On May 25, 2019, Maryland enacted Senate Bill 328, “Labor & Employment – Non-compete and Conflict of Interest Clauses”. The bill essentially prohibits employers from entering into non-compete agreements with employees earning equal to or less than $31,200 annually or $15 per hour. The new bill makes Maryland the latest state to revise its non-compete laws.
The statute language is vague in certain areas. It fails to clarify if the law encompasses non-solicitation agreements and other restrictive covenants. However, it should be noted that the statute expressly excludes any employment contracts with respect to taking and using a client list or other private client-related information from its coverage. It also fails to indicate if the statute is applicable only post-employment. Accordingly, by its simple language, the statute would prohibit employers from forming anti-moonlighting agreements with lower wage employees.
The non-compete ban will go into effect on October 1, 2019. Employers who employ minimum wage and low-income employees will primarily be affected. Employers with workers earning at or near the minimum wage should pay close attention to Maryland’s new laws and contact Luchansky Millman for consultation to assist in amending policies.