New England employers have seen a restricting on their ability to use non-compete agreements in recent weeks with the passage of new laws in Maine, New Hampshire, and Rhode Island. In a previous post, we profiled the non-compete legislation passed in Massachusetts. The bills in Maine and New Hampshire are set to be enacted later this year, while the bill in Rhode Island has passed the legislature and awaits signature by the governor.
The newly passed Act To Promote Keeping Workers in Maine is set to take effect on September 18, 2019. The new law will dramatically affect employers who utilize various common restrictive covenants by: (1) prohibiting employers from entering into no-poach or non-solicitation agreements with other employers; (2) barring employers from entering into non-compete agreements with low-wage employees; (3) limiting an employer’s ability to enforce restrictive covenants; (4) mandating advanced disclosure of the use of non-compete agreements; and (5) delaying the effective date of non-compete agreements; and (6) imposing stiff monetary penalties for violation of the law’s restrictions.
The law prohibits employers from requiring employees earning at or below 400% of the federal poverty level to sign covenants not to compete. The new law also prohibits the use of no-poach agreements, even those ancillary to legitimate business collaboration, and non-solicitation agreements, a common provision in NDAs used by many companies.
The law also limits the ability to enforce non-competes by limiting an employer’s legitimate business to only: (a) trade secrets; (b) confidential information; or (c) goodwill. Any employer who violates the law is subject to a fine, not less than $5,000. Continue reading ›