Non Compete Agreement in Employee Contracts:
What you Need to Know
As a business owner you want to hire the best people and help them grow. But what happens when they decide to move on? You need to protect any sensitive business information or competitive advantage your former employees may have learned while under your employ. The State of Maryland allows certain limitations and restrictions on most industries and many types of employees that may possess sensitive information of the business in the form of non-compete agreement or clauses in employee contracts. These clauses can be very beneficial to employers, but certain considerations for the employee are legally required.
- Adequate Consideration: Initial hiring, a bonus, pay raise, or promotion all qualify as adequate consideration to include a non-compete clause.
- Reasonably Necessary to Protect Important Business Interests: If your employee’s responsibilities include fostering goodwill and relationships with clients, a non-compete clause can ensure your employee will not take clients with them if they decide to leave your business.
- Undue Hardship: A non-compete clause cannot place undue hardship on an employee as compliance with the agreement. For instance, requiring a former employee to give up their pension in order to seek employment with a competitor is considered undue hardship.
Without a non compete agreement or clause, you could potentially end up with former employees becoming competitors in the same market. A lawyer with experience drafting employer-employee contracts will be able to ensure a non-compete clause that protects you and your business, while ensuring it is in compliance with the state’s standards.
Contact The Law Offices of Kirk Halpin & Associates, P.A. Today
Practicing together in Howard County since 2004 – first in Columbia and now in Clarksville, The Law Offices of Kirk Halpin & Associates, P.A., is here to help with a variety of business, real estate and finance law issues. We have a long list of practice areas, a long list of industries served, and a long list of success stories and recommendations in helping businesses, no matter the size, grow, reach their goals, and surpass them. If you’re seeking counsel on a business, real estate or finance law issue, always feel free to contact us via our contact page or call us at (410) 531-1700. While you are here, remember to follow us on Facebook, Twitter, Google+, and LinkedIn to stay up to date with our blog and the latest happenings at our firm.