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Employment Law

: Maryland Employment Law

Costs To Defend Against Alleged Non-Compete Violations Often Drive Employee Decisions (Even if the Agreement is Likely Unenforceable)

By James Rubin, Esq.

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I have reviewed many, many non-compete agreements over the course of my career. A very large portion of them are likely unenforceable under existing Maryland law. The agreements are overbroad, do not protect a legitimate business interest, purport to apply to an employee who cannot be covered, or contain terms that are presumptively unlawful. Employers often demand that low-wage employees sign obviously unenforceable non-compete agreements as a condition of employment. For example, the sandwich shop, Jimmy John's, required that many of its sandwich makers sign non-compete agreements (until it recently stopped this practice).

The costs to an employer of requiring non-compete agreements is nominal. The agreement becomes just another form to be signed. Many employees do not dwell on these forms -- often because they need the job.

But the costs to the employee can be great when he or she seeks to change jobs. The mere threat of lawsuit will often drive the employee to comply (and decline the job offer that he or she otherwise would have accepted). That is because the costs of defending one of these agreement can be expensive.

An employee faced with threatened enforcement of non-compete should contact a lawyer. There are ways to leverage your way out of such agreements.

Legislators have attempted to address this issue over the years. Already in the Legislative Session, Al Carr, introduced HB38 (link to fiscal note). It would render void non-compete agreements signed by employees making $15 per hour or less per hour or $31,200 or less per year.

If you are facing threatened enforcement of a non-compete agreement, you should review this post and reach out to an attorney.

Full post as published by Maryland Employment Law on January 14, 2019 (boomark / email).