Are non-compete agreements enforceable in Maryland?
1. Baseline Rule. Two regimes. (a) Md. Code Lab. & Empl. § 3-716 (effective Oct. 1, 2019, amended 2023) voids non-competes for low-wage employees. (b) For higher-wage workers, common law from Holloway v. Faw, Casson & Co., 319 Md. 324 (1990), governs.
2. Reasonableness Factors. Common-law test: the covenant must (a) protect a legitimate employer interest (trade secrets, confidential information, customer goodwill, special training), (b) be no broader than necessary in time, geography, and scope, (c) not impose undue hardship, and (d) not harm the public.
3. Consideration. Continued at-will employment is sufficient consideration.
4. Wage Thresholds. § 3-716 bans non-competes for any employee who earns equal to or less than 150% of the state minimum wage; the threshold is approximately $19.88/hour ($41,350/year for full-time) as of 2024 and rises with state minimum-wage increases. The amended statute extends to additional health-care providers and other low-wage protections.
5. Blue Pencil / Reformation. Maryland applies a strict blue-pencil rule under Holloway and Deutsche Post Global Mail, Ltd. v. Conrad, 116 F. App'x 435 (4th Cir. 2004) — courts may strike severable unreasonable provisions but will not rewrite.
6. Industry Carve-Outs. Lawyers barred by Md. RPC 5.6. Healthcare providers in certain settings have additional protections.
7. FTC Rule. Enjoined nationwide by Ryan LLC v. FTC (E.D. Tex. Aug. 2024); on appeal.
8. Garden Leave / Forfeiture-for-Competition. Permitted.
9. Choice of Law. Maryland courts apply Maryland law where another state's law conflicts with Maryland public policy.
This is legal information, not legal advice.
- Your wage is near 150% of the Maryland minimum wage
- Your covenant has multiple overbroad provisions that may all fall together
- Employer seeks an injunction in Maryland circuit court
- Md. Code Lab. & Empl. § 3-716
- Holloway v. Faw, Casson & Co., 319 Md. 324 (1990)
- Deutsche Post Global Mail, Ltd. v. Conrad, 116 F. App'x 435 (4th Cir. 2004)
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.