The Maryland Law on Non-Compete Agreements

Maryland's law on noncompete agreements is found under general contract law and the common law, which flows from court decisions. Consequently, Maryland law on noncompete agreements is governed by court decisions.

Definition

In Maryland, a noncompete agreement is a contract between an employer and an employee, in which the employee agrees not to compete against the employer when he leaves that particular job. Not only does the agreement govern future employment, it also prevents the employee from opening a business that competes against the former employer.

Purpose

A noncompete agreement prevents a person from gaining an unfair advantage over his former employer. Employers invest money and resources in training employees and expose them to sensitive information about the company's business. An employer, therefore, stands to lose that investment and may face the possibility of a former employee gaining an unfair advantage by using privileged or sensitive information against the former employer.

Requirements

Maryland courts have upheld noncompete agreements, requiring that they be drafted to protect identifiable business interests, such as trademarks and trade secrets, and that such contracts be limited in geographical area and duration. Rather than establish firm rules on these matters, though, Maryland courts tend to take a case-by-case approach.

References

• Law Office of Stuart L. Plotnick: Non-Compete Agreements