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Under MD law a non-compete agreement is enforceable ONLY if it is reasonably designed to protect a legitimate business interest of the employer. Thus, to be enforceable the agreement must be reasonable as to the scope of the interest being protected, the geographic scope and the time scope.
In Maryland, only two interests of the employer are considered protectable. But these interests are protected regardless of the method of termination
. See Hebb, III v. Stump, Harvey, and Cook, Inc., 334 A.2d at 569 (Md. App. 1975)(holding the non-competition clause “binding where the employee has ‘ceased’ to be employed”). The first employer interest protected is unfair competition by the former employee through misuse of trade secrets, customer routes, or client lists. The second instance when the courts will enforce a restrictive covenant is where the employee provided unique services. Millward v. Gerstung Int'l Sport Educ., Inc., 302 A.2d 14, 16 (Md. 1973).
Reasonable geographic scope is considered the area in which the company normally conducts business and as such this agreement would likely be found unenforceable outside of that radius.
Additionally, the maximum reasonable time is 2 years and as such, 3 years would be generally be found to be unenforceable unless they can show you were a key employee/owner of the company. See: Becker v. Bailey, 299 A.2d 835, 838 (Md. 1973).
Maryland courts employ the "blue-pencil" rule, which means that any part of a non-compete agreement they find unreasonable they can modify to make it reasonable. Holloway v. Faw, Casson & Co., 572 A.2d 510 (Md. 1990).
Thus, the terms of geographic scope and time are likely unreasonable here, but the court would generally modify the geographic scope and time scope under the blue pencil rule.
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