In the latest Weekly Wright Report:
New Law to Affect Employment Non-compete and Conflict of Interest Provisions
SB 591 was passed by the Maryland Legislature in the 2023 session and has been approved by the Governor. The Bill alters the application of the prohibition on including a non-compete or conflict of interest provision in an employment contract. The Bill is scheduled to become effective on October 1, 2023. Under current Maryland law, for an employee who earns equal to or less than $15.00 per hour or $31,200 annually, a non-compete or conflict of interest provision in an employment contract or a similar document or agreement that restricts the ability of an employee to enter into employment with a new employer or to become self-employed in the same or similar business or trade is null and void as being against the public policy of the State. Such non-compete and conflict of interest provisions are null and void whether or not the employer and employee entered into the employment contract or similar document or agreement in the State.
The Bill increases the amount that an employee must earn in order for a non-compete or conflict of interest provision in an employment contract to be permissible under State law. Under the Bill, the threshold will now be set at more than 150% of the State minimum wage rate. In other words the applicability of the prohibition has been broadened to include more employees. If you have any questions regarding this new law, please contact any member of the WCS Labor and Employment practice group.