Note that there may be non-competition prohibitions in stock option or grant plans, severance agreements and cash bonus plans. These agreements should also be reviewed before the statute comes into force. [1] The provisions of the Deferred Entry in Non-Competition Agreements Act do not apply to allopathic or osteopathic physicians. In June 2019, Maine significantly changed its competition prohibition legislation. The new rules will make it more difficult for employers to apply these contracts, in order to allow talent to change jobs more freely and more frequently. Secondly, non-competition obligations are reprehensible, but valid for workers who earn more than the threshold, provided they do not restrict the employee more than necessary to protect the employer`s business secrets, other confidential information or value (reputation and customer relations of the company). This raises the question, however, of whether non-competitors can do more now than protect goodwill, since employers can already use NRAs to protect confidential data. It remains to be seen how creative companies will be in the coming months. The Act empowers the Ministry of Labour to review civil law fines imposed on employers who enter into “restrictive employment contracts,” imposes them or threatens to enforce them. As legislators and attorneys general continue to review the application of non-compete obligations in each state, we recommend that employers regularly consult with competent labour counsellors to verify their restrictive contractual agreements and ensure compliance with the current state of the rules.
In addition, the emphasis is on limiting the use of competition agreements with low wages as a reminder of the scrutiny of a differentiated approach to the application of restrictive agreements, with non-competition clauses typically reserved for workers who are truly competitively dangerous. If you have any questions about this new status, if you would like to establish or have new agreements or other documents verified, please contact Bill Sheils or Dawn Harmon in our employment practice group. Restrictive employment contracts “restrictive employment contracts” are defined in the law as agreements between two or more employers, including franchise agreements or contracts between contractors and subcontractors that “prohibit or limit an employer to apply for or hire current or former workers from another employer.” Restrictive employment contracts, often referred to as “non-poaching,” are categorically prohibited by law.