Quick Hit: Effective October 1, 2019, Maryland law prohibits the use of non-competition agreements for employees with wages equal to or less than $15 per hour or $31,200 annually.

Key Takeaway:  Maryland employers, and employers with employees who work in Maryland, that utilize non-competition agreements for covered employees should be aware that such agreements are no longer enforceable in Maryland, but that non-disclosure agreements protecting proprietary information remain enforceable for such employees.  Affected employers should examine their restrictive covenant practices to ensure the law does not create competitive risks and, if so, consider ways to mitigate those risks such as changing low-wage employee access to information or increasing covered employees’ pay.

More Detail:

The Maryland law declares any “noncompete 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 null and void as being against public policy of the State.”  The law specifically provides that its prohibition on non-competition agreements does not extend to “employment contract[s] or similar document[s] or agreement[s] with respect to the taking or use of a client list or other proprietary client-related information.”  The law is silent on the subject of agreements not to solicit customers or employees.

In enacting this legislation, Maryland has joined a growing national trend.  In recent years several other states, including Illinois, Maine, Massachusetts, New Hampshire, Oregon, Rhode Island and Washington, have passed laws restricting the use of non-competition agreements against low-wage employees.  In addition, state attorneys general have engaged in efforts to invalidate non-competition agreements against low-wage employees by bringing suits against individual employers.

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Photo of Guy Brenner Guy Brenner

Guy Brenner is a partner in the Labor & Employment Law Department and leads the Firm’s Washington, D.C. Labor & Employment practice. He is head of the Government Contractor Compliance Group, co-head of the Counseling, Training & Pay Equity Group and a member…

Guy Brenner is a partner in the Labor & Employment Law Department and leads the Firm’s Washington, D.C. Labor & Employment practice. He is head of the Government Contractor Compliance Group, co-head of the Counseling, Training & Pay Equity Group and a member of the Restrictive Covenants, Trade Secrets & Unfair Competition Group. He has extensive experience representing employers in both single-plaintiff and class action matters, as well as in arbitration proceedings. He also regularly assists federal government contractors with the many special employment-related compliance challenges they face.

Guy represents employers in all aspects of employment and labor litigation and counseling, with an emphasis on non-compete and trade secrets issues, medical and disability leave matters, employee/independent contractor classification issues, and the investigation and litigation of whistleblower claims. He assists employers in negotiating and drafting executive agreements and employee mobility agreements, including non-competition, non-solicit and non-disclosure agreements, and also conducts and supervises internal investigations. He also regularly advises clients on pay equity matters, including privileged pay equity analyses.

Guy advises federal government contractors and subcontractors all aspects of Office of Federal Contract Compliance Programs (OFCCP) regulations and requirements, including preparing affirmative action plans, responding to desk audits, and managing on-site audits.

Guy is a former clerk to Judge Colleen Kollar-Kotelly of the US District Court of the District of Columbia.