Will a Maine court enforce this employee non-compete?
Sometimes, and only after three statutory gates and a fact-specific reasonableness test. 26 M.R.S. § 599-A(2): "Noncompete agreements are contrary to public policy and are enforceable only to the extent that they are reasonable and are no broader than necessary to protect one or more of the following legitimate business interests of the employer" (the employer's trade secrets, its "confidential information that does not qualify as a trade secret", or "[t]he employer's goodwill"), and the agreement "may be presumed necessary if the legitimate business interest cannot be adequately protected through an alternative restrictive covenant". The statutory gates: an employer "may not require or permit an employee to enter into a noncompete agreement" where the employee earns "wages at or below 400% of the federal poverty level" or is a licensed veterinarian without an ownership interest in the facility; the employer must "notify an employee or prospective employee of a noncompete agreement requirement and provide a copy ... not less than 3 business days before the employer requires the agreement to be signed"; and, physicians excepted, "the terms of a noncompete agreement do not take effect until after one year of the employee's employment ... or a period of 6 months from the date the agreement was signed, whichever is later". Violating the wage floor or the notice rule "commits a civil violation for which a fine of not less than $5,000 may be adjudged". At common law the test is concrete: "[e]mployment itself has been held to be consideration for a noncompetition covenant in an employment contract" and "protecting an employer from business competition is not a legitimate business interest to be advanced by such an agreement" (Brignull v. Albert), while the covenant "must impose no undue hardship upon the employee and be no wider in its scope than is reasonably necessary for the protection of the business of the employer" and cannot stop a former employee "exercising the skill and general knowledge he has acquired" (Bernier v. Merrill Air Engineers, Inc.). What has actually been upheld: two miles and sixteen months for an optometrist (Brignull, affirmed), and a nondisclosure clause confined to "particularized, highly specialized proprietary protected original work" (Bernier, affirmed).
The trap
Exactly what the statute does and does not say matters, because the Maine non-compete law is usually described from memory. The text of § 599-A quoted here contains NO independent consideration requirement: what it requires is pre-offer disclosure, a 3-business-day review copy, and delayed effectiveness. And § 599-A(7) limits the whole section to "all noncompete agreements entered into or renewed after the effective date of this section", so an older covenant is governed by the common law alone. The common-law trap is Maine's as-applied method: "because the reasonableness of a noncompetition agreement depends on the specific facts of the case, we assess the agreement only as Brignull has sought to apply it and not as it might have been enforced on its terms", so a facially overbroad Maine covenant is not automatically dead, and a narrow enforcement request is the way to save it. The statute's wage floor and its veterinarian bar sit in the same subsection and are drafted as alternatives, so check both before assuming the agreement was permitted at all. Separately, 26 M.R.S. § 599-B forbids a "restrictive employment agreement", which it defines as an agreement "between 2 or more employers, including through a franchise agreement or a contractor and subcontractor agreement" that "[p]rohibits or restricts one employer from soliciting or hiring another employer's employees or former employees", and it bans not only entering one but also any employer that would "[e]nforce or threaten to enforce" one, on the same $5,000 minimum fine, with the Department of Labor responsible for enforcement. Finally, 33 M.R.S. § 51(8) puts an agreement to refrain from carrying on a trade, business, occupation or profession inside the statute of frauds: it must be in writing and signed by the party to be charged.
24 authorities
- statute26 M.R.S. § 599-Aenactment date not established
The words that state the rule
"Noncompete agreement" means a contract or contract provision that prohibits an employee or prospective employee from working in the same or a similar profession or in a specified geographic area for a certain period of time following termination of employment.
- statute26 M.R.S. § 599-Aenactment date not established
The words that state the rule
Noncompete agreements are contrary to public policy and are enforceable only to the extent that they are reasonable and are no broader than necessary to protect one or more of the following legitimate business interests of the employer:
- statute26 M.R.S. § 599-Aenactment date not established
The words that state the rule
A noncompete agreement may be presumed necessary if the legitimate business interest cannot be adequately protected through an alternative restrictive covenant, including but not limited to a nonsolicitation agreement or a nondisclosure or confidentiality agreement.
- statute26 M.R.S. § 599-Aenactment date not established
The words that state the rule
B. The employer's confidential information that does not qualify as a trade secret; or [PL 2019, c. 513, §1 (NEW).] C. The employer's goodwill.
- statute26 M.R.S. § 599-Aenactment date not established
The words that state the rule
Notwithstanding subsection 2 , an employer may not require or permit an employee to enter into a noncompete agreement with the employer if: A. The employee is earning wages at or below 400% of the federal poverty level; or [PL 2023, c. 118, §1 (NEW).] B. The employee is a veterinarian licensed under Title 32, chapter 71‑A and is employed in a veterinary facility in which the employee does not have an ownership interest.
- statute26 M.R.S. § 599-Aenactment date not established
The words that state the rule
An employer shall notify an employee or prospective employee of a noncompete agreement requirement and provide a copy of the noncompete agreement not less than 3 business days before the employer requires the agreement to be signed
- statute26 M.R.S. § 599-Aenactment date not established
The words that state the rule
An employer that violates subsection 3 or 4 commits a civil violation for which a fine of not less than $5,000 may be adjudged.
- statute26 M.R.S. § 599-Aenactment date not established
The words that state the rule
This section applies to all noncompete agreements entered into or renewed after the effective date of this section.
- statute26 M.R.S. § 599-Aenactment date not established
The words that state the rule
A court may not enforce a noncompete agreement entered into or renewed with an employee who is a veterinarian licensed under Title 32, chapter 71‑A before the effective date of this paragraph unless the employee is working in a veterinary facility in which the employee has an ownership interest.
- statute26 M.R.S. § 599-Benactment date not established
The words that state the rule
Prohibits or restricts one employer from soliciting or hiring another employer's employees or former employees.
- statute26 M.R.S. § 599-Benactment date not established
The words that state the rule
For purposes of this section, "restrictive employment agreement" means an agreement that: A. Is between 2 or more employers, including through a franchise agreement or a contractor and subcontractor agreement; and [PL 2019, c. 513, §1 (NEW).] B. Prohibits or restricts one employer from soliciting or hiring another employer's employees or former employees.
- statute26 M.R.S. § 599-Benactment date not established
The words that state the rule
An employer may not: A. Enter into a restrictive employment agreement; or [PL 2019, c. 513, §1 (NEW).] B. Enforce or threaten to enforce a restrictive employment agreement.
- statute26 M.R.S. § 599-Benactment date not established
The words that state the rule
An employer that violates subsection 2 commits a civil violation for which a fine of not less than $5,000 may be adjudged.
- statute33 M.R.S. § 51enactment date not established
The words that state the rule
Upon any agreement to refrain from carrying on or engaging in any trade, business, occupation or profession for any term of years or within any defined territory or both; the provisions of this subsection shall not apply to any such agreement made prior to August 13, 1947;
The words that state the rule
Employment itself has been held to be consideration for a noncompetition covenant in an employment contract.
The words that state the rule
We recognize that protecting an employer from business competition is not a legitimate business interest to be advanced by such an agreement.
The words that state the rule
because the reasonableness of a noncompetition agreement depends on the specific facts of the case, we assess the agreement only as Brignull has sought to apply it and not as it might have been enforced on its terms.
The words that state the rule
The trial court found, however, that the purpose of this agreement was to prevent Albert from taking Brignull’s existing patients and to protect the goodwill of BrignulPs business. Finally, because the reasonableness of a noncompetition agreement depends on the specific facts of the case, we assess the agreement only as Brignull has sought to apply it and not as it might have been enforced on its terms. Id. We agree with the trial court’s finding that prohibiting Albert from competing within two miles of Brig-null’s office and within sixteen months after leaving the job was reasonable.
The words that state the rule
To be enforceable, however, restrictive covenants must be reasonable. The reasonableness of a restrictive covenant is a question of law.
The words that state the rule
Proper restrictive covenants cannot preclude former employees from “following any trade or calling for which he is fitted and from which he may earn his livelihood” or “exercising the skill and general knowledge he has acquired or increased through experience or even instructions while in the employment.” Roy, 140 Me. at 107 , 34 A.2d at 481 . To be enforceable the “agreement must impose no undue hardship upon the employee and be no wider in its scope than is reasonably necessary for the protection of the business of the employer.
The words that state the rule
The nondisclosure clause in the Bernier-Merrill employment contract is reasonable. We uphold the court’s conclusion that paragraph 3 reasonably prohibits Bernier from using particularized, highly specialized proprietary protected original work that was custom designed for a particular prospect. In balancing Bernier’s interest in securing employment and Merrill’s interest in protecting the confidential information it created, we find that the agreement does not pose an undue hardship on Bernier
- statute26 M.R.S. § 599-Aenactment date not established
The words that state the rule
A. The employer's trade secrets, as defined in Title 10, section 1542, subsection 4 ;
- statute26 M.R.S. § 599-Aenactment date not established
The words that state the rule
B. The employer's confidential information that does not qualify as a trade secret; or
- statute26 M.R.S. § 599-Aenactment date not established
The words that state the rule
Except for a noncompete agreement between an employer and an allopathic physician or an osteopathic physician licensed under Title 32, chapter 48 or chapter 36 , respectively, the terms of a noncompete agreement do not take effect until after one year of the employee's employment with the employer or a period of 6 months from the date the agreement was signed, whichever is later.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.