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A non-compete agreement, also known as a restrictive employment agreement, is a legal document relying on restrictive covenants. Businesses use them to ensure that their employees will not take their trade secrets and legitimate business interests once the employment relationship ends. Once an employee or business associate signs the agreement, it becomes a legally enforceable document that the employee must adhere to, or face serious repercussions.
When considering an offer of employment for a prospective employee, many companies use non-competition agreements as a means to protect trade secrets. This could also be structured as a contract provision that is part of an employment contract package.
Before creating a non-compete agreement, business owners should seek legal advice from an attorney well-versed in employment law. These agreements are not highly favored by Maine courts and can be quite complicated. In some cases, their enforceability depends on the industry of your business and the pay of the employee.
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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:
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:
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!
To write a Maine non-compete agreement, first review Maine statutes and limitations. Then, include the following clauses:
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.
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