Maryland Noncompete & Nonsolicit: Shield Your Business
Learn how Maryland regulates noncompete and nonsolicitation agreements, recent updates affecting low-wage workers, and practical steps to protect your business with enforceable restrictive covenants.
Overview: Maryland’s Approach to Restrictive Covenants
Maryland permits noncompete and nonsolicitation agreements when they are reasonably tailored to protect legitimate business interests, such as trade secrets, confidential information, and customer goodwill. Courts scrutinize scope, geography, duration, and the employee’s role, and may refuse to enforce provisions that overreach. See, e.g., RJL Temps, Inc. v. Robertson.
Low-Wage and Low-Income Worker Restrictions
Maryland law limits the use of noncompete and conflict-of-interest provisions for employees earning at or below a statutory wage threshold tied to the state minimum wage. These restrictions are codified at Md. Code, Labor & Employment § 3-716. Employers should confirm the current threshold and definitions before presenting any noncompete. Even when a noncompete is off-limits, you can and should use narrowly tailored confidentiality and non-disclosure provisions to protect proprietary information.
Healthcare Professionals: Special Considerations
Healthcare roles raise unique public-interest concerns, such as patient choice and continuity of care, that Maryland courts consider when evaluating reasonableness. Certain licensed professions may also be subject to profession-specific statutes or rules that affect the use or scope of post-employment restrictions. Employers should verify any applicable profession-specific requirements and tailor restrictions to avoid unduly impairing patient access. When in doubt, consider using targeted customer/patient nonsolicitation and robust confidentiality rather than broad noncompetes.
Nonsolicitation Agreements: Customers, Patients, and Employees
Nonsolicitation clauses are often more defensible than broad noncompetes, but they still must be reasonable. Courts look at whether the clause targets relationships the employee actually developed, whether it is limited to specific customers or geographic areas, and whether the duration is no longer than necessary. Overbroad nonsolicitation provisions risk partial or complete unenforceability. See Becker v. Bailey and RJL Temps.
Key Factors Maryland Courts Consider
- Legitimate interest: trade secrets, confidential information, or goodwill.
- Reasonableness: scope, geography, and duration tailored to the risk.
- Role/access: the employee’s responsibilities and exposure to sensitive information.
- Public interest: including customer or patient access to services.
- Consideration and clarity: clear, unambiguous language and adequate consideration.
Drafting Tips to Strengthen Enforceability
- Define the protected interests with specificity (e.g., particular customer lists, proprietary models).
- Calibrate restricted activities to the employee’s actual role and the competitive risk you face.
- Use a measured geographic scope tied to where the employee worked or had material influence.
- Limit customer nonsolicitation to customers with whom the employee had material contact.
- Choose a duration no longer than necessary to protect goodwill or confidential information.
- Pair restrictive covenants with robust confidentiality, invention assignment, and return-of-property clauses.
- Include severability and, where appropriate, Maryland forum and governing law provisions.
Onboarding and Promotion Practices
- Present restrictions with the initial offer when possible; allow time for review.
- Offer additional consideration for mid-employment agreements where appropriate.
- Maintain signed copies; train managers not to expand restrictions informally.
- Update agreements when roles or territories change.
- Screen out employees covered by § 3-716 before requesting a noncompete.
Enforcement and Practical Alternatives
When enforcement is necessary, employers typically seek injunctive relief and, where available, damages. Before litigating, consider targeted alternatives: reminder letters, negotiated carve-outs, reassignment away from specific accounts, garden leave for certain roles, and strengthened confidentiality and nonsolicitation provisions.
Interaction with Federal and Multi-State Trends
Federal policy and many states are reevaluating noncompetes. The FTC has pursued a Non-Compete Clause Rule, which has been subject to ongoing litigation and evolving guidance. Employers with multistate workforces should align templates to the strictest likely jurisdiction and continue to monitor developments. Maryland-specific rules still govern Maryland-based employees or those subject to Maryland law through contract.
Action Checklist for Maryland Employers
- Identify the legitimate business interests you must protect and match the restriction to that interest.
- Screen out employees who cannot be asked to sign a noncompete under § 3-716.
- Prefer targeted nonsolicitation and confidentiality provisions where a noncompete is unnecessary.
- Confirm the reasonableness of scope, geography, and duration for the specific role.
- Update agreements to reflect statutory changes affecting low-wage workers and any profession-specific rules.
- Maintain consistent onboarding and documentation practices to support enforceability.
Practical Tip
Map each restriction to a specific risk. If you cannot explain in one sentence what risk a clause mitigates, narrow it until you can.
FAQ
Are noncompetes enforceable in Maryland?
Yes, if they protect a legitimate business interest and are reasonable in scope, geography, and duration, and not prohibited for low-wage employees.
What counts as a reasonable duration?
Often 6 to 12 months for sales roles and up to 2 years in some circumstances, depending on the facts. Longer terms face closer scrutiny.
Can I use a noncompete for low-wage employees?
No. Maryland law bars noncompete and conflict-of-interest provisions for certain low-wage employees under § 3-716.
Are nonsolicitation clauses easier to enforce?
Generally, yes, when limited to customers the employee had material contact with and for a reasonable period.
Do I need consideration for a mid-employment agreement?
Yes. Provide clear consideration, such as a bonus, promotion, or other benefit, and document it.
Need help tailoring your Maryland agreements?
Our team can review, draft, and calibrate your restrictive covenants to your industry and roles. Contact us.
Disclaimer
Maryland-specific information only. This post is for general informational purposes and is not legal advice. Reading it does not create an attorney-client relationship. Laws change and outcomes depend on specific facts and contracts. Consult qualified Maryland counsel before acting.
