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BBRC Response to L.D. 1496

March 22, 2024

Dear Governor Mills:

Businesses have a lot of changes they’re trying to undertake right now between MERIT, the impending Paid FMLA changes and more, and L.D. 1496 seems like an unnecessary additional burden to put on businesses at this time. The committee amendment, re-instituting the trade secrets language and the wage threshold piece (that was struck from the original bill) makes it a better bill, but it still seems really vague.

As a chamber of commerce director, I’m a bit unclear on how I should address this to businesses to ensure they are compliant, and also how to distinguish this particular section which states:

“A noncompete agreement may be presumed necessary if the employer’s trade secrets cannot be adequately protected through an alternative restrictive covenant, including but not limited to a nonsolicitation agreement or a nondisclosure or confidentiality agreement.”

· How should I educate a businessperson, who is already overstretched and trying to adjust to the MERIT program, the FMLA and more, about the differences between a noncompete, and “an alternative restrictive covenant including but not limited to a nonsolicitation agreement or a nondisclosure or confidentiality agreement”?

· Who will be enforcing that this has been done adequately/correctly, and what are the criteria that will be followed to make that enforcement decision?

· What is the penalty for this transgression should the enforcement deem that an agreement that an employer made in good faith as a noncompete, should have been categorized as a nondisclosure agreement or whatnot?

· Finally, why is this backdated to September 2019- an oddly specific date- when most businesses agree the way business was done pre-pandemic compared to five years later seems world’s apart? This

seems like it would be an enforcement nightmare and an extra burden on business owners to go back five years to retrofit this policy.

I’m not sure what this bill is solving, if I’m being honest. I think it adds more confusion to employers struggling to hire people, and adds more uncertainty to employers who need to protect their proprietary, privileged and confidential trade secrets. Noncompetes may need to be looked at, but not by adding more confusion. This bill needs to be surgical in it what’s allowed and not allowed, so that there isn’t more confusion for employers who are already under a lot of new changes, and it must not be backdated.

I do believe that confusing businesses and burdening them with trying to figure out the difference between nonsolitication, nondisclosure, confidentially agreements, and noncompetes is a trivial and pedantic exercise which will frustrate businesses and perhaps make them throw up their hands about wanting to do business in Maine.

I would encourage a veto on L.D. 1496 and ask the legislators to go back to the table and create something more clear, better defined, and not retroactive if they insist on revamping noncompete clauses. I suspect this bill has been submitted because legislators want to campaign on limiting noncompete clauses, but this bill is needlessly vague and will result in them bragging about making business more difficult for employers, and for a chamber executive, that isn’t really something we think anyone should brag about.

Thank you for your consideration.

On behalf of Bath-Brunswick Regional Chamber,

Cory King Executive Director Bath-Brunswick Regional Chamber

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