An FTC proposal to ban noncompete agreements may face an uncertain future, but one thing is increasingly clear: The use of noncompetes is increasingly under challenge and must be managed by employers to comport with a shifting legal landscape, two veteran employment attorneys say.
Kirsten Eriksson and Veronica D. Jackson, principals with Miles & Stockbridge, made those observations last week in a Daily Record webinar “Noncompete Agreements: What Employers Should Know.”
“Maryland generally has the same standard as virtually every other state that allows noncompetes in the sense that they are supposedly somewhat disfavored but permitted if required to protect a legitimate business interest of the employer,” Eriksson said.
Valid business interests include customer goodwill and/or confidential information. Maryland law
prohibits the use of noncompetes for low-wage employees, those who earn no more than $15 an hour or $31,200 per year.
The standards an employer needs to observe when drafting a noncompete agreement vary.
“Different states have different standards for noncompetes, so the first step an employer should consider is where that employee will be located to guide what state law is applicable,” Jackson said. “Depending on the state, except for the states that outright ban them, an employer should be sure to narrowly craft a noncompete to be reasonable in scope and crafted to protect an employer’s actual legitimate business interest.”
Some of the problems Eriksson...
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