Non-compete agreements remain a viable tool for Maryland employers—but they are no longer one-size-fits-all employment provisions. Today, they must be carefully tailored to protect legitimate business interests, comply with Maryland law, and withstand judicial scrutiny. For employers in the state, the non-compete that once felt routine now requires a role-by-role review, a wage check, and a clear enforcement strategy.

Although Maryland has not categorically banned all non-compete agreements, recent legal changes impose new and significant limits on agreements of this nature. Moreover, Maryland common law continues to impose its own restrictions on non-compete agreements, even where no statute voids the agreement.

Maryland Law Limits When Employers Can Use Non-Compete Agreements

The new statutory restrictions are codified in Maryland Labor and Employment § 3-716. The statute begins by specifying that it applies only to employees earning equal to or less than 150 percent of the state minimum wage. With Maryland’s $15 hourly minimum wage, that threshold is $22.50 per hour, and $46,800 per year for a full-time employee working 40 hours per week. For employees earning within that range, non-compete clauses are void when they restrict covered employees from working for a new employer in the same or similar business, becoming self-employed in the same or similar trade, or moving into ordinary competitive employment after leaving.

Although this is a broad bar, the statute does not wipe out every employer protection. Maryland employers may still use carefully drafted agreements that protect:

• Client lists
• Patient lists
• Confidential business information
• Proprietary customer information
• Trade secrets and other proprietary information

There are additional restrictions for individuals working within the healthcare industry, specifically, non-compete agreements are generally unenforceable for individuals who:

• Are required to be licensed under Maryland’s Health Occupations Article
• Provide direct patient care
• Earn equal to or less than $350,000 in total annual compensation

Maryland law generally renders non-compete agreements unenforceable for licensed veterinary practitioners and veterinary technicians.

For employers outside the healthcare and veterinary industries, the statute’s compensation thresholds are among the most important considerations. Unless an employee makes more than $22.50 per hour or $46,800 per year, a non-compete agreement cannot be enforced against them. Because the threshold is tied to Maryland’s minimum wage, it will automatically increase if the state’s minimum wage rises.

Employers should review employee compensation carefully before requiring a non-compete, as agreements below the statutory earnings threshold are unenforceable. Depending on the circumstances, employees who are often appropriate candidates for carefully tailored non-compete agreements include:

• Executives
• Senior sales professionals
• Business development leaders
• Employees with significant customer relationships
• Employees with access to highly confidential business information
• Technology leaders with proprietary product knowledge

Employees who generally are poor candidates include:

• Entry-level employees
• Administrative staff
• Employees without customer relationships
• Workers below the statutory earnings threshold

Maryland Courts Still Review Every Non-Compete for Reasonableness

Even if a restrictive covenant is permitted under Labor and Employment § 3-716, employers may still face challenges enforcing it under Maryland’s longstanding common law governing non-compete agreements. Courts routinely scrutinize these agreements to determine whether they are reasonable in both their scope and duration.

Factors relevant to this analysis include whether the covenant protects a legitimate business interest, uses reasonable time limits, uses reasonable geographic limits, avoids undue hardship on the employee, and avoids harm to the public interest.

Enforcing A Non-Compete Agreement

Even a well-drafted non-compete agreement has little value if an employer is unwilling—or unprepared—to enforce it. When a departing employee begins competing in violation of a restrictive covenant, delay can significantly weaken an employer’s position.

Because a former employee subject to a non-compete agreement poses an immediate risk to their former employer’s business, employers should be prepared to seek a temporary restraining order and a preliminary injunction. This interim relief can preserve the status quo while the litigation proceeds, but obtaining such relief is not easy.

To obtain preliminary injunctive relief, a Maryland employer generally must demonstrate that they are likely to succeed on the merits and that they will suffer irreparable harm if an injunction is not granted. Before seeking an injunction, employers should gather:

• Signed non-compete agreement
• Evidence showing the employee received consideration
• Current compensation records
• Job description and responsibilities
• Customer relationship history
• Territory or account assignments
• Confidentiality acknowledgments
• Device-return records
• Evidence of confidential information accessed before departure

During litigation, employers should prepare for the employee at issue to raise their own arguments. As the party seeking to enforce the agreement, an employer must be prepared to show that the geographic scope of the agreement is reasonable, the time period of the limitation is not excessive, the employee had customer relationships, and that the employee had access to confidential information. The strength of an employer’s case will depend on the strength of their evidence.

Best Practices for Maryland Employers

An ounce of prevention is worth a pound of cure. When drafting a non-compete clause, employers should ensure that the agreement matches the employee’s actual role, limits the restriction to real customers, accounts, or territory, uses a reasonable time period, and defines confidential information clearly. It should also separate non-compete, non-solicitation, confidentiality, and trade secret protections.

In many situations, employers can achieve the same business objective through narrower agreements that are more likely to withstand judicial scrutiny:

• Customer non-solicitation agreements prevent former employees from soliciting existing customers.
• Employee non-solicitation agreements protect against the loss of key personnel.
• Confidentiality agreements safeguard proprietary business information.
• Trade secret policies help preserve legal protection under Maryland and federal law.
• Access controls and cybersecurity measures reduce the risk of confidential information leaving the company.

Maryland law continues to recognize non-compete agreements—but only when they are narrowly tailored, supported by legitimate business interests, and carefully drafted to comply with statutory and common law requirements. Employers should periodically review their employment agreements to ensure they reflect current law, employee compensation levels, and evolving business needs. In many cases, a customized combination of non-compete, non-solicitation, confidentiality, and trade secret protections will provide stronger protection than a one-size-fits-all restrictive covenant.

Careful drafting, thoughtful implementation, and strategic enforcement have never been more important. Employers who rely on narrowly tailored, role-specific restrictive covenants remain well positioned to protect legitimate business interests, while those relying on outdated boilerplate agreements may find them difficult—or impossible—to enforce.

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Frequently Asked Questions About Maryland Non-Compete Agreements

Are non-compete agreements legal in Maryland?
Yes. Maryland has not banned non-compete agreements altogether. However, the law prohibits them for many lower-wage employees and certain healthcare professionals, and courts continue to evaluate all restrictive covenants for reasonableness.

What is the salary threshold for a Maryland non-compete?
Generally, non-compete agreements cannot be enforced against employees earning 150% or less of Maryland’s minimum wage.

Can employers still protect confidential information?
Yes. Confidentiality agreements, trade secret protections, and non-solicitation agreements remain available even when a non-compete is unenforceable.

How long can a Maryland non-compete last?
There is no fixed statutory limit for most employees. Courts evaluate whether the duration is reasonable based on the employer’s legitimate business interests.

What happens if an employee violates a non-compete agreement?
An employer may seek injunctive relief and damages, but success depends on the agreement’s enforceability and the evidence supporting the employer’s claims.

Can a Maryland court modify an overly broad non-compete agreement?
It depends. Maryland courts evaluate restrictive covenants on a case-by-case basis. Employers should not assume a court will rewrite an overly broad agreement, making careful drafting essential from the outset.