are the Legal Remedies for a Breach of a Non-compete Agreement?

When a former employer has breached the terms of a non-compete agreement, employers have the option of filing a motion for a preliminary injunction to enforce the agreement. A judge will grant a preliminary injunction if an employer shows:

1. There is a likelihood of success on the merits;
2. The employer will suffer irreparable harm if the injunction is not granted;
3. The employee will not suffer additional harm if the injunction is granted; and
4. Granting the injunction would not be against public policy

If a temporary restraining order is granted, a judge may choose to make the order permanent. Former employers also have the option of seeking damages for any harm suffered as a result of the breach of the non-compete agreement. The type of damages that are available for former employers will depend on the facts of the case. The employer has the burden of proof to show what damages are owed. Courts may choose to award compensatory damages or liquidated damages.

Baltimore Restrictive Covenant Attorneys

Although many courts do not favor overly restrictive non-compete agreements, a judge will still enforce one if it is tailored to protect a company’s legitimate business interests. Non-compete agreements are most prevalent in IT and engineering occupations, but they are not limited to these areas of work. When an employer has provided employees with training and a skillset and knowledge of unique information, it is not unreasonable to want to guard that from competing businesses. The Baltimore non-compete lawsuit attorneys at the Heyman Law Firm understand the legal concerns that businesses face, and they are here to provide sound guidance so that your business can succeed.  The firm also advises employees subject to non-compete agreements who are seeking advice about structuring their departure, or, facing a lawsuit from their former employer for violating their agreement.

If you or your company are interested in drafting a non-compete agreement, are dealing with a former employee’s violation of the agreement, or if you are a former employee being sued or potentially being sued for breaching your agreement, call the Heyman Law Firm today. Hiring a Maryland business advisory attorney to draft a narrowly drawn agreement can save your business time and money in the future. Hiring a business litigation attorney can protect your or your company’s interests and assure the best outcome.  Call the Heyman Law Firm today at (410) 305-9287 to schedule a confidential consultation with an attorney you can trust to protect your legal rights.