Employee Restrictive Covenant Agreement
Cover Terms
The terms below are incorporated into and form part of this agreement.
| Employer | [Legal name of the entity that employs the employee] | ||||||||
| Employee | [Full legal name of the employee] | ||||||||
| Employee Title / Position | |||||||||
| Effective Date | [Effective date of this agreement — the date the last party signs. It anchors the duration presumptions stated in Cover Terms.] | ||||||||
| Governing Law | Maryland | ||||||||
| Confidentiality | |||||||||
| Trade Secrets Duration | Perpetual | ||||||||
| Other Confidential Information Duration | 24 months | ||||||||
| Employee Non-Solicitation | |||||||||
| Duration | 24 monthsMarket benchmark HideShow
Why this selected default?Why is this the selected default?24 months matches the modal employee non-solicit term observed in benchmarked, publicly-filed employee agreements; 12 months is the common lighter alternative. The Act sets no express duration presumption for the no-hire category, so the uniquely-essential scope limit does the primary category work; counsel should size the term to the workforce interest actually protected. Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing. See all 3 examples in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark → | ||||||||
| Covered Employee Period | 12 months | ||||||||
| Customer Non-Solicitation | |||||||||
| Duration | 12 monthsState-law basis 12 monthsReference only — not part of this agreement. 12 months sits well inside the presumptively reasonable window for a current-customer non-solicit: eighteen months, or for as long as post-separation consideration is paid, whichever is greater. Counsel may extend toward eighteen months, or longer while post-separation consideration is paid, where the interest supports it. | ||||||||
| Covered Customer Period | 12 months | ||||||||
| No Business with Covered Customers | |||||||||
| Duration | 12 monthsState-law basis 12 monthsReference only — not part of this agreement. 12 months sits within the current-customer window. Because non-dealing has no category of its own, it is drawn to fit inside the current-customer non-solicit exception, and its duration tracks that category's presumption. | ||||||||
| Non-Investment | |||||||||
| Duration | 12 months | ||||||||
| Non-Disparagement | |||||||||
| Duration | 24 months | ||||||||
| Definitions | |||||||||
| Passive Public Holdings Threshold | five percentMarket benchmark HideShow
Why this selected default?Why is this the selected default?Five percent of any class of publicly traded securities is the modal passive-investment carve-out threshold observed in benchmarked, publicly-filed employee agreements that include the carve-out (lower 1-3 percent thresholds are the common tighter alternatives). In a state whose law voids restraints except as it specifically provides, a clause forbidding ordinary public shares is gratuitous overbreadth serving no listed interest. Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing. See all 6 examples in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark → |
Standard Terms
1. Defined Terms
“Competitive Business” means the business activities described in Cover Terms under Competitive Business.
“Confidential Information” means non-public information relating to Employer's business, including trade secrets, customer and patient lists, pricing, business processes, technical data, and strategic plans, but excluding information that becomes public through no fault of Employee, information that arises from Employee's general training, knowledge, skill, or experience whether gained on the job or otherwise, information that is readily ascertainable to the public, and information Employee otherwise has a right to disclose as legally protected conduct.
“Covered Customers” means customers, patients, vendors, referral sources, and business partners with whom Employee had material contact or for whom Employee had responsibility during the 12 months before termination of employment.
“Covered Employees” means employees with whom Employee worked or whom Employee managed during the 12 months before termination of employment.
“Passive Public Holdings” means ownership of securities of a publicly traded company representing less than five percent of any class of such company's securities, and interests in diversified mutual funds, index funds, and exchange-traded funds that may hold securities of a Competitive Business.
“Protected Interests” means Employer's interest in protecting unique services, Trade Secrets, routes or client lists, and customer relationships.
“Restricted Period” means the duration specified in Cover Terms for each covenant, beginning on the date Employee's employment with Employer ends for any reason.
“Restricted Territory” means the geographic area described in Cover Terms under Restricted Territory.
“Solicit” means to directly or indirectly initiate contact with, approach, induce, or encourage any person or entity for the purpose of diverting business away from Employer, but does not include responding to general advertisements or unsolicited inquiries not initiated by Employee.
“Trade Secrets” means information that qualifies as a trade secret under the Maryland Uniform Trade Secrets Act and applicable federal law, including information that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and that is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Drafting Note Tie the restraint to a protectable interest
A Maryland non-compete reaches only a genuine protectable interest — unique services, trade secrets, customer lists, or goodwill — so a restraint aimed at ordinary competition unconnected to any of those protects nothing the law recognizes and fails on the interest requirement. Confidential-information protection carried on separate confidentiality and trade-secret terms survives even where the non-compete does not .
2. Recitals and Protected Interest
Employer and Employee acknowledge that each restrictive covenant in this agreement is ancillary to a valid employment relationship, is supported by adequate consideration, protects Employer's Protected Interests, and is reasonable in area and duration. Employee will receive access to Employer's Confidential Information, Trade Secrets, and customer and patient relationships in the course of employment.
3. Maryland Statutory Worker-Class Voids
Notwithstanding any other provision of this agreement, no noncompete or conflict-of-interest provision applies to Employee if:
(a) Employee earns equal to or less than 150% of the Maryland minimum wage rate;
(b) Employee is licensed as a veterinary practitioner or veterinary technician, at any compensation level; or
(c) Employee holds a health-occupation license, provides direct patient care, and earns equal to or less than $350,000 in total annual compensation.
4. Timing and Consideration
This agreement is effective as of the Effective Date listed in Cover Terms. Employer and Employee acknowledge that continued at-will employment is adequate consideration for the restrictive covenants in this agreement. For a covenant Employee signs after employment begins, the parties acknowledge that Employee's continued at-will employment supplies that consideration. Employee's execution of this agreement is connected to, and given in exchange for, Employee's continued employment with Employer. Employee has had the opportunity to consult an attorney before entering into this agreement.
5. Confidential Information and Trade Secret Protection
Employee must treat all Confidential Information as strictly confidential. Employee must not use or disclose Confidential Information except as required to perform authorized job duties or with Employer's prior written consent. Employee's obligations regarding Trade Secrets continue for the period specified in Cover Terms under Trade Secrets Duration. Employee's obligations regarding other Confidential Information continue for the period specified in Cover Terms under Other Confidential Information Duration. This section does not prohibit Employee from disclosing information that arises from Employee's general training, knowledge, skill, or experience, whether gained on the job or otherwise, information that is readily ascertainable to the public, or information that Employee otherwise has a right to disclose as legally protected conduct.
6. Permitted Disclosures and Protected Conduct
Nothing in this agreement prohibits Employee from: (a) reporting possible violations of law to any government agency, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, or any other federal, state, or local agency; (b) making disclosures protected under whistleblower provisions of any law; (c) discussing wages, hours, or other terms and conditions of employment as protected by applicable law, including Section 7 of the National Labor Relations Act, 29 U.S.C. § 157; (d) testifying truthfully in legal proceedings; (e) disclosing information that arises from Employee's general training, knowledge, skill, or experience, information readily ascertainable to the public, or information Employee otherwise has a right to disclose as legally protected conduct; or (f) filing a sealed complaint in court using Confidential Information without liability. Pursuant to the Defend Trade Secrets Act (18 U.S.C. § 1833(b)), Employee may not be held criminally or civilly liable for disclosing a trade secret in confidence to a government official or attorney solely for the purpose of reporting or investigating a suspected violation of law, or in a sealed court filing.
7. Return, Deletion, and Certification of Company Property
Upon termination of employment, Employee must promptly return to Employer all documents, devices, files, credentials, and other materials containing or relating to Confidential Information, including customer lists and pricing information. Where permitted, Employee must permanently delete electronic copies of Confidential Information from personal devices and accounts. Employee must certify compliance with this section in writing upon Employer's request.
Drafting Note Return and certification of company property
Maryland's recent trade-secret litigation turned on customer lists and pricing data leaving with departing employees, so a covenant that omits a return-and-deletion obligation and a signed certification loses the cleanest contemporaneous record of what left and when if that material later surfaces at a competitor . Return and certification terms sit outside the § 3-716 void, so they hold even where a non-compete does not.
8. Non-Solicitation of Employees
During the Restricted Period, Employee must not initiate contact with or actively Solicit, recruit, hire, or attempt to hire any Covered Employee. This restriction does not prohibit Employee from providing a professional reference upon request or from hiring a person who responds to a general advertisement not directed specifically at Employer's employees.
9. Non-Solicitation of Customers, Vendors, Referral Sources, and Business Partners
During the Restricted Period, Employee must not Solicit the business of any Covered Customer with whom Employee had material contact during the lookback period stated in Cover Terms.
10. No Business with Covered Customers
During the Restricted Period, Employee must not accept, service, or do business with any Covered Customer, regardless of whether Employee or the Covered Customer first initiated contact.
Drafting Note A no-business covenant reaching past solicitation
A no-business or non-dealing covenant reaches a Covered Customer even when the customer initiates the contact, which pushes past the solicitation and client-relationship interests Maryland recognizes and toward blocking ordinary competition — the reach Maryland will not enforce. A covenant of that breadth holds only where a genuine client-relationship or trade-secret interest actually supports it and it stays no wider than that interest needs .
11. Non-Investment
During the Restricted Period, Employee must not acquire or hold any active ownership interest in, serve as a director, officer, manager, or advisor to, or have material economic participation in any Competitive Business. This covenant does not apply if any condition in the Maryland Statutory Worker-Class Voids section applies to Employee. Passive Public Holdings are permitted.
12. Non-Disparagement
During the Restricted Period specified in Cover Terms for Non-Disparagement, Employee must not make statements that are intended to or reasonably likely to disparage Employer, its officers, directors, employees, products, or services. This section does not restrict Employee from making truthful statements in legal proceedings, providing truthful testimony, making disclosures to government agencies, discussing wages, hours, or working conditions as protected by law, or otherwise exercising rights protected by law.
13. Health-Care Provider Notices and Patient Communications
Nothing in this agreement restricts or delays a departing clinician, or Employer, from communicating a patient's right to continue care with Employee at a new location, or from giving any patient notice that applicable law requires.
Drafting Note The patient-notice duty and patient-communication non-obstruction
For a covered high-earner clinician, § 3-716(b) makes patient notice of the departing clinician's new practice location a statutory duty owed on a patient's request, and it runs as a duty of the employer under the statute rather than a term the covenant creates . A covenant drafted to block or delay that notice, or to bar the clinician from telling patients where care continues, collides with the statute; one that leaves the notice and the patient's continuity of care unobstructed keeps clear of it.
14. No Conflicting Obligations
Employee represents that performing duties for Employer and complying with this agreement does not conflict with any prior agreement, court order, or legal obligation binding on Employee. Employee must promptly disclose to Employer any potential conflict that arises during employment.
15. Notice to Future Employers and Other Third Parties
Employer may disclose the existence and terms of this agreement to a prospective employer or business associate of Employee only where a covenant in this agreement is enforceable against Employee and Employer has a reasonable belief that Employee may breach that covenant. Employer will not present or attempt to enforce against a third party a covenant that is void under Md. Code, Lab. & Empl. § 3-716 for Employee's worker class. Employee consents to a disclosure permitted by this section.
16. Tolling During Breach
The Restricted Period for each covenant runs from the date Employee's employment ends and is not extended by any period of breach.
17. Remedies
Employee acknowledges that a breach of this agreement may cause Employer irreparable harm for which money damages would be inadequate. Employer may seek injunctive or other equitable relief in addition to any other remedies available at law. A decision not to enforce a covenant or its liquidated-damages terms does not bar Employer from recovering for trade-secret misappropriation. Any fee-shifting between the parties is mutual and prevailing-party based.
18. Severability and Severable Tiers
If any provision of this agreement is found to be unenforceable, the remaining provisions remain in full force and effect. Each duration, territory, and covered-activity tier is severable, and each enforceable tier remains in effect independently of any unenforceable tier.
Drafting Note Severable tiers over reformation reliance
A Maryland savings clause that asks a court to invent a narrower radius or duration runs into a court that blue-pencils but does not rewrite. Whether a court applies a strict blue pencil or a more granular severance, an indivisible overbroad term gives it nothing to strike and leaves the whole covenant void, while restrictions written as severable, independent tiers let a court excise an excessive tier and enforce the lawful remainder .
19. Survival and Expiration of Each Covenant
Each restrictive covenant in this agreement survives the termination of Employee's employment for the Restricted Period specified in Cover Terms. Obligations under the Confidential Information and Trade Secret Protection section survive as long as the relevant information remains a trade secret. All other provisions survive to the extent necessary to enforce rights that arose during employment.
20. Assignment and Successors
Employee may not assign this agreement or any rights or obligations under it. Employer may assign this agreement to any affiliate, successor, or acquirer of all or substantially all of Employer's business or assets. An assignee acquires no greater right to enforce a covenant than Employer held before the assignment. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns.
21. Governing Law, Venue, and Dispute Process
This agreement is governed by the law listed in Cover Terms. For a Maryland-based worker the parties select Maryland law and a Maryland forum for disputes over the enforceability of the restrictive covenants; all other disputes will be resolved in the courts of the Governing Law state, subject to non-waivable rights under applicable law.
22. Entire Agreement, Amendment, Waiver, and Electronic Signatures
This agreement constitutes the entire agreement between the parties regarding its subject matter and supersedes all prior agreements, understandings, and negotiations on this subject. This agreement may be amended only in writing signed by both parties. A party's failure to enforce any provision does not waive that party's right to enforce it later. This agreement may be executed in counterparts, including by electronic signature, each of which is an original.
Signatures
By signing this agreement, each party acknowledges and agrees to the restrictive covenant obligations above. Employee confirms having read and understood each provision, including the Cover Terms.
Employer
Employer: [Legal name of the entity that employs the employee]
Signature:
Signatory Name: [Full name of the authorized signatory signing for the employer]
Title: [Title of the authorized signatory signing for the employer]
Date:
Employee
Signature:
Print Name: [Full legal name of the employee]
Date: