What should employers do to prepare for this change? Maine`s statutes apply to non-compete agreements signed or renewed after September 18, 2019. Prior to the amendment, employers should review their standard agreements and boarding procedures to ensure that agreements concluded after entry into force comply with the requirements of the status and apply only to those against which they can be applied. The law requires employers to disclose that a non-compete agreement is necessary before making a job offer for a position that requires a non-compete agreement. In addition, employers must provide a copy of a non-compete agreement to current or potential workers at least three working days before the agreement is signed. Refraining from issuing one of the two forms of notice is punishable by a civil fine. The new law requires employers to notify potential workers before offering a job that they are required to sign a non-compete agreement. Employers must notify workers or potential workers of any non-competition clause and provide a copy of the non-compete agreement no later than 3 working days before the agreement is signed. Any employer who violates the redundancy rules or attempts to impose non-compete clauses on low-wage workers may be fined at least $5,000 per violation by the Ministry of Labour. The law provides for a fine of at least USD 5,000 if an employer asks an employee whose wages are lower to sign a non-competition clause, or if an employer does not enter the prescribed period of dismissal and review before requiring an employee or potential worker to sign a non-compete clause. Maine DOL is responsible for the application. Here are our takeaways on these new laws: some Maine employers will simply stop asking employees to sign non-compete bans and simply rely on robust NDAs. For these companies, the legal costs and costs of preparing another contract to solve a relatively minor problem, which a good NOA can already cover to a large extent, are not cost-effective.
The law codifies the common law principle that «non-competition agreements are contrary to public policy» and states that such agreements are applicable only to the extent that they are appropriate and do not go above and beyond what is necessary to protect an employer`s legitimate business interests, which are defined only: (1) an employer`s business secrets , 2) confidential information of an employer or (3) of the commercial or commercial value of an employer. For workers earning money above the legal threshold, an employer cannot ask a worker to enter into a non-compete agreement in the event of dismissal, unless the employer has disclosed the agreement prior to the submission of the offer. Non-competition clauses can only take effect after one year of employment of the worker or after a period of six months from the date of signing of the contract, with the later date being chosen. 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. If you need a non-compete agreement, make sure it is a legitimate business interest, as set out in the Statute, make sure it is tight, make sure you provide the required notice with a copy of the proposed agreement and make sure you provide the time necessary for the verification. Employers who violate the provisions of the new non-competition clause or the confidentiality agreement provisions of the new act may be liable to a fine of $5,000 or more by the Ministry of Labour. The new law will come into force on September 18, 2019.
The no-competition provisions apply to agreements signed or renewed on or after that date.