Enforceability of Noncompete Agreements in Maryland
Noncompete agreements are contractual agreements that restrict an employee`s ability to work for a competitor or start a competing business after leaving their current employer. Many companies use noncompete agreements as a way to protect their trade secrets and confidential information. However, the enforceability of noncompete agreements varies from state to state. In Maryland, noncompete agreements are generally enforceable but have specific requirements.
Maryland follows the general rule that noncompete agreements are enforceable if they are reasonable in time and geographic scope. A noncompete agreement that is too broad in its restrictions may not be enforceable. For example, a noncompete agreement that restricts an employee from working in a particular industry nationwide for ten years is likely to be deemed unreasonable and unenforceable in Maryland.
In Maryland, noncompete agreements are also subject to the “blue pencil doctrine.” This means that if a court determines a noncompete agreement to be too broad, it may modify the agreement to make it reasonable and enforceable. For example, if a noncompete agreement prohibits an employee from working in a particular industry for five years in all of Maryland, a court may modify the agreement to restrict the employee from working only in a particular area of Maryland and for a shorter period.
Noncompete agreements in Maryland must also be supported by consideration. Consideration is something of value given in exchange for the employee`s agreement to the restrictions of the noncompete agreement. Consideration can be provided in the form of a signing bonus, stock options, or other benefits. Without consideration, the noncompete agreement may be deemed invalid.
It is also important to note that Maryland has a law that prohibits employers from requiring low-wage workers to sign noncompete agreements. The law defines low-wage workers as those earning equal to or less than $15 per hour or $31,200 annually. The law also prohibits employers from retaliating against employees who refuse to sign noncompete agreements.
In summary, noncompete agreements are generally enforceable in Maryland if they are reasonable in time and geographic scope, supported by consideration, and do not violate the law prohibiting low-wage workers from signing such agreements. If you are an employee in Maryland and are concerned about the enforceability of a noncompete agreement, it is advisable to consult an attorney.
