By Greg Care

About two months ago, I wrote a blog about new legislative proposals that would put additional restrictions on the legality of non-competes in Maryland. Those identical bills (SB 900 and its House cross-file, HB 1016) were initially drafted to prevent moderate to large employers that relocate themselves or a majority of their employees outside of Maryland from enforcing a non-compete. What the bills became is a good deal narrower, but still a welcome scaling back of non-competes.

The bills started out applying to all employees working for a company: (1) that, when the employee started, had 31+ employees with the majority of them located in Maryland; and (2) that, at the time of non-compete enforcement, no longer had the majority of its employees or principal place of business in Maryland.

It appears the House of Delegates voted in favor of the bill with essentially the same scope (helpfully, it specified that remote employees counted, too). That changed significantly in the waning days of the General Assembly’s legislative session. On the Senate side, the Finance Committee narrowed the scope from “employees” to “licensed architects.” That version passed in the Senate and, a day later, the House concurred with the Senate’s changes and voted 101-29 in favor of the bill as amended. Just days ago, the Governor signed HB 1016, thus creating this new restriction on non-competes for licensed architects only, in the very particular scenario of the company relocating itself or the majority of its workforce out of the state.

It is not immediately clear where and why the amendments came in that produced this change, but it is notable that this new legislation follows the trend started two years ago by the General Assembly’s restrictions on non-competes for licensed health care provider and veterinarians. It will be interesting to see what other licensed (and, hopefully, non-licensed) professions may be examined next. Let the non-compete cutbacks continue!

If you have questions regarding non-competes in your situation, please contact us today to see if we can assist with your particular circumstances.

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