EMPLOYEE NON-COMPETE AGREEMENT

(Maryland – Comprehensive Template)

TABLE OF CONTENTS

1. Document Header................................................................. 2
2. Definitions..................................................................... 3
3. Operative Provisions............................................................ 5
4. Representations & Warranties.................................................... 7
5. Covenants & Restrictions........................................................ 8
6. Default & Remedies.............................................................. 9
7. Risk Allocation................................................................ 10
8. Dispute Resolution............................................................. 11
9. General Provisions............................................................. 12
10. Execution Block................................................................ 14

[// GUIDANCE: Page numbers are illustrative. Remove or auto-update if you convert to Word/PDF.]

1. DOCUMENT HEADER

1.1 Title and Parties
This Employee Non-Compete Agreement (“Agreement”) is entered into by and between [EMPLOYER LEGAL NAME], a [STATE OF INCORPORATION] [ENTITY TYPE] having its principal place of business at [EMPLOYER ADDRESS] (“Employer”), and [EMPLOYEE NAME], residing at [EMPLOYEE ADDRESS] (“Employee,” and together with Employer, the “Parties,” and each a “Party”).

1.2 Effective Date
This Agreement is effective as of [EFFECTIVE DATE] (“Effective Date”).

1.3 Recitals
A. Employer is engaged in the Business (as defined below) and has developed valuable Confidential Information and goodwill.
B. Employee’s position will provide access to Confidential Information and relationships critical to Employer’s competitive position.
C. Employer desires to protect its legitimate business interests and Employee is willing to accept reasonable restrictions in exchange for the consideration described herein.
D. The Parties therefore agree as follows:

2. DEFINITIONS

For purposes of this Agreement, the following capitalized terms have the meanings set forth below. Terms defined in the singular include the plural and vice-versa.

“A. Business” – The products, services, and lines of business in which Employer is engaged as of the Effective Date or during Employee’s employment, including but not limited to [DESCRIBE BUSINESS].

“B. Competing Business” – Any person or entity that develops, markets, sells, or provides products or services that are the same as or substantially similar to the Business within the Restricted Territory.

“C. Confidential Information” – All non-public information of Employer, whether oral, written, electronic, or otherwise, including Trade Secrets, technical data, know-how, financial information, marketing plans, and customer lists, that Employee learns or obtains in connection with employment.

“D. Customer” – Any person or entity:
(i) who purchased products or services from Employer during the twelve (12) months preceding the Termination Date; or
(ii) with whom Employer was actively soliciting business during such period.

“E. Restricted Period” – The period beginning on the Termination Date and continuing for [NUMBER] months thereafter.
[// GUIDANCE: Under Maryland law, 12–24 months is commonly enforced when tied to protectable interests.]

“F. Restricted Territory” – [DESCRIBE GEOGRAPHIC SCOPE].
[// GUIDANCE: Narrowly tailor to the territory in which Employee actually worked or had material influence. Multi-state or global restrictions are disfavored.]

“G. Services” – The duties Employee performed for Employer at any time during the last twelve (12) months of employment, including [POSITION-SPECIFIC DUTIES].

“H. Termination Date” – The last date of Employee’s employment with Employer for any reason.

“I. Trade Secrets” – Information meeting the definition of “trade secret” under Md. Code Ann., Com. Law § 11-1201 (e), as amended.

3. OPERATIVE PROVISIONS

3.1 Consideration
As consideration for the covenants herein, Employer shall provide Employee with:
(a) continued at-will employment;
(b) a one-time payment of $[AMOUNT]; and
(c) access to Confidential Information.
Employee acknowledges the sufficiency of such consideration and that Employee’s annual compensation exceeds the threshold set forth in Md. Code Ann., Lab. & Empl. § 3-716.

3.2 Non-Competition Covenant
During the Restricted Period, Employee shall not, within the Restricted Territory, directly or indirectly:
(a) engage in, own, manage, operate, control, or participate in the ownership, management, operation, or control of, any Competing Business;
(b) hold any position (including employee, consultant, contractor, officer, director, or advisor) with a Competing Business in which Employee performs duties that are the same as or similar to the Services; or
(c) perform the Services for a Customer on behalf of a Competing Business.

3.3 Permitted Passive Investments
Employee may maintain ownership of up to five percent (5%) of the outstanding securities of a publicly-traded Competing Business, provided Employee exercises no managerial control.

3.4 Tolling
If Employee breaches Section 3.2, the Restricted Period shall be tolled for the duration of such breach.

3.5 Compliance Certification
Upon request during the Restricted Period, Employee shall certify in writing compliance with this Agreement.

4. REPRESENTATIONS & WARRANTIES

4.1 Mutual Authority. Each Party represents that it has full right, power, and authority to enter into and perform this Agreement.

4.2 Employee Representations. Employee further represents and warrants that:
(a) Employee is not subject to any agreement that conflicts with this Agreement;
(b) Employee’s acceptance of employment and the performance of duties will not violate the rights of any third party; and
(c) Employee’s annual earnings exceed the minimum earnings threshold established under Md. Code Ann., Lab. & Empl. § 3-716.

4.3 Survival. All representations and warranties shall survive the expiration or termination of this Agreement.

5. COVENANTS & RESTRICTIONS

5.1 Non-Solicitation of Customers. During the Restricted Period, Employee shall not solicit or attempt to solicit any Customer for purposes of providing products or services in competition with Employer.

5.2 Non-Solicitation of Employees. During the Restricted Period, Employee shall not recruit, solicit, or induce any employee or contractor of Employer to terminate or reduce his/her relationship with Employer.

5.3 Confidentiality Covenant. Employee shall at all times maintain the confidentiality of Confidential Information and shall not disclose or use such information except in furtherance of Employer’s Business.

5.4 Notice of Future Employment. Before accepting employment or engagement that could conflict with this Agreement, Employee shall provide the prospective employer or principal with a copy of this Agreement and simultaneously notify Employer in writing of the prospective engagement.

6. DEFAULT & REMEDIES

6.1 Events of Default. The occurrence of any of the following constitutes an “Event of Default”:
(a) Employee’s breach of Sections 3, 5, or any other material provision of this Agreement;
(b) Employee’s failure to provide compliance certification under Section 3.5; or
(c) Employee’s failure to cooperate in any investigation concerning alleged breach.

6.2 Notice and Cure. Employer shall provide written notice detailing the nature of the breach. Where the breach is curable, Employee shall have five (5) business days from receipt of notice to cure; provided that breaches involving disclosure of Confidential Information or competition are deemed incapable of cure.

6.3 Primary Remedy – Injunctive Relief. Employee acknowledges that breach will cause irreparable harm, and Employer shall be entitled to temporary, preliminary, and permanent injunctive relief in any court of competent jurisdiction without the necessity of posting bond.

6.4 Additional Remedies. Employer may also recover actual, consequential, and incidental damages, attorneys’ fees, and costs incurred in enforcing this Agreement.

7. RISK ALLOCATION

7.1 Indemnification by Employee. Employee shall indemnify, defend, and hold harmless Employer and its affiliates, officers, directors, employees, and agents from and against any and all losses, liabilities, damages, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to Employee’s breach of this Agreement.

7.2 No Liability Cap. The Parties expressly agree that no monetary cap shall apply to Employee’s liability under this Agreement.

7.3 Insurance. Employer may, at its discretion, maintain key employee insurance; such insurance does not limit Employee’s obligations hereunder.

7.4 Force Majeure. Neither Party shall be liable for failure to perform its non-monetary obligations where such failure is caused by events beyond its reasonable control; provided, however, that this Section shall not excuse Employee from complying with Sections 3 or 5.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement and any dispute arising hereunder shall be governed by and construed in accordance with the laws of the State of Maryland, without regard to its conflict-of-laws rules.

8.2 Forum Selection. The Parties irrevocably submit to the exclusive jurisdiction of the state courts located in [COUNTY], Maryland for any suit, action, or proceeding arising out of or relating to this Agreement.

8.3 Optional Arbitration. The Parties may, by mutual written agreement after a dispute arises, submit any claim (other than requests for injunctive relief) to binding arbitration administered by [ARBITRATION ADMINISTRATOR] under its rules then in effect.
[// GUIDANCE: Delete Section 8.3 if arbitration is not desired.]

8.4 Jury Waiver. TO THE EXTENT PERMITTED BY LAW, EACH PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY LITIGATION RELATING TO THIS AGREEMENT.
[// GUIDANCE: Strike or retain consistent with client preference and local enforceability.]

8.5 Preservation of Injunctive Relief. Nothing in this Section shall limit Employer’s right to seek equitable relief under Section 6.3 in any court of competent jurisdiction.

9. GENERAL PROVISIONS

9.1 Amendment and Waiver. No amendment or waiver of any provision of this Agreement is effective unless it is in writing and signed by both Parties. A waiver on one occasion is not a waiver on any subsequent occasion.

9.2 Assignment and Delegation. Employer may assign this Agreement to a successor in interest. Employee may not assign or delegate any rights or obligations without Employer’s prior written consent.

9.3 Successors and Assigns. This Agreement is binding upon and inures to the benefit of the Parties and their respective successors and permitted assigns.

9.4 Severability and Judicial Reformation. If any provision is held unenforceable, the remaining provisions shall remain in full force. The Parties authorize a court of competent jurisdiction to modify overbroad provisions to the minimum extent necessary to render them enforceable under Maryland law.

9.5 Integration. This Agreement constitutes the entire agreement between the Parties regarding the subject matter and supersedes all prior oral or written agreements.

9.6 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which is deemed an original, but all of which together constitute one instrument. Signatures transmitted electronically (e.g., via PDF or e-signature platform) are deemed original.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have executed this Employee Non-Compete Agreement as of the Effective Date.

[// GUIDANCE:
1. Notary and/or witness signatures are not required for enforceability in Maryland but may be added if desired.
2. Retain executed counterpart with Employee’s personnel file.]

STATE-SPECIFIC COMPLIANCE NOTES (Maryland)

1. Wage Threshold – Md. Code Ann., Lab. & Empl. § 3-716 prohibits non-compete clauses for employees earning equal to or less than $15/hour or $31,200 annually (subject to CPI adjustments). The template includes an affirmative representation to address this requirement.

2. Reasonableness – Maryland courts enforce non-competes only to protect a legitimate business interest and only if the scope (time, territory, and activities) is no broader than necessary. Tailor “Restricted Period,” “Restricted Territory,” and “Services” definitions accordingly.

3. Judicial Reformation – Maryland follows a limited “blue-pencil” approach; drafting narrow, severable clauses maximizes enforceability.

[// GUIDANCE: Replace all bracketed placeholders, review for deal-specific facts, and confirm that the employee’s compensation and role justify the stated restrictions. For multi-state employees, consider adding choice-of-law analysis and multi-jurisdictional carve-outs.]