Allegis Group, Inc. v. Justin Jordan, 951 F.3d 203

Background:

Allegis Group created an Incentive Investment Plan that awarded “Units” convertible to 30 months of post‑employment payments if a participating employee complied with Section 9 restrictions (30‑month non‑solicit/non‑compete/non‑raid obligations).
Four high‑level Aerotek employees (Jordan, Curran, Nicholas, Hadley) elected into the Plan and received or expected payments after separating from Aerotek.
During their respective 30‑month restriction periods, the four formed or worked for Jordan’s Piper companies and solicited Allegis/TEKsystems clients and employees.
Allegis, Aerotek, and TEKsystems sued to recover incentive payments on the ground the employees breached the Plan conditions; the district court granted summary judgment for the companies and ordered return of payments.
On appeal the Fourth Circuit considered (1) whether Sections 9(3) and 9(5) are enforceable (condition precedent vs. restrictive covenant/forfeiture) and (2) whether the employees breached such conditions; the court affirmed the district court.

Issues:

Issue	Plaintiff's Argument (Allegis)	Defendant's Argument (employees)	Held
Are Sections 9(3) and 9(5) enforceable or subject to Maryland’s reasonableness review for restrictive covenants?	These provisions are explicit conditions precedent to payment (not prohibitions), so enforceable as written; participants chose the bargain.	Provisions function as restrictive covenants covering Allegis and all subsidiaries and are overbroad and unenforceable under Maryland reasonableness standard.	The Plan’s text makes Section 9 a condition precedent; the provisions are enforceable. The court also held they would satisfy reasonableness.
Did the employees comply with Section 9 during their 30‑month periods?	Record shows soliciting/inducing employees and clients of Allegis/TEKsystems and diverting business; thus breached.	Curran/Hadley/Nicholas largely do not contest; Jordan claims factual dispute and that contacts were benign/high‑level conversations near the end of the period.	Summary judgment: undisputed evidence shows all four breached Section 9 (Jordan solicited clients and induced employees during the restricted period).
Is return of incentive payments (rescission/restitution) appropriate?	Plan conditions defeat entitlement; Plan requires return if Section 9 violated; restitution appropriate.	Breach not material; companies cannot return benefit conferred and equity disfavors rescission.	Because payment was conditioned on exact compliance with Section 9 and defendants failed to comply, Allegis is entitled to return of payments with interest; judgment affirmed.

Key Cases Cited

Rochester Corp. v. Rochester, 450 F.2d 118 (4th Cir. 1971) (forfeitures in post‑employment benefit plans can be enforceable as contractual bargains)
NCO Fin. Sys., Inc. v. Montgomery Park, LLC, 842 F.3d 816 (4th Cir. 2016) (contract construction: conditions precedent require strict compliance)
Elderkin v. Carroll, 941 A.2d 1127 (Md. 2008) (Maryland rule that substantial compliance does not satisfy a condition precedent)
Food Fair Stores, Inc. v. Greeley, 285 A.2d 632 (Md. 1972) (Maryland applies reasonableness review to pension/benefit forfeiture provisions tied to post‑employment conduct)
Cochran v. Norkunas, 919 A.2d 700 (Md. 2007) (clear, unambiguous contract language is enforced as written)
Silver v. Goldberger, 188 A.2d 155 (Md. 1963) (restrictive covenants in employment are enforceable only if reasonable)