Do you have a Noncompete Agreement with your current employer and do not know how to get out of it? A Noncompete Agreement is meant to protect an employer from having an employee “steal” its clients or its proprietary business knowledge when the employee leaves. A Noncompete Agreement will generally restrict the employee from working in a particular area for a number of years and/or restrict the employee from taking a job in the same position. What do you do if you want to leave your employer or maybe even start your own business? Sure, one option may be to move to an entirely different state or just take a completely different position. However, these may not be viable options and we’re here to help you figure it out!

In Maryland, Noncompete Agreements (“NCAs”) are governed by the MD Code, Labor and Employment, § 3-716. Section 2(b) references a public policy argument:

A non-compete or conflict of interest provision in an employment contract or a similar document or agreement that restricts the ability of an employee to enter into employment with a new employer or to become self-employed in the same or similar business or trade shall be null and void as being against the public policy of the State.

The above language is promising – NCAs can be considered null and void if they are against public policy. However, employers can generally enforce an NCA so long as the agreement is not overly restrictive. For example, if the geography and time limitations of the NCA are reasonable and do not impose undue hardship on the employee. Furthermore, in Maryland, restrictive covenants in employment contracts may be applied only to those employees who provide unique services or to prevent future misuse of trade secrets, routes, lists of clients, or solicitation of customers.

When a covenant not to compete is reasonable on its face as to both length and geography, courts will generally evaluate the following factors to determine whether to enforce the NCA:

·         whether the employee sought to be enjoined is an unskilled worker whose services are not unique;

·         whether the covenant is necessary to prevent the solicitation of customers or the use of trade secrets, assigned routes, or private customer lists;

·         whether there is an exploitation of personal contacts between the employee and customer; and

·         whether enforcement of the cause would impose an undue hardship on the employee or disregard the interests of the public.

It appears that when courts find either the length or geography too vast, they will redraft the boundaries to reasonable lengths and periods. A restrictive covenant will likely not be enforced if, under all the circumstances, the covenant is unduly restrictive of the employee’s freedom.

So the questions you may want to ask yourself are: 1) Do I provide unique services to my employer? 2) Do I have access to trade secrets, customers lists or routes that your employer may consider to be a protected interest? Although enforcement of Noncompete Agreements is factually based, Maryland courts typically look at the NCAs and evaluate whether the employer uses the Noncompete Agreement as punishment against its employee for working with a competitor/becoming a competitor (if you open your own shop) or is the NCA used to compensate the employer for damages for the loss of business. If it’s the latter, the NCA will likely stand up in court and the employee can face some serious damages.

The best option may be to simply ask your employer for a written waiver of the Noncompete Agreement. It may be an uncomfortable conversation, but it’s a safer option than possibly getting sued if you decide to take another job or open your own business. Please call Essential Legal Planning to discuss your employment options, including helping you draft a waiver of your Noncompete Agreement. We are licensed in MD, VA and DC, and can help you navigate through the laws in any of these jurisdictions.