Maryland’s legislature meets only 90 days every year, unless special sessions are called for emergency purposes, usually budget-related. As in most years, a number of bills affecting the employment relationship are up for consideration. Some will disappear with nary a trace, some will get hearings but little else, and some may even pass. I’ll post about a few of the interesting ones to watch.
To protect the unemployment insurance fund as well as the interests of unemployed people, Senate Bill 51 would override an otherwise enforceable noncompete agreement where the former employee is receiving unemployment benefits. The law would not apply to any contracts that predated October 2013, so the effect of the law would be delayed. Noncompete agreements hinder individuals from obtaining work in their fields, but protect their former employers from poaching contacts made while the former employee was the “face of the company.”
The idea behind this bill, then, is to assume that the restrictive covenants are keeping the unemployed worker from getting a new job. One interesting twist, though, is that the employee must be actually receiving unemployment benefits. That means that someone who quit without good cause, or who had been found guilty of gross misconduct, would not realize the benefit of having their restrictive covenants retroactively voided.
We should expect heavy opposition to this bill from business lobbyists.