Updated January 18, 2023
A Maryland non-compete agreement gives the power to restrict a person’s ability to work in a specific field for a geographical area and duration. It is usually connected to an employment contract to limit competition after an employee is terminated. In Maryland, low-wage employees or attorneys are prohibited from entering a non-compete.
Laws
Legally Enforceable?
Yes, except for the following individuals making:
- $15 per hour or less; or
- $31,200 annually or less.
Source: § 3-716
Adequate Consideration
A non-compete is required to provide adequate consideration (such as being ancillary to an employment contract or the sale of a business) and reasonable to the extent that:
- Employer protection. Protects the business of the employer;
- Undue hardship. It does not impose an undue hardship on the employee; and
- Public interest. It is not against the public interest.
Source: Ruhl v. F.A. Bartlett Tree Expert Co. (1967) and Becker v. Bailey (1973)
Attorneys (prohibited)
A licensed attorney is prohibited from entering into a non-compete agreement.
Source: RULE 19-305.6
Continued Employment
Maryland courts have ruled that continued employment is deemed sufficient consideration for a non-compete.
Source: Simko, Inc. v. Graymar Co. (1983)
Maximum Term
A non-compete is considered reasonable for 3 years.
Source: Holloway v. Faw, Casson & Co. (1989))
Blue Penciling
A non-compete is allowed to be modified if a non-compete is overbroad and not deliberately unreasonable.