I. Introduction
Employers in Maryland and Virginia face significant changes in employment laws related to noncompete, confidentiality, nondisclosure, and nondisparagement provisions in pre-dispute agreements. Two key amendments impact these provisions in Virginia and Maryland, necessitating a thorough review and revision of existing employment agreements.
II. Virginia Employment Law Amendments
- A. Prohibition on Sexual Harassment Agreements
- Effective July 1, 2023, Virginia employers are prohibited from mandating employees to enter confidentiality, nondisclosure, or nondisparagement agreements related to claims of sexual harassment or sexual assault.
- This aligns with laws in states like New Jersey, New York, Washington, and California, as well as the federal Speak Out Act, which restricts such agreements before disputes arise.
- Notably, the law applies to agreements entered into as a condition of employment and likely covers agreements made at the beginning of employment, not post-employment arrangements.
- B. Applicability and Considerations
- The Virginia law doesn’t explicitly state retroactivity, implying it applies to agreements entered into on or after July 1, 2023.
- Employers must revise existing agreements, particularly those integral to onboarding, to exclude claims of sexual harassment and assault from confidentiality, nondisclosure, or nondisparagement provisions.
III. Maryland Employment Law Amendments
- A. Restriction on Noncompete Agreements
- Effective Oct. 1, 2023, Maryland employers cannot impose noncompete agreements on employees earning $41,350 or less annually, with the threshold automatically increasing based on the state minimum wage.
- B. Salary Threshold Adjustments
- Senate Bill 591 increases the salary threshold to 150% of the state minimum wage, resulting in a threshold of $19.88 per hour (or approximately $41,350 annually) as of Oct. 1, 2023.
- Maryland’s minimum wage increase to $15 per hour, effective Jan. 1, 2024, raises the threshold to $22.50 per hour (or approximately $46,800 annually).
- C. Implications for Employers
- Employers should anticipate the impact of the minimum wage increase and prepare for adjustments in the noncompete threshold beginning in 2024.
IV. Conclusion Maryland and Virginia employers must stay abreast of these legislative changes and promptly review and update their employment agreements to ensure compliance. Failure to do so may expose employers to legal risks and challenges.
Disclaimer: This article provides general guidance and information. HR managers should consult with legal experts to ensure compliance with federal, state, and local laws when implementing these strategies.