Legal Question in Business Law in Maryland
Breaking of a "No Compete" contract
My husband is a Corporate Benefits Planner in Maryland. He recently broke his "no compete" contrac. Before leaving, he went to his clients and asked that they sign a "broker of letter" record transferring their business to a partner in his new company. His old company is suing. My concern is that he is 100% commission and if he was to abide by his contract, he would not beable to work in a 50 mile radius for 2 years, and he would have to completely start over with no income. Does my husband have any hope?
2 Answers from Attorneys
"Hope Floats"
Maryland generally enforces contracts not to compete, so long as reasonable in scope and duration. This is a very fact sensitive inquiry. Also, there are issues on whether the no compete clause was a boiler plate provision in a form contract of a large enterprise, in which event a court might strike it as an unconscionable adhesion. Another fact sensitive inquiry.Finally, there may be some issues involving breach of the duty of loyalty in signing up current firm clients to go with new employer before your husband left the current firm. Good luck.
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non-compete contract
There is hope if your husband can convince the court that he was essentially forced to sign the non-compete contract as a condition of getting the job, and also that the terms of the contract are unreasonably broad and therefore unnecessary. For example, to require your husband not to compete within a 50-mile radius seems to be unfair, since it would force him to move out of the area in order to effectively earn a livelihood. The two year period may also be excessive. If properly presented to the court, your husband may be able to get the court to rule this provision unenforceable. Good Luck!