§ 1. Governing Statutory & Common Law Authority
The enforceability of non-competition agreements in Maryland is governed by Md. Lab. & Empl. Code § 3-716. Non-competes prohibited for employees earning $49,920/year or less (2026) OR earning $19.62/hour or less. Applies only to employers with 25+ employees for some provisions.
Recent legislative developments: 2019 statute established the initial salary threshold.
§ 2. Compensation Threshold Requirements
Maryland imposes a statutory compensation threshold for non-compete enforcement. Under current law, non-compete covenants are presumptively void for employees earning below the statutory minimum. 2026 threshold. Also cannot apply to employees earning $19.62/hour or less. The threshold is $49,920/year — but whether your total compensation qualifies depends on how your state counts bonuses, commissions, and equity.
§ 3. Temporal Limitations on Post-Employment Restrictions
Maryland does not codify a maximum duration. No statutory maximum, but must be reasonable. In practice, 1-2 years is generally considered the outer limit of reasonableness, though outcomes vary significantly based on the employee's role and access to trade secrets.
§ 4. Judicial Modification (Reformation Doctrine)
Maryland follows the reformation doctrine, granting courts broad authority to rewrite overbroad non-compete terms. This is the most employer-favorable approach — even a poorly drafted agreement may be reshaped into an enforceable restriction.
§ 5. Statutory Exemptions & Carve-Outs
Maryland law exempts certain workers from non-compete enforcement:
- Veterinarians (limited)
§ 6. Consideration & Contract Formation
Adequate consideration required. Whether this is legally sufficient — especially for agreements presented mid-employment rather than at hiring — is frequently contested.
§ 7. Effect of Involuntary Termination
Not specifically addressed in statute. Courts may apply heightened scrutiny when the employer initiated the termination, particularly for termination without cause or mass layoffs.
Practitioner Notes
Dual threshold: salary AND hourly rate.