By Ari Lichterman, Esq.
Employers in Maryland and Washington, D.C. face complex legal challenges. This guide explains key employment law concepts and how businesses can protect themselves.
When Is It Time to Go to Court? Enforcing Restrictive Covenants in Maryland
By: Ari Lichterman, Esq.
You took the right first step: you worked with counsel and required your employees to sign carefully drafted restrictive covenant agreements. That first step protects your business—on paper.
But when an employee leaves and you suspect they are violating the non-compete, non-solicitation, or confidentiality provisions, preparation alone is not enough. In Maryland, enforcement often requires swift action—sometimes in the form of an injunction to stop the misconduct before damage is done.
Effective enforcement generally involves three phases: (1) steps taken before departure; (2) careful evaluation of suspected conduct; and (3) pursuing legal remedies, including injunctive relief. Understanding these stages positions your business to act quickly and decisively when a covenant is threatened.
Before an Employee Departs:
Effective enforcement of a restrictive covenant ideally begins prior to the employee’s departure. During the departure process, employers should remind the employee of any continuing legal and contractual obligations, including non-compete, non-solicitation, and confidentiality provisions, that extend beyond separation. If a severance agreement is
offered, it should expressly reaffirm the restrictive covenants that survive termination, and employers may consider conditioning severance benefits upon continued adherence to the covenants. Employers should also use this opportunity to assess risk by learning about the employee’s future employment plans. Finally, to reduce the risk of losing clients, it is essential to engage in proactive communication with customers and other business partners to control the messaging and reinforce relationships.
Evaluating Suspected Conduct:
When an employer learns that a former employee may be violating a restrictive covenant, it should act promptly to investigate and assess the scope of the risk. A focused evaluation typically addresses the following core questions: What conduct is the former employee allegedly engaged in, and specifically how does it breach the covenant?
What evidence supports the suspected violation? What actual or imminent harm has resulted? Early involvement of experienced counsel is critical. If the employer ultimately seeks injunctive relief, courts will consider how quickly the company acted after learning of the misconduct. Delay can undermine both credibility and urgency.
misconduct. Delay can undermine both credibility and urgency. Taking Legal Action: After gathering the relevant facts, the employer must determine the appropriate course of action. Often, the first step is a cease-and-desist letter. A cease-and-desist letter reminds the former employee of their continuing obligations, may notify a new employer of those obligations, and typically demands that any unlawful conduct stop.
Cease-and-desist letters have many benefits, such as: Encouraging resolution without litigation Prompting a substantive response that clarifies facts or potential defenses Demonstrates prompt enforcement efforts preserves business relationships while asserting contractual rights In some circumstances, however, litigation may be necessary—either as a last resort or as an initial response if the harm is substantial. The decision to file suit should be made strategically and with counsel. Where a lawsuit can be filed, whether the jurisdiction and venue are favorable, and which state’s law governs are important legal considerations that can shape the likelihood of success. In addition, of course, the anticipated cost of litigation, the potential impact on customers or goodwill, and the risk and severity of ongoing harm are practical considerations that should inform the ultimate decision.
When litigation is pursued, employers typically seek both damages and injunctive relief. In most cases, however, the primary objective is an injunction is to immediately stop the violation and enforce the covenant. Injunctive relief generally takes three forms: Temporary Restraining Order (TRO) Preliminary Injunction Permanent Injunction.
To meet their evidentiary burden, employers need to present evidence to the court in the form of affidavits, testimony, and relevant documents. TROs and injunctions are considered “extraordinary remedies” and are not awarded easily because they ask the court to order a party to act or cease acting in a certain way without the benefit of a full evidentiary record. The more evidence you have to support the claims, the more likely it is the court will grant the injunction.
The court will look to see that the harm is not remote or speculative but is actual and imminent and cannot be recompensed through monetary damages later on. Evidence showing the loss of goodwill or trade secrets, which is difficult to quantify and remedy, can help to establish that an employer is suffering a loss that is irreparable.
Ultimately, restrictive covenants require more than preparation to effectively protect business interests. Whether through strategic negotiation or decisive litigation, Maryland employers should be prepared to act when a violation threatens their business. Swift evaluation and deliberate action can mean the difference between contained risk and lasting damage. Careful preparation lays the groundwork, but timely and strategic enforcement is what transforms contractual rights into real-world protection.
The attorneys at Luchansky Law are experienced in enforcing restrictive covenants—including noncompete agreements, non-solicitation agreements, and confidentiality agreements—to protect a company’s business interests. I would welcome the opportunity to discuss how to protect your business against unfair competition and enforce your covenants. For more information, call me at 410.522.1020, or email me at ari@luchanskylaw.com.
How Luchansky Law Can Help
Luchansky Law advises employers on compliance, risk mitigation, and litigation strategy. Contact us to protect your business and navigate employment law challenges effectively.
