The courts also require that a non-competition clause be appropriate with respect to the extent to which it prevents a former worker from competing with his former employer. As with the permanent restriction, Maryland courts consider whether the former employee`s geographic restriction in assessing the enforceable non-compete clause is appropriate. Probably, although the Maryland courts have suggested that if an employee is fired for a reason that is not the employee`s fault, the court may not enforce the non-compete agreement on the employee if he believes the dismissal is unfair. Maryland is not the only state trying to limit the scope of applicable competition bans. On June 28, 2019, Maine passed a new law that overturns non-compete bans for any worker earning less than 400 percent of the federal poverty line – nearly $50,000 in 2019. Similarly, on July 10, 2019, New Hampshire adopted a restriction on competition for low-wage workers earning less than $24,280 a year. And Rhode Island also joined the chorus in 2019 and passed a law limiting competition restrictions for workers whose annual wages are less than 250% of the federal poverty line. Other states, such as Utah, Idaho, California and Illinois, already have laws that limit the application of non-compete agreements to varying degrees. And lawmakers in other states have made similar attempts to limit non-compete bans, including Virginia and New Jersey. But so far, they have done nothing in the law. However, if the court finds, under the Blue Pencil Act, that certain provisions of your non-competition clause are inoperative or inappropriate, the court may decide to make these arrangements, while the rest of the contract remains intact. Once the impugned provisions have been made, the Tribunal will determine whether the no-competition agreement is still applicable and valid. On May 28, 2019, the Noncompete and Conflict of Interest Clauses Clauses (NCICA) ended.
The core of the new law is that non-competition prohibitions automatically apply to an employee earning $31,200 a year or $15 an hour. NCICA should not apply to higher-paying positions where the use of non-competition agreements is more likely to be used as originally planned. In recent years, employee-friendly reforms of the non-compete clause have been a priority for many state legislators, with the introduction of sick, security and family leave laws and the passage of laws prohibiting criminal history claims on application forms for many workers in the country. In addition to the actions taken by many state legislators, attorneys general have also reviewed non-compete agreements in many states that are akin to non-competition agreements. In July 2018, attorneys general in 11 states announced that they were investigating several high-end fast food chains because of the use of non-discrimination or non-compete agreements that limit the ability of low-wage workers to get better-paying jobs with another franchise. Illinois Attorney General Lisa Madigan said: “Non-poach agreements capture workers in low-wage jobs and limit their ability to access higher positions within the same restaurant chain.” The Illinois attorney`s office said in a statement that 58 percent of large franchisees do not have poaching rules in their franchise agreements, while 80 percent of fast food franchisors use the deals. This case is important to staff because it reminds us that not all non-competition agreements are applicable. The information below is intended to help employees understand how Maryland courts have analyzed non-compete rules between workers and employers. As you may have guessed, the courts analyze these non-competition agreements in a factual way.