Maryland Employment Contract: Definition, Key Considerations

What is a Maryland Employment Contract?

A Maryland employment contract is a type of contract entered into by employers and employees. This agreement will lay out the terms and conditions surrounding employment and cover important issues like:

• Job title
• Job duties
• Working hours
• Salary
• Benefits
• Time off and vacation time
• Company policies
• Reasons for termination

Employment contracts are most commonly used for highly paid permanent employees but are also useful when hiring employees at any level, contractors, and freelance workers.

The purpose of an employment contract is to protect both parties throughout the business relationship. Employees are protected from “at will” employment doctrine because the contract outlines the details of the job, scope of work, payment amount, and protects the employee from termination without just cause.

An employment contract allows both parties to fully understand each other’s intentions and expectations throughout the duration of employment.

Are Employment Contracts Enforceable in Maryland?

Yes. Employment contracts that abide by all contract laws are enforceable in Maryland. The contract must include all elements of a contract like offer, acceptance, and consideration. The contract must be entered into voluntarily by competent parties.

Restrictive employment contracts like non-compete agreements are also enforceable in Maryland as long as they meet certain requirements as described in the Maryland Non-Compete and Conflict of Interest Clauses Act.

Some of these restrictions include:

1. Non-compete agreements cannot be used for employees earning less than $15 an hour or $31,200 a year
2. The non-compete clauses creates an undue hardship for the employee
3. Non-compete agreements cannot be used for employees who don’t have unique skills
4. Must be necessary to protect a valid business interest

What Are the Legal Requirements for a Maryland Employment Contract?

Employment contracts in Maryland can be written or verbal contracts. It is recommended that if you are going to have an employee contract that it is written and signed by both parties. While oral contracts can be enforced, a written contract serves as tangible evidence and ensures that the terms are clear, and the contract is enforceable.

Employment contracts cannot violate any laws or go against public policy. Furthermore, employment contracts must be fair and conscionable. An unconscionable contract is one that if enforced, would be a miscarriage of justice. Elements that may make an employment contract unconscionable include:

1. Undue influence to sign the contract
2. Forcing an employee to sign the contract under duress
3. Unequal bargaining power between the employer and employee

Types of Maryland Employment Contracts

There are several types of employment contracts used in Maryland including:

• Permanent employment. An indefinite contract where an employee is hired to work for a company until the employee no longer wishes to work or the employee is terminated in accordance with the contract provisions.
• Fixed term employment contract. A contract that has an agreed upon start date and end date. The end date can be the completion of the task or project laid out in the contract.
• Independent Contractor agreement. Used for contractors and freelancers who are hired by an employer but are not employees of the company.
• Confidentiality agreement. Sometimes called a non-disclosure agreement, this restrictive covenant prevents the employee from releasing valuable information about the business
• Non-compete agreement. Protects the employer by limiting the employee from working for competitors or creating a competing business within a certain number of years or within a certain geographic boundary. This clause must follow certain legal requirements to be enforceable.
• Severance agreement. Lays out the benefits and protections the employee will enjoy when employment with the company ends. This allows employees to secure future employment opportunities and is vital when there is a non-compete clause.