Maine Non-Compete Agreement

Introduction

Key Things to Know

1. 1

   A non-compete agreement is a contract in which one party, usually an employee, agrees not to compete with a business for a set time and area after the relationship ends. In Maine it is enforceable only to the extent it is reasonable and no broader than necessary.

2. 2

   Maine treats non-competes as contrary to public policy. Under Title 26, Section 599-A(2), a non-compete is enforceable only to protect the employer's trade secrets, other confidential information, or goodwill, and only so far as reasonable and no broader than necessary to protect that interest.

3. 3

   Maine has a wage floor. Section 599-A(3)(A) bars an employer from requiring or permitting a non-compete for any employee earning wages at or below 400 percent of the federal poverty level, which is roughly $62,000 a year for a single person and adjusts every year, so confirm the current figure.

4. 4

   Maine sets no fixed maximum months or miles. Courts in Maine generally weigh the duration, geographic area, and restricted activities against the legitimate interest, and a non-compete may be presumed necessary only if a lesser covenant, such as a nonsolicitation or nondisclosure agreement, cannot protect the interest.

5. 5

   Maine requires advance notice. The employer must disclose before the offer that a non-compete will be required, and must provide a copy at least three business days before requiring signature so the worker can review and negotiate (Section 599-A(4)).

6. 6

   A Maine non-compete does not take effect immediately. Under Section 599-A(5) it does not begin until after one year of employment or six months from the date it was signed, whichever is later, except for allopathic or osteopathic physicians. Most employed veterinarians cannot be bound at all.

7. 7

   Because Maine limits non-competes so tightly, employers often protect information with a nondisclosure or nonsolicitation agreement and the Maine Uniform Trade Secrets Act (Title 10, Sections 1541 to 1548), which Section 599-A itself favors over a broad non-compete.

Maine Requirements for Non-Compete Agreement

• Enforceable Only If Reasonable

  In Maine a non-compete is contrary to public policy and enforceable only to the extent it is reasonable and no broader than necessary to protect the employer's trade secrets, other confidential information, or goodwill (26 M.R.S. Section 599-A(2)). A broad restriction that sweeps wider than the legitimate interest it protects is not enforceable in Maine.

• Wage Floor: 400% of the Poverty Level

  Maine bans a non-compete for any employee earning wages at or below 400 percent of the federal poverty level (Section 599-A(3)(A)). That level is set federally and updated each year, so 400 percent is roughly $62,000 a year for a single person under current guidelines and adjusts annually. Confirm the current federal poverty guideline and do not rely on any other state's fixed salary number.

• Reasonable Scope Tied to a Legitimate Interest

  Maine sets no fixed maximum duration or distance. A non-compete is valid only if it is reasonable and no broader than necessary to protect trade secrets, confidential information, or goodwill (Section 599-A(2)), and may be presumed necessary only if a lesser covenant cannot protect the interest. Courts in Maine generally weigh the time, geography, and restricted activities against that interest, so keep the restriction narrow.

• Advance Disclosure and 3-Business-Day Notice

  Section 599-A(4) requires the employer to disclose before the offer of employment that a non-compete will be required, and to provide a copy of the agreement at least 3 business days before requiring signature so the worker can review and negotiate. A non-compete presented without this advance disclosure and three-business-day window violates Maine law.

• Delayed Effective Date

  Under Section 599-A(5), a Maine non-compete does not take effect until after one year of the employee's employment or six months from the date the agreement was signed, whichever is later. The only exception is a non-compete with a licensed allopathic or osteopathic physician, which is not subject to that delay. A worker who leaves early may never become bound.

• Banned Workers: Low-Wage and Most Veterinarians

  Beyond the wage floor, Section 599-A(3) also bars a non-compete for a veterinarian licensed in Maine who works in a veterinary facility in which the veterinarian has no ownership interest. An employer may not require or even permit a barred worker to enter a non-compete, and a court may not enforce one against a covered veterinarian.

• Civil Fine of at Least $5,000

  An employer that violates the wage ban (subsection 3) or the disclosure and notice rules (subsection 4) commits a civil violation for which a fine of not less than $5,000 may be adjudged, and the Maine Department of Labor enforces the section (Section 599-A(6)). Confirm the worker is above the wage floor and follow the disclosure and notice steps before anyone signs.

• Protect Trade Secrets Another Way

  Because Maine limits non-competes so tightly and presumes them necessary only when a lesser covenant will not do, Maine employers often rely on a nondisclosure or nonsolicitation agreement and the Maine Uniform Trade Secrets Act (Title 10, Sections 1541 to 1548) to protect confidential information without a broad restriction on where a former worker can work.