Make a Maine Non-Compete Agreement

Applicable State Laws - Me. Rev. Stat. Ti. 26, c. 7 § 599-A 

According to Maine's state law, a non-compete agreement may not be overly broad in order to protect public policy. It must be specifically written to protect only what is actually considered a legitimate business interest. Legitimate business interests include:

• Trade secrets
• Confidential information
• Goodwill

All non-compete agreements must be reasonable in relation to their geographic area limits and their time limits. They must not create an undue burden on the employee when the termination of employment occurs.

Maine law states that all non-competes created after September 1, 2019 must provide the employee with three (3) business days to review the offer and the non-compete before the deadline. As an act to promote keeping workers in Maine, it also states that the employee who signs the agreement, except for certain types of physicians, must be employed for at least a year or remain employed for at least six months after the document is signed, whichever is longer.

Maine also lists certain exemptions for the use of non-competes. The following industries and situations may not make use of a non-compete agreement:

• The broadcast industry
• Low wage employees, or workers earning less than or equal to 400% of the individual federal poverty level

A non-competition agreement generally has a non-solicitation clause as well. This agreement may also be known as a confidentiality agreement or an alternative restrictive covenant.

If you're in the healthcare industry, consult with an attorney to determine how to properly word your non-compete, specifically if you're working with osteopathic physicians to ensure that you comply with the necessary notice requirements as required by state law and with the Department of Labor. If you use a subcontractor agreement or a franchise agreement, you should speak with an attorney to determine how you can best use this sort of agreement to protect your interests, specifically if your franchisees or subcontractors work in Rhode Island, New York, Massachusetts, or New Hampshire.

Protect your Maine business by also using a Maine non-disclosure agreement form. Download a Maine non-disclosure agreement form now!

How to Write a Maine Non-Compete Agreement

To write a Maine non-compete agreement, first review Maine statutes and limitations. Then, include the following clauses:

• Purpose. This clause explains the purpose of the non-compete agreement: to protect the confidential information of the business. It also identifies the parties and their roles and provides the effective date of the contract. It may also state that the contract will use the term "proprietary information" and "confidential information" interchangeably.
• Non-compete. This clause explains the various restrictions in the contract: time period, geographical area, general and specific business practices, general and specific competitors, general and specific business activities, and forbidding both client and employee solicitation.
• Time period. This clause may restate the time period restriction. It also states when the time period begins, either at the start of the employment relationship or when the relationship is terminated.
• Purchase option. This clause explains whether your business will allow the signing party to decide to buy their way out of the contract. If this is allowed, the amount the party must pay is listed in this clause.
• Jurisdiction. This clause states that Maine statutes will be used to govern the agreement.
• Confidential information. This clause defines "confidential information" as any and all technical and non-technical information provided by your business that includes, and is not limited to, any data or other proprietary information related to products, inventions, plans, methods, processes, developmental products, experimental products, intellectual property, software, databases, customer lists, vendor lists, supplier lists, marketing methods, reports, business plans, financial information, or other information pertaining to your business or any of your clients, consultants, customers, or licensees disclosed to the signing party under the terms of the agreement.
• Permitted disclosure. This clause explains when confidential information is allowed to be disclosed because it is no longer considered confidential. Examples include when information is made public through no fault of the signing party, when the signing party discovers some information on their own without a breach from another party, and when your business provides written disclosure for the release of information.
• Confidentiality. This clause states the recipient acknowledges the information they have access to is confidential and that they agree they will not directly or indirectly communicate the information to another party without receiving written consent from your business. They also agree they will not use the information for any other reason other than to further your business unless they first receive written consent from your business.
• Consultants and employees bound. This clause states that both consultants and employees are on a need-to-know basis and that they are required to keep confidential information in the strictest of confidence.
• Return of materials. This clause states that when the agreement is terminated or when requested by your business, the signing party must return all documents and other tangible material that represents the confidential information of the business as well as any copies that exist. It also states that your business will notify them of any unauthorized breach of confidential information.
• Remedies. This clause explains the remedies that your business is entitled to pursue according to Maine statutes if the signing party breaches their obligations as listed in the agreement. Examples include the recovery of court costs, the recovery of reasonable attorney fees, the award of a temporary restraining order by a Maine court, the award of a preliminary injunction against the unauthorized use of the information by a Maine court, etc., as well as all other remedies available under Maine statutes or as a matter of equity.
• Choice of law. This clause states that the parties agree to choose Maine statutes to govern the agreement.
• Entire agreement. This final clause states that the entire agreement may only be amended in writing if both parties sign it.

The parties must sign and print their names. Both signatures should be dated. Finally, each party should receive a copy of the agreement for their records.