Maryland Restrictive Covenant Attorney

Restrictive covenants or contracts are a tool that an employer can use to help protect its investments in its personnel or protect its client or customer relationships in Maryland, the District of Columbia, Virginia, and beyond

Types of Restrictive Covenants

Restrictive covenants generally fall into three categories:

1. Non-Solicitation Agreements
2. Non-Compete Agreements
3. Confidentiality agreements

While useful, restrictive covenants are increasingly under scrutiny, so they must be drafted carefully, with strong consideration given to balancing existing law and enforceability with the needs and interests of the company.

At Lerch Early, we work with clients to create customized agreements and strategize what types of agreements and restrictions are appropriate. It is important to note that the rules can vary from jurisdiction to jurisdiction, and the rules are ever-changing.

Covenants Not to Compete

When permitted by law and carefully drafted, non-compete agreements can help protect market share, intellectual property (IP), and investments in staff and client or customer relationships by preventing key employees with intimate knowledge of the ins and outs of the company’s business from going to work for a direct competitor.

Clients/Customer Non-Solicitation Agreements

Non-solicitation agreements can be used to protect client and customer relationships. Specifically, they can prevent an employee who leaves for a competitor or goes out on their own from using the relationships they formed while on the company’s payroll to redirect clients or customers and business away from the company.

Employee Non-Solicitation Agreements

Non-solicitation agreements can serve two purposes:

1. Protect the employee, and
2. Protect client relationships

Contracts prohibiting the solicitation of the company’s employees are particularly useful in a job market where it is difficult to recruit and retain talent. Employee non-solicitation agreements can ensure that a departing employee cannot recruit or draw away other talent from the company. Non-solicitation agreements can also be used to prohibit a departing employee from diverting existing customers from the business.

Agreements to Protect Confidential Information and Trade Secrets

Non-disclosure agreements protect against the disclosure of non-public confidential or proprietary information that derives value from staying secret. Examples of this information include, but are not limited to: price lists, procedures, code, and marketing and financial information. These are also important agreements for clients in a regulated area, for example, where HIPAA or financial regulations might be in play, to require enhanced protections for patient, customer, or client information.

What to Know About Restrictive Covenants in Maryland, the District of Columbia, and Virginia

Restrictive covenants may vary from jurisdiction to jurisdiction. Employers should consult an attorney before implementing a restrictive covenant or an employment agreement containing restrictive covenants, especially if there are multiple jurisdictions involved.

Maryland, the District of Columbia, and Virginia each have their own laws limiting the use of restrictive covenants to varying degrees. Even where a restrictive covenant is lawful in principle, in order for it to be enforceable, it’s critical that it is narrowly drafted, the restrictions are reasonable based on the nature and duties of the individual position, and it is tied to protecting the legitimate business interests of the company.

The “Blue Pencil” Doctrine

Simply put, the blue pencil doctrine means a court can revise a restrictive covenant that it determines is too broad. In the D.C. Metro Area, the “blue pencil” laws vary by jurisdiction as to whether and how a court will modify a restrictive covenant into enforceability or, potentially, toss it out.

The Role of a Maryland Restrictive Covenant Attorney

Restrictive covenants can be powerful tools to help employers to achieve their business goals, but to be effective, they must be narrowly drafted/tailored and comply with applicable laws. Lerch Early’s employment attorneys have deep experience in tailoring these agreements to our clients’ needs while staying up to date on the most recent changes in the law.

Reach Out to a Lerch Early & Brewer Maryland Restrictive Covenant Attorney

Contact a Lerch, Early & Brewer employment attorney if you are considering using a restrictive covenant, need one reviewed, or for any other related needs.