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Employees are often required to sign a Covenant Not to Compete. This
places a restriction on the employee during employment, and for a stated
period after employment, from competing with the employer.
The Maryland Courts will enforce these types of Covenants provided they
are “reasonable” in nature.
In determining reasonableness, the Court will look at the description of
the industry that the employee will be barred from competing, the length
of time covered, and the territory where the Covenant applies. The more
limited each aspect of the Covenant is, the more likely the Covenant will
be enforced.
Covenants Not to Compete also appear in contracts between businesses,
where one company wants to work with another company without allowing that
company to become a competitor when the contract ends.
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