{ "type": "practice-guide", "canonical": "https://openagreements.org/practice-guides/non-compete/us/maryland", "links": [ { "rel": "self", "href": "https://openagreements.org/practice-guides/non-compete/us/maryland.json", "type": "application/json" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/maryland", "type": "text/html" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/maryland/markdown", "type": "text/markdown" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/maryland/json", "type": "application/json" } ], "data": { "topic": "non-compete", "state": "maryland", "frontmatter": { "title": "Non-Competes in Maryland", "description": "Maryland enforces non-competes only when the restraint is reasonable under common law, and a statute voids them outright for low-wage, veterinary, and many health care workers.", "state": "Maryland", "lastReviewed": "2026-06-03", "license": "CC BY 4.0", "authors": [ "steven-obiajulu" ], "summary": { "enforceability": "reasonable", "bottomLine": "Maryland enforces an ordinary employee non-compete only if it is reasonable under the Becker common-law test, but a statute voids covenants outright for low-wage, veterinary, and many health care workers.", "keyLaw": "Becker v. Bailey, 268 Md. 93 (1973); Md. Code, Lab. & Empl. § 3-716", "exceptions": "Low-wage ban (≤150% min wage); veterinary ban; health-care ≤$350k ban; high-earner clinician cap (1 yr/10 mi); client/patient-list carve-out", "courtNarrowing": "trimOnly", "appliesToContractors": "unclear", "extendedForBreach": "Unsettled", "maxLength": "No fixed cap for ordinary employees; 1 year for covered health-care", "noticeRequirement": "None", "incomeThreshold": "≤150% minimum wage; health care ≤$350,000", "saleOfBusiness": "Enforced under common-law reasonableness almost as a matter of course, though the controlling authority is old and lightly litigated", "customerNonSolicit": "Client/patient-list carve-out", "employeeNonSolicit": "Becker/Seneca reasonableness test; § 3-716 low-wage void reaches only the signer's own job" }, "about": [ "Maryland non-compete agreements", "Maryland restrictive covenants", "Becker v. Bailey reasonableness test", "Maryland Labor and Employment 3-716 noncompete ban", "Maryland low-wage non-compete ban", "Maryland health care and veterinary non-compete ban", "Maryland Uniform Trade Secrets Act" ], "translations": [ { "language": "中文", "status": "planned" }, { "language": "Español", "status": "planned" }, { "language": "Português", "status": "planned" }, { "language": "Deutsch", "status": "planned" } ], "relatedForm": { "slug": "openagreements-restrictive-covenant-maryland" } }, "questions": [ { "slug": "employee-non-compete-enforceability", "label": "Are employee non-competes enforceable?", "heading": "Are employee non-compete agreements enforceable in Maryland?", "answerText": "Yes, sometimes. Maryland is a reasonableness state, not a general ban state, so an ordinary employee non-compete is enforceable only if the employer has a legally protected interest, the restraint is no wider in scope and duration than reasonably necessary, it does not impose undue hardship on the employee, and it does not violate public policy.", "sources": [ { "id": "seneca-four-part-test", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Seneca One Finance, Inc. v. Bloshuk", "citation": "Seneca One Fin., Inc. v. Bloshuk, 214 F. Supp. 3d 457 (D. Md. 2016).", "url": "https://www.courtlistener.com/opinion/7322313/seneca-one-finance-inc-v-bloshuk/", "deepLink": "https://www.courtlistener.com/opinion/7322313/seneca-one-finance-inc-v-bloshuk/#:~:text=In%20Maryland%2C%20a%20restrictive%20employment,covenant%20cannot%20violate%20public%20policy.%E2%80%9D", "proposition": "Seneca One states Maryland's four-part common-law test for enforcing an employee restrictive covenant.", "verbatimQuote": "In Maryland, a restrictive employment covenant will only be enforced if it meets four requirements: “(1) the employer must have a legally protected interest, (2) the restrictive covenant must be no wider in scope and duration than is reasonably necessary to protect the employer’s interest, (3) the covenant cannot impose an undue hardship on the employee, and (4) the covenant cannot violate public policy.”", "date": "2016-10-06", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-seneca-four-part-test" }, { "id": "becker-general-rule", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Becker v. Bailey", "citation": "Becker v. Bailey, 268 Md. 93 (1973).", "url": "https://www.courtlistener.com/opinion/2322561/becker-v-bailey/", "deepLink": "https://www.courtlistener.com/opinion/2322561/becker-v-bailey/#:~:text=The%20general%20rule%20in%20Maryland,the%20interests%20of%20the%20public.%E2%80%9D", "proposition": "Becker states the Maryland general rule that a covenant is upheld only when limited to what is reasonably necessary to protect the employer without undue hardship or harm to the public.", "verbatimQuote": "The general rule in Maryland is that if a restrictive covenant in an employment contract is supported by adequate consideration and is ancillary to the employment contract, an employee’s agreement not to compete with his employer upon leaving the employment will be upheld “if the restraint is confined within limits which are no wider as to area and duration than are reasonably necessary for the protection of the business of the employer and do not impose undue hardship on the employee or disregard the interests of the public.”", "date": "1973-02-08", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-becker-general-rule" }, { "id": "statute-3716-null-void", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Md. Code, Lab. & Empl. § 3-716", "citation": "Md. Code, Lab. & Empl. § 3-716(a)(3).", "url": "https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gle§ion=3-716", "proposition": "Section 3-716 makes a covered noncompete or conflict-of-interest provision null and void as against Maryland public policy.", "verbatimQuote": "A noncompete or conflict of interest provision in an employment contract or a similar document or agreement that restricts the ability of an employee to enter into employment with a new employer or to become self–employed in the same or similar business or trade shall be null and void as being against the public policy of the State.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-statute-3716-null-void" } ] }, { "slug": "statutory-voids", "label": "Which workers are automatically protected?", "heading": "Which Maryland workers are automatically protected from non-competes?", "answerText": "Section 3-716 voids non-competes outright for employees who earn 150% or less of the State minimum wage, for veterinary practitioners and technicians, and for many licensed health care workers who provide direct patient care and earn $350,000 or less.", "sources": [ { "id": "statute-150-threshold", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Md. Code, Lab. & Empl. § 3-716", "citation": "Md. Code, Lab. & Empl. § 3-716(a)(1)(i)1.", "url": "https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gle§ion=3-716", "proposition": "Section 3-716 applies to employees earning at or below 150% of the State minimum wage.", "verbatimQuote": "an employee who earns equal to or less than 150% of the State minimum wage rate established under § 3–413 of this title", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-statute-150-threshold" }, { "id": "statute-vet-ban", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Md. Code, Lab. & Empl. § 3-716", "citation": "Md. Code, Lab. & Empl. § 3-716(a)(1)(i)3.", "url": "https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gle§ion=3-716", "proposition": "Section 3-716 extends the void-as-against-public-policy rule to veterinary practitioners and technicians.", "verbatimQuote": "an employee licensed as a veterinary practitioner or veterinary technician under Title 2, Subtitle 3 of the Agriculture Article", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-statute-vet-ban" }, { "id": "statute-healthcare-void", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Md. Code, Lab. & Empl. § 3-716", "citation": "Md. Code, Lab. & Empl. § 3-716(a)(1)(i)2.", "url": "https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gle§ion=3-716", "proposition": "Section 3-716 voids covenants for licensed health-occupations employees who provide direct patient care and earn $350,000 or less.", "verbatimQuote": "employment in a position for which the employee: A. is required to be licensed under the Health Occupations Article; B. is employed in a position that provides direct patient care; and C. earns equal to or less than $350,000 in total annual compensation", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-statute-healthcare-void" }, { "id": "statute-minimum-wage", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Md. Code, Lab. & Empl. § 3-413", "citation": "Md. Code, Lab. & Empl. § 3-413(c)(1).", "url": "https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gle§ion=3-413", "proposition": "Section 3-413 sets the State minimum wage at $15.00 per hour beginning January 1, 2024, the figure the § 3-716 threshold is keyed to.", "verbatimQuote": "the State minimum wage rate is: (i) for the 12–month period beginning January 1, 2023, $13.25 per hour; and (ii) beginning January 1, 2024, $15.00 per hour.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-statute-minimum-wage" }, { "id": "hb1388-vet-retroactive", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "2024 Md. Laws ch. 378 (H.B. 1388)", "citation": "2024 Md. Laws ch. 378, § 2 (H.B. 1388).", "url": "https://mgaleg.maryland.gov/2024rs/Chapters_noln/CH_378_hb1388e.pdf", "proposition": "House Bill 1388 makes the veterinary non-compete ban apply retroactively to existing agreements.", "verbatimQuote": "That this Act shall be construed to apply retroactively and shall be applied to and interpreted to affect an employment contract or a similar contract or agreement entered into on or before the effective date of this Act.", "date": "2024-04-25", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-hb1388-vet-retroactive" }, { "id": "hb1388-health-prospective", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "2024 Md. Laws ch. 378 (H.B. 1388)", "citation": "2024 Md. Laws ch. 378, § 3 (H.B. 1388).", "url": "https://mgaleg.maryland.gov/2024rs/Chapters_noln/CH_378_hb1388e.pdf", "proposition": "House Bill 1388 makes the health care expansion of § 3-716 apply only to agreements executed on or after July 1, 2025.", "verbatimQuote": "That § 3–716(a)(1)(i)2 and (b) of the Labor and Employment Article, as enacted by Section 1 of this Act, shall be construed to apply only to employment contracts or similar documents or agreements for employment executed on or after July 1, 2025.", "date": "2024-04-25", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-hb1388-health-prospective" } ] }, { "slug": "healthcare-high-earners", "label": "How does the cap work for high-earning clinicians?", "heading": "How are non-competes capped for high-earning Maryland health care workers?", "answerText": "For a direct-patient-care health care employee who earns more than $350,000, a covenant is not void but is capped: it cannot run longer than one year or reach more than ten miles from the primary place of employment.", "sources": [ { "id": "statute-highearner-bucket", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Md. Code, Lab. & Empl. § 3-716", "citation": "Md. Code, Lab. & Empl. § 3-716(b)(1).", "url": "https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gle§ion=3-716", "proposition": "Section 3-716(b) applies the one-year and ten-mile cap to direct-patient-care health care employees who earn more than $350,000.", "verbatimQuote": "This subsection applies only to an employment contract or similar document or agreement concerning employment in a position for which the employee: (i) is required to be licensed under the Health Occupations Article; (ii) is employed in a position that provides direct patient care; and (iii) earns more than $350,000 in total annual compensation.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-statute-highearner-bucket" }, { "id": "becker-highearner-reasonableness", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Becker v. Bailey", "citation": "Becker v. Bailey, 268 Md. 93 (1973).", "url": "https://www.courtlistener.com/opinion/2322561/becker-v-bailey/", "deepLink": "https://www.courtlistener.com/opinion/2322561/becker-v-bailey/#:~:text=The%20general%20rule%20in%20Maryland,the%20interests%20of%20the%20public.%E2%80%9D", "proposition": "Becker's common-law reasonableness requirement still governs a covenant that falls within § 3-716(b)'s statutory cap.", "verbatimQuote": "The general rule in Maryland is that if a restrictive covenant in an employment contract is supported by adequate consideration and is ancillary to the employment contract, an employee’s agreement not to compete with his employer upon leaving the employment will be upheld “if the restraint is confined within limits which are no wider as to area and duration than are reasonably necessary for the protection of the business of the employer and do not impose undue hardship on the employee or disregard the interests of the public.”", "date": "1973-02-08", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-becker-highearner-reasonableness" }, { "id": "statute-cap-duration", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Md. Code, Lab. & Empl. § 3-716", "citation": "Md. Code, Lab. & Empl. § 3-716(b)(2)(i).", "url": "https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gle§ion=3-716", "proposition": "Section 3-716 caps a covered high-earner health care covenant at one year from the last day of employment.", "verbatimQuote": "The period for which a noncompete or conflict of interest provision in an employment contract or similar document or agreement is in effect may not exceed 1 year from the last day of employment.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-statute-cap-duration" }, { "id": "statute-cap-geography", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Md. Code, Lab. & Empl. § 3-716", "citation": "Md. Code, Lab. & Empl. § 3-716(b)(2)(ii).", "url": "https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gle§ion=3-716", "proposition": "Section 3-716 caps the geographic reach of a covered high-earner health care covenant at ten miles from the primary place of employment.", "verbatimQuote": "The geographical restriction in a noncompete or conflict of interest provision in an employment contract or similar document or agreement may not exceed 10 miles from the primary place of employment.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-statute-cap-geography" }, { "id": "statute-patient-notice", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Md. Code, Lab. & Empl. § 3-716", "citation": "Md. Code, Lab. & Empl. § 3-716(b)(3).", "url": "https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gle§ion=3-716", "proposition": "Section 3-716 requires patient notice of a departing clinician's new location on request.", "verbatimQuote": "On request of a patient, an employer of an employee described in paragraph (1) of this subsection shall provide notice to a patient of the new location where a former employee will be practicing.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-statute-patient-notice" } ] }, { "slug": "protectable-interests", "label": "What interests are protectable?", "heading": "What legitimate business interests can support a Maryland non-compete?", "answerText": "Maryland enforces a covenant only to protect genuine interests such as unique services, trade secrets, customer routes or lists, and customer goodwill — not to prevent ordinary competition.", "sources": [ { "id": "becker-protectable-interests", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Becker v. Bailey", "citation": "Becker v. Bailey, 268 Md. 93 (1973).", "url": "https://www.courtlistener.com/opinion/2322561/becker-v-bailey/", "deepLink": "https://www.courtlistener.com/opinion/2322561/becker-v-bailey/#:~:text=These%20decisions%20demonstrate%20that%20Maryland,clients%2C%20or%20solicitation%20of%20customers.", "proposition": "Becker limits enforceable Maryland covenants to those protecting unique services, trade secrets, routes or client lists, or against solicitation of customers.", "verbatimQuote": "These decisions demonstrate that Maryland follows the general rule that restrictive covenants may be applied and enforced only against those employees who provide unique services, or to prevent the future misuse of trade secrets, routes or lists of clients, or solicitation of customers.", "date": "1973-02-08", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-becker-protectable-interests" }, { "id": "fowler-no-broader-than-necessary", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Fowler v. Printers II, Inc.", "citation": "Fowler v. Printers II, Inc., 89 Md. App. 448 (1991).", "url": "https://www.courtlistener.com/opinion/1930228/fowler-v-printers-ii-inc/", "deepLink": "https://www.courtlistener.com/opinion/1930228/fowler-v-printers-ii-inc/#:~:text=Of%20course%2C%20even%20a%20restrictive,necessary%20to%20effectuate%20that%20interest.", "proposition": "Fowler holds that even a covenant serving a legitimate interest can be no broader or more restrictive than necessary to effectuate that interest.", "verbatimQuote": "Of course, even a restrictive covenant that serves an employer’s “legitimate interest” can be no broader, or more restrictive, than necessary to effectuate that interest.", "date": "1991-12-03", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-fowler-no-broader-than-necessary" }, { "id": "statute-client-list-carveout", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Md. Code, Lab. & Empl. § 3-716", "citation": "Md. Code, Lab. & Empl. § 3-716(a)(2).", "url": "https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gle§ion=3-716", "proposition": "Section 3-716(a)'s void rule does not reach provisions about the taking or use of a client or patient list or other proprietary client information.", "verbatimQuote": "This subsection does not apply to an employment contract or a similar document or agreement with respect to the taking or use of a client or patient list or other proprietary client–related or patient–related information.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-statute-client-list-carveout" } ] }, { "slug": "duration-limits", "label": "How much time and territory are reasonable?", "heading": "What duration and geographic scope are reasonable for a Maryland non-compete?", "answerText": "Outside the § 3-716 categories there is no fixed cap for ordinary employees. Maryland courts judge time and territory case by case, asking whether the restraint is reasonable on the specific facts.", "sources": [ { "id": "ruhl-no-yardstick", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Ruhl v. F. A. Bartlett Tree Expert Co.", "citation": "Ruhl v. F. A. Bartlett Tree Expert Co., 245 Md. 118 (1967).", "url": "https://www.courtlistener.com/opinion/2292892/ruhl-v-f-a-bartlett-tree-expert-co/", "deepLink": "https://www.courtlistener.com/opinion/2292892/ruhl-v-f-a-bartlett-tree-expert-co/#:~:text=There%20is%20no%20arbitrary%20yardstick,the%20interest%20of%20the%20public.", "proposition": "Ruhl holds that Maryland reasonableness analysis is fact-specific, with no fixed yardstick for necessity, hardship, or public interest.", "verbatimQuote": "There is no arbitrary yardstick as to what protection of the business of the employer is reasonably necessary, no categorical measurement of what constitutes undue hardship on the employee, no precise scales to weigh the interest of the public.", "date": "1967-01-05", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-ruhl-no-yardstick" }, { "id": "seneca-overbroad", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Seneca One Finance, Inc. v. Bloshuk", "citation": "Seneca One Fin., Inc. v. Bloshuk, 214 F. Supp. 3d 457 (D. Md. 2016).", "url": "https://www.courtlistener.com/opinion/7322313/seneca-one-finance-inc-v-bloshuk/", "deepLink": "https://www.courtlistener.com/opinion/7322313/seneca-one-finance-inc-v-bloshuk/#:~:text=A%20restrictive%20covenant%20is%20overbroad,the%20employer%E2%80%99s%20legally%20protected%20interest.", "proposition": "Seneca One defines overbreadth as a restraint exceeding what is reasonably necessary to protect the employer's legally protected interest.", "verbatimQuote": "A restrictive covenant is overbroad if it exceeds the limits of what is reasonably necessary to protect the employer’s legally protected interest.", "date": "2016-10-06", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-seneca-overbroad" }, { "id": "medispec-facially-overbroad", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Medispec, Ltd. v. Chouinard", "citation": "Medispec, Ltd. v. Chouinard, 133 F. Supp. 3d 771 (D. Md. 2015).", "url": "https://www.courtlistener.com/opinion/7315898/medispec-ltd-v-chouinard/", "deepLink": "https://www.courtlistener.com/opinion/7315898/medispec-ltd-v-chouinard/#:~:text=Here%2C%20an%20examination%20of%20the,overly%20broad%20on%20its%20face.", "proposition": "Medispec holds a covenant unenforceable on its face where the prohibited activity is overly broad.", "verbatimQuote": "Here, an examination of the particular facts is not necessary because the clause is overly broad on its face.", "date": "2015-09-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-medispec-facially-overbroad" } ] }, { "slug": "continued-employment-consideration", "label": "Does continued employment count?", "heading": "Is continued at-will employment enough consideration for a Maryland non-compete?", "answerText": "Yes. Maryland treats an employer's agreement to continue an at-will employee as sufficient consideration for a covenant signed after employment begins.", "sources": [ { "id": "simko-mutuality", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Simko, Inc. v. Graymar Co.", "citation": "Simko, Inc. v. Graymar Co., 55 Md. App. 561 (1983).", "url": "https://www.courtlistener.com/opinion/1983736/simko-inc-v-graymar-co/", "deepLink": "https://www.courtlistener.com/opinion/1983736/simko-inc-v-graymar-co/#:~:text=Given%20the%20inherent%20mutuality%2C%20we,employer%E2%80%99s%20consent%20not%20to%20terminate.", "proposition": "Simko holds that an employer's consent not to terminate an at-will employee can be consideration for a covenant, given the mutuality of the at-will relationship.", "verbatimQuote": "Given the inherent mutuality, we see no basis for distinguishing the employee’s consent to continue from the flip side of the coin — the employer’s consent not to terminate.", "date": "1983-09-09", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-simko-mutuality" }, { "id": "simko-minority-view", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Simko, Inc. v. Graymar Co.", "citation": "Simko, Inc. v. Graymar Co., 55 Md. App. 561 (1983).", "url": "https://www.courtlistener.com/opinion/1983736/simko-inc-v-graymar-co/", "deepLink": "https://www.courtlistener.com/opinion/1983736/simko-inc-v-graymar-co/#:~:text=the%20viewpoint%20which%20holds%20that,compete%20represents%20the%20distinct%20minority.", "proposition": "Simko characterizes the view that continued at-will employment is not sufficient consideration as the distinct minority position.", "verbatimQuote": "the viewpoint which holds that continuation of an at-will employee is not sufficient consideration for a covenant not to compete represents the distinct minority.", "date": "1983-09-09", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-simko-minority-view" } ] }, { "slug": "court-narrowing", "label": "Will Maryland courts narrow overbroad covenants?", "heading": "Will a Maryland court blue-pencil or rewrite an overbroad non-compete?", "answerText": "Maryland courts blue-pencil rather than rewrite. A court may strike an offending, severable portion of a covenant and enforce what remains, but if the unreasonable language is not severable the whole covenant fails — and employers cannot count on a court redrafting an indivisible overbroad term into a new, enforceable one.", "sources": [ { "id": "holloway-blue-pencil", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Holloway v. Faw, Casson & Co.", "citation": "Holloway v. Faw, Casson & Co., 78 Md. App. 205 (1989), aff'd in part & rev'd in part, 319 Md. 324 (1990).", "url": "https://www.courtlistener.com/opinion/1991703/holloway-v-faw-casson-co/", "deepLink": "https://www.courtlistener.com/opinion/1991703/holloway-v-faw-casson-co/#:~:text=The%20typical%20response%20in%20the,the%20entire%20agreement%20is%20void.", "proposition": "Holloway describes Maryland's blue-pencil practice: strike severable invalid portions and enforce the rest, or void the whole covenant if the invalid portion is not severable.", "verbatimQuote": "The typical response in the reported appellate decisions in this State, in which the Courts have ruled a portion of an employee noncompetition agreement invalid, has been to “blue pencil” (cross out) the violative portions of the agreement and, if the excised portions of the agreement are severable, to permit the agreement to stand minus the unenforceable wording; otherwise the entire agreement is void.", "date": "1989-02-06", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-holloway-blue-pencil" }, { "id": "holloway-mechanical-rule", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Holloway v. Faw, Casson & Co.", "citation": "Holloway v. Faw, Casson & Co., 78 Md. App. 205 (1989), aff'd in part & rev'd in part, 319 Md. 324 (1990).", "url": "https://www.courtlistener.com/opinion/1991703/holloway-v-faw-casson-co/", "deepLink": "https://www.courtlistener.com/opinion/1991703/holloway-v-faw-casson-co/#:~:text=By%20this%20rule%2C%20the%20divisibility,%E2%80%9Cblue%20penciled%E2%80%9D%20will%20be%20enforced.", "proposition": "Holloway describes the strict blue-pencil rule as a mechanical test that enforces a covenant only if excess restraint can be crossed out leaving a complete, valid contract.", "verbatimQuote": "By this rule, the divisibility of a promise in excessive restraint of trade is determined by purely mechanical means: if the promise is so worded that the excessive restraint can be eliminated by crossing out a few of the words with a “blue pencil,” while at the same time the remaining words constitute a complete and valid contract, the contract as thus “blue penciled” will be enforced.", "date": "1989-02-06", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-holloway-mechanical-rule" }, { "id": "hebb-severable-partial-enforcement", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Hebb v. Stump, Harvey & Cook, Inc.", "citation": "Hebb v. Stump, Harvey & Cook, Inc., 25 Md. App. 478 (1975).", "url": "https://www.courtlistener.com/opinion/2195970/hebb-v-stump-harvey-cook-inc/", "deepLink": "https://www.courtlistener.com/opinion/2195970/hebb-v-stump-harvey-cook-inc/#:~:text=In%20the%20instant%20case%20the,severable%20and%20thus%20partially%20enforceable.", "proposition": "Hebb holds that an overbroad restriction not logically inseparable from the rest of the contract is severable and partially enforceable where partial enforcement works no injury to the public and no injustice to the parties.", "verbatimQuote": "In the instant case the partial enforcement of the restrictions works no injury to the public and creates no injustice to the parties, thus the restrictions are severable and thus partially enforceable.", "date": "1975-04-03", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-hebb-severable-partial-enforcement" } ] }, { "slug": "trade-secrets-mutsa", "label": "How does trade-secret law fit in?", "heading": "How does the Maryland Uniform Trade Secrets Act protect employers when a covenant is void?", "answerText": "The Maryland Uniform Trade Secrets Act gives employers a separate remedy that does not depend on a non-compete. It defines what counts as a trade secret, authorizes injunctions against misappropriation, and allows damages including exemplary damages for willful, malicious conduct.", "sources": [ { "id": "mutsa-trade-secret-definition", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Md. Code, Com. Law § 11-1201", "citation": "Md. Code, Com. Law § 11-1201(e).", "url": "https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gcl§ion=11-1201", "proposition": "Section 11-1201 defines a trade secret as information with independent economic value from secrecy that is subject to reasonable secrecy efforts.", "verbatimQuote": "“Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-mutsa-trade-secret-definition" }, { "id": "mutsa-injunction", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Md. Code, Com. Law § 11-1202", "citation": "Md. Code, Com. Law § 11-1202(a).", "url": "https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gcl§ion=11-1202", "proposition": "Section 11-1202 authorizes injunctions against actual or threatened trade-secret misappropriation.", "verbatimQuote": "Actual or threatened misappropriation may be enjoined.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-mutsa-injunction" }, { "id": "mutsa-exemplary-damages", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Md. Code, Com. Law § 11-1203", "citation": "Md. Code, Com. Law § 11-1203(d).", "url": "https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gcl§ion=11-1203", "proposition": "Section 11-1203 allows exemplary damages up to twice the compensatory award for willful and malicious misappropriation.", "verbatimQuote": "If willful and malicious misappropriation exists, the court may award exemplary damages in an amount not exceeding twice any award made under subsection (a) of this section.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-mutsa-exemplary-damages" }, { "id": "ingram-liquidated-not-bar", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Ingram v. Cantwell-Cleary Co.", "citation": "Ingram v. Cantwell-Cleary Co., 259 Md. App. 102 (2023).", "url": "https://www.courtlistener.com/opinion/9454756/ingram-v-cantwell-cleary-co/", "deepLink": "https://www.courtlistener.com/opinion/9454756/ingram-v-cantwell-cleary-co/#:~:text=We%20hold%20that%20the%20court,its%20separate%20claims%20for%20misappropriation", "proposition": "Ingram holds that a non-compete's liquidated-damages provisions did not bar a separate recovery for trade-secret misappropriation under MUTSA.", "verbatimQuote": "We hold that the court did not err in declining to enforce the liquidated damages provisions contained in Appellants’ Non-Compete Agreements because they did not bar Cantwell-Cleary from recovering damages under its separate claims for misappropriation", "date": "2023-12-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-ingram-liquidated-not-bar" }, { "id": "ingram-trade-secret-finding", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Ingram v. Cantwell-Cleary Co.", "citation": "Ingram v. Cantwell-Cleary Co., 259 Md. App. 102 (2023).", "url": "https://www.courtlistener.com/opinion/9454756/ingram-v-cantwell-cleary-co/", "deepLink": "https://www.courtlistener.com/opinion/9454756/ingram-v-cantwell-cleary-co/#:~:text=We%20also%20hold%20that%20the,Appellants%20had%20misappropriated%20that%20information.", "proposition": "Ingram upholds findings that confidential customer lists and pricing information were trade secrets that the former employees misappropriated.", "verbatimQuote": "We also hold that the court did not err in finding that Cantwell-Cleary’s confidential customer lists and pricing information constituted trade secrets and that Appellants had misappropriated that information.", "date": "2023-12-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-ingram-trade-secret-finding" } ] }, { "slug": "employee-non-solicitation", "label": "How are employee non-solicits treated?", "heading": "How does Maryland treat employee non-solicitation covenants?", "answerText": "With no Maryland appellate decision squarely on employee anti-raiding in our review, such a covenant would be judged under Maryland's general reasonableness test — enforceable only if no broader than reasonably necessary to protect a legitimate interest, without undue hardship or harm to the public.", "sources": [ { "id": "md-ens-becker", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Becker v. Bailey", "citation": "Becker v. Bailey, 268 Md. 93 (1973).", "url": "https://www.courtlistener.com/opinion/2322561/becker-v-bailey/", "deepLink": "https://www.courtlistener.com/opinion/2322561/becker-v-bailey/#:~:text=The%20general%20rule%20in%20Maryland,the%20interests%20of%20the%20public.%E2%80%9D", "proposition": "Becker states the Maryland general rule that a covenant is upheld only when limited to what is reasonably necessary to protect the employer without undue hardship or harm to the public.", "verbatimQuote": "The general rule in Maryland is that if a restrictive covenant in an employment contract is supported by adequate consideration and is ancillary to the employment contract, an employee’s agreement not to compete with his employer upon leaving the employment will be upheld “if the restraint is confined within limits which are no wider as to area and duration than are reasonably necessary for the protection of the business of the employer and do not impose undue hardship on the employee or disregard the interests of the public.”", "date": "1973-02-08", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-md-ens-becker" }, { "id": "md-ens-seneca", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Seneca One Finance, Inc. v. Bloshuk", "citation": "Seneca One Fin., Inc. v. Bloshuk, 214 F. Supp. 3d 457 (D. Md. 2016).", "url": "https://www.courtlistener.com/opinion/7322313/seneca-one-finance-inc-v-bloshuk/", "deepLink": "https://www.courtlistener.com/opinion/7322313/seneca-one-finance-inc-v-bloshuk/#:~:text=In%20Maryland%2C%20a%20restrictive%20employment,covenant%20cannot%20violate%20public%20policy.%E2%80%9D", "proposition": "Seneca One states Maryland's four-part common-law test for enforcing an employee restrictive covenant.", "verbatimQuote": "In Maryland, a restrictive employment covenant will only be enforced if it meets four requirements: “(1) the employer must have a legally protected interest, (2) the restrictive covenant must be no wider in scope and duration than is reasonably necessary to protect the employer’s interest, (3) the covenant cannot impose an undue hardship on the employee, and (4) the covenant cannot violate public policy.”", "date": "2016-10-06", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-md-ens-seneca" }, { "id": "md-ens-3716", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Md. Code, Lab. & Empl. § 3-716", "citation": "Md. Code, Lab. & Empl. § 3-716(a)(3).", "url": "https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gle§ion=3-716", "proposition": "Section 3-716 voids only a provision restricting the signer's own ability to take new employment or become self-employed, so it does not reach an employee anti-raiding covenant.", "verbatimQuote": "A noncompete or conflict of interest provision in an employment contract or a similar document or agreement that restricts the ability of an employee to enter into employment with a new employer or to become self–employed in the same or similar business or trade shall be null and void as being against the public policy of the State.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-md-ens-3716" } ] }, { "slug": "extended-for-breach", "label": "Does Maryland toll a non-compete?", "heading": "Does a Maryland non-compete toll or extend during breach or litigation?", "answerText": "This is an open Maryland question. No staged Maryland statute or appellate decision squarely endorses automatic judicial tolling or enforcement of an extension-on-breach clause after the stated restricted period expires.", "sources": [ { "id": "ruhl-reasonableness-backdrop", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Ruhl v. F. A. Bartlett Tree Expert Co.", "citation": "Ruhl v. F. A. Bartlett Tree Expert Co., 245 Md. 118 (1967).", "url": "https://www.courtlistener.com/opinion/2292892/ruhl-v-f-a-bartlett-tree-expert-co/", "deepLink": "https://www.courtlistener.com/opinion/2292892/ruhl-v-f-a-bartlett-tree-expert-co/#:~:text=Covenants%20of%20this%20nature%20are,reasonable%20on%20the%20specific%20facts.", "proposition": "Ruhl supports applying Maryland's reasonableness test to any restraint, including one that would extend the restricted period.", "verbatimQuote": "Covenants of this nature are in restraint of trade; the test is whether the particular restraint is reasonable on the specific facts.", "date": "1967-01-05", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-ruhl-reasonableness-backdrop" }, { "id": "becker-reasonableness-backdrop", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Becker v. Bailey", "citation": "Becker v. Bailey, 268 Md. 93 (1973).", "url": "https://www.courtlistener.com/opinion/2322561/becker-v-bailey/", "deepLink": "https://www.courtlistener.com/opinion/2322561/becker-v-bailey/#:~:text=The%20general%20rule%20in%20Maryland,the%20interests%20of%20the%20public.%E2%80%9D", "proposition": "Becker supports measuring any extension of a restraint against Maryland's requirement that the restraint be no wider than reasonably necessary without undue hardship or harm to the public.", "verbatimQuote": "The general rule in Maryland is that if a restrictive covenant in an employment contract is supported by adequate consideration and is ancillary to the employment contract, an employee’s agreement not to compete with his employer upon leaving the employment will be upheld “if the restraint is confined within limits which are no wider as to area and duration than are reasonably necessary for the protection of the business of the employer and do not impose undue hardship on the employee or disregard the interests of the public.”", "date": "1973-02-08", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-becker-reasonableness-backdrop" } ] }, { "slug": "federal-ftc-overlay", "label": "Did the FTC rule change Maryland law?", "heading": "Did the FTC's federal non-compete rule change Maryland non-compete law?", "answerText": "No. A federal court set aside the FTC's 2024 nationwide Non-Compete Rule, so Maryland non-competes remain governed by Maryland's statute, Maryland common law, and the state's trade-secret act.", "sources": [ { "id": "ryan-rule-set-aside", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Ryan LLC v. Federal Trade Commission", "citation": "Ryan LLC v. Fed. Trade Comm'n, 746 F. Supp. 3d 369 (N.D. Tex. 2024).", "url": "https://www.courtlistener.com/opinion/10205745/ryan-llc-v-federal-trade-commission/", "deepLink": "https://www.courtlistener.com/opinion/10205745/ryan-llc-v-federal-trade-commission/#:~:text=The%20Rule%20shall%20not%20be%20enforced%20or%20otherwise%20take%20effect%20on%20its%20effective%20date%20of%20September%204%2C%202024%2C%20or%20thereafter.", "proposition": "Ryan set aside the FTC Non-Compete Rule and held it would not be enforced or take effect.", "verbatimQuote": "The Rule shall not be enforced or otherwise take effect on its effective date of September 4, 2024, or thereafter.", "date": "2024-08-20", "pullQuoteLocator": "The Rule shall not be enforced or otherwise take effect on its effective date of September 4, 2024, or thereafter.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-ryan-rule-set-aside" } ] }, { "slug": "recent-amendments", "label": "What recent changes should employers watch?", "heading": "What recent Maryland non-compete changes should employers watch?", "answerText": "The most recent enacted change is House Bill 1016 (2026), now Chapter 301. It is enacted but not yet effective: beginning October 1, 2026, it extends § 3-716's void rule to a new, narrow category — employees of a licensed architect whose employer, after employing more than 30 workers based mainly in Maryland, relocates the majority of that workforce out of state or no longer has its principal place of business in Maryland.", "sources": [ { "id": "hb1016-architect-out-of-state", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "2026 Md. Laws ch. 301 (H.B. 1016)", "citation": "2026 Md. Laws ch. 301, § 2 (H.B. 1016).", "url": "https://mgaleg.maryland.gov/2026rs/Chapters_noln/CH_301_hb1016e.pdf", "proposition": "House Bill 1016 (Chapter 301) adds a new § 3-716 category, effective October 1, 2026, for employees of a licensed architect whose employer relocates a formerly Maryland-based workforce out of state, and applies only to agreements executed on or after the Act's effective date.", "verbatimQuote": "That § 3–716(a)(1)(i)3 of the Labor and Employment Article, as enacted by Section 1 of this Act, shall be construed to apply only to employment contracts or similar documents or agreements for employment executed on or after the effective date of this Act.", "date": "2026-04-28", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-hb1016-architect-out-of-state" }, { "id": "sb591-2023-threshold", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "2023 Md. Laws ch. 266 (S.B. 591)", "citation": "2023 Md. Laws ch. 266 (S.B. 591).", "url": "https://mgaleg.maryland.gov/2023rs/Chapters_noln/CH_266_sb0591t.pdf", "proposition": "Senate Bill 591 (Chapter 266) altered the application of § 3-716's noncompete prohibition in 2023, effective October 1, 2023 — the amendment that keyed the low-wage threshold to the State minimum wage.", "verbatimQuote": "FOR the purpose of altering the application of the prohibition on including a noncompete or conflict of interest provision in an employment contract or similar document or agreement", "date": "2023-05-03", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-sb591-2023-threshold" } ] }, { "slug": "sale-of-business", "label": "How are sale-of-business covenants treated?", "heading": "Are sale-of-business non-competes judged differently in Maryland?", "answerText": "Yes — though on old authority. Maryland has no non-compete statute, and a covenant a seller gives when selling a business and its goodwill is enforced under common-law reasonableness far more readily than an employee covenant. The leading Maryland decisions are old and lightly litigated, so treat this as well-settled but dated.", "sources": [ { "id": "anderson-matter-of-course", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Anderson v. Truitt", "citation": "Anderson v. Truitt, 158 Md. 193, 148 A. 223 (1930).", "url": "https://www.courtlistener.com/opinion/3485410/anderson-v-truitt/", "deepLink": "https://www.courtlistener.com/opinion/3485410/anderson-v-truitt/#:~:text=purchasers%20of%20the%20business%20are%2C,them%20in%20their%20contract%20rights.", "proposition": "The Maryland Court of Appeals stated that purchasers of a business are, as a general rule and almost as a matter of course, entitled to injunctive enforcement of a seller's reasonable covenant supported by consideration and confined to a reasonable area.", "verbatimQuote": "purchasers of the business are, as a general rule, and almost as a matter of course, entitled to the aid of a court of equity by injunction to secure them in their contract rights.", "date": "1930-01-09", "anchor": "https://openagreements.org/practice-guides/non-compete/us/maryland#src-anderson-matter-of-course" } ] } ] } }