Are Non-Competes Enforceable in Maryland? Your Rights Explained

In Maryland, non-compete agreements are still legal for many workers, but a state statute makes them flatly null and void for lower-paid employees. Under Section 3-716 of Maryland's Labor and Employment Article, a non-compete or conflict-of-interest clause that bans an employee from taking a job with a new employer, or from starting their own business, cannot be enforced against a worker whose earnings fall at or below a statutory wage threshold. When that law first took effect on October 1, 2021, the line was set at $15 per hour or $31,200 per year. A 2023 amendment tied the threshold to the state minimum wage instead, voiding non-competes for anyone earning 150% of Maryland's minimum wage or less. With Maryland's minimum wage at $15.00 per hour as of 2026, that puts the cutoff at roughly $22.50 per hour. Because this figure moves with the minimum wage, confirm the current number with the Maryland Department of Labor before relying on it.

Maryland's low-wage non-compete ban

The core protection is straightforward. If you earn at or below the threshold, a non-compete clause your employer asked you to sign is simply unenforceable as a matter of Maryland law. Your employer cannot use it to stop you from working for a competitor, and a court will not enforce it. This is a meaningful protection because non-competes were historically used against retail clerks, restaurant staff, warehouse workers, and other hourly employees who rarely have access to genuine trade secrets.

Two important details: first, the threshold is measured against what you actually earn, so the analysis can change if your pay rises or falls. Second, the wage figure is pegged to Maryland's minimum wage, which is adjusted over time. Maryland reached $15.00 per hour for most employers effective January 1, 2024, and remains there as of 2026, making 150% of that figure about $22.50 per hour. Always verify the live minimum wage and resulting threshold with the Maryland Department of Labor's Division of Labor and Industry rather than assuming last year's number still applies.

The statute does not wipe out every kind of post-employment restriction. It targets clauses that restrict you from joining or forming a competing business. It does not prohibit agreements that protect a client list or that bar the taking, use, or disclosure of a customer list or other proprietary client-related information. So even a lower-wage worker can still be bound by a properly drafted confidentiality or trade-secret provision.

If you earn above the threshold: the reasonableness test

For workers who earn more than the statutory cutoff, Maryland still permits non-competes, but they are not automatically enforceable. Maryland courts apply a long-standing common-law reasonableness test and will only enforce a restriction that meets every part of it. Generally, a Maryland court asks whether the non-compete:

• Protects a legitimate business interest. The employer must be guarding something real, such as trade secrets, confidential business information, or customer goodwill the employee personally developed. Courts will not enforce a non-compete whose only purpose is to keep ordinary competition or a trained employee from leaving.
• Is no broader than necessary. The scope must be limited to what is needed to protect that interest. Maryland courts are especially skeptical of agreements imposed on employees who provide ordinary services and do not have access to confidential information or close customer relationships.
• Is reasonable in duration and geographic reach. Restrictions of a year or two over a defined territory tied to where the employee actually worked are more likely to survive than open-ended, nationwide bans.
• Does not impose undue hardship on the employee or harm the public. A court weighs the burden on your ability to earn a living and the public interest in your services.

If part of a non-compete is overbroad, Maryland follows a strict "blue pencil" approach. A court may strike out an offending word or clause that can be cleanly severed, but Maryland courts traditionally will not rewrite an agreement or add new, narrower terms to rescue a restriction the employer drafted too broadly. That makes overreaching agreements risky for employers and often unenforceable in practice.

Recent changes: healthcare and veterinary workers

Maryland has continued to narrow non-compete use beyond the original low-wage ban. In 2025, the General Assembly passed legislation further restricting non-competes for certain licensed health-care practitioners and veterinary professionals who provide direct services, including provisions that void or sharply limit such clauses below specified income levels and cap their duration and geographic scope for higher earners. The exact income thresholds, effective dates, and limits in these newer provisions are detailed and have been phased in, so if you work in health care or veterinary medicine, confirm the current rules in Section 3-716 and any related provisions through the Maryland Department of Labor or the official Maryland statutes before assuming a clause does or does not bind you.

How Maryland compares to federal law

There is no general federal ban on non-competes. The Federal Trade Commission issued a rule in 2024 that would have banned most non-competes nationwide, but a federal court blocked it, and it is not in effect. That means your protections come almost entirely from Maryland law, which is why the state threshold matters so much. By contrast, the federal Fair Labor Standards Act (FLSA) sets only a baseline $7.25 federal minimum wage and a 40-hour federal overtime standard; Maryland's $15.00 minimum wage as of 2026 is far higher, and it is Maryland's wage figure that drives the non-compete threshold. On non-competes specifically, federal law leaves the field to the states, and Maryland has chosen to limit them.

What to do if you are asked to sign or threatened

If an employer hands you a non-compete, take these steps:

• Read it before signing and keep a copy. Note the duration, geographic area, what activities it restricts, and whether it also includes non-solicitation or confidentiality terms, which are treated differently.
• Compare your pay to the threshold. If you earn at or below 150% of the current Maryland minimum wage, a clause restricting you from competing is likely void under Section 3-716, regardless of what the document says.
• Do not assume a broad clause is enforceable. Even above the threshold, an overbroad non-compete may fail Maryland's reasonableness test. Employers sometimes use aggressive language to discourage workers who do not know their rights.
• Get the threat in writing. If a current or former employer threatens to sue or sends a cease-and-desist letter, keep the communication. It helps a lawyer assess whether the restriction is even enforceable.
• Consult an employment attorney. Because Maryland's blue-pencil rule and reasonableness test are fact-specific, a Maryland employment lawyer can tell you whether your agreement holds up. Many offer initial consultations, and acting before you change jobs is better than after.

For wage questions that affect the threshold and for general worker-rights information, the Maryland Department of Labor's Division of Labor and Industry, Employment Standards Service, is the authoritative state source. Non-compete disputes themselves are generally resolved in court rather than by the agency, so legal advice is important when money or your next job is on the line. Verify the current statutory text in Maryland Labor and Employment Section 3-716 and the live minimum wage before relying on any specific dollar figure.

Official Maryland Sources

This page is based on Maryland employment law. Rules and figures change — verify the current details directly with the official Maryland sources below. This is general legal information, not legal advice.

• Maryland Department of Labor, Division of Labor and Industry (Employment Standards Service) — official Maryland agency.
• File a Wage Claim - Employment Standards Service (Wage Claim Form)
• Maryland Labor and Employment Article, Title 3 (Wage Payment and Collection Law, §3-505)

Federal law and local ordinances may also apply. Federal laws like the Fair Labor Standards Act set a national floor, and your city or county may add protections (such as a higher local minimum wage or paid sick leave). Check both alongside Maryland state law.