The recently passed Act to Promote Keeping Workers in Maine is poised to dramatically alter the status of restrictive covenants in Maine. The Act accomplishes this by: (1) prohibiting employers from entering into no-poach agreements with one another; (2) barring employers from entering into noncompetes with lower wage employees; (3) limiting employers’ ability to enforce noncompetes; (4) mandating advanced disclosure of noncompete obligations; and (5) imposing a time delay between when an employee agrees to the terms of a noncompete and when the noncompete obligations actually go into effect. In addition to barring the enforcement of noncompliant noncompetes, the Act authorizes the Maine Department of Labor to impose monetary civil fines of “not less than $5,000” on employers who enter into non-complaint agreements. The Act apples to contracts entered into or renewed after September 18, 2019, so Maine employers should not waste time in revising their agreements to comply with the Act.
