Maryland enacted strong worker protections against non-compete agreements with Md. Code, Lab. & Empl. § 3-716, effective October 1, 2019. The law automatically voids non-competes for low-wage workers earning at or below a threshold tied to the state minimum wage (approximately $31,200 per year, but the threshold increases as Maryland’s minimum wage rises). For workers above the threshold, Maryland law still requires that non-competes be reasonable in scope, duration, and geography.
A key feature: Maryland’s income threshold is tied directly to the state minimum wage, which increases annually. This means the threshold amount adjusts every year, providing growing protection as the minimum wage increases. Workers should check the current threshold before assuming their non-compete is enforceable.
Key Facts
| Factor | Details |
|---|---|
| Enforceability | Void for workers earning ≤ 150% of state minimum wage (~$31,200) |
| Max Duration | 2 years typical (for workers above threshold) |
| Income Threshold | ≤ $15/hour or ≤ 150% of state minimum wage annually |
| Blue-Pencil Reform | Not specified; reform focus on income threshold |
| Garden Leave | Not required; workers not paid during restriction |
What Makes a Non-Compete Enforceable in Maryland
Under § 3-716, a non-compete is void if the employee earns at or below 150% of Maryland’s state minimum wage annually. For 2024, this threshold is approximately $31,200 per year (based on the state minimum wage of $15/hour). However, because Maryland’s minimum wage increases annually, the threshold amount also increases each year. You must check the current threshold to determine whether your income qualifies for protection.
For workers earning above the threshold, non-competes are enforceable if they protect legitimate business interests—trade secrets, confidential information, or substantial customer relationships. The restriction must be reasonable in time, geography, and scope.
Importantly, § 3-716 applies only to agreements signed on or after October 1, 2019. Non-competes signed before that date are subject to Maryland’s prior common law standards, which may be different.
Income Thresholds and Worker Exemptions
Maryland’s income threshold is the most powerful protection in the statute. If you earn at or below 150% of the state minimum wage—currently approximately $31,200 per year—your non-compete is void, regardless of any other terms. This covers a substantial portion of Maryland’s workforce, including many retail workers, service industry employees, administrative staff, and entry-level professionals.
The threshold increases annually as Maryland’s minimum wage increases, providing growing protection. For example, if Maryland increases its minimum wage to $16/hour in future years, the threshold would increase proportionally. Always check the current year’s threshold.
Wages for this calculation include regular hourly wages and do not include bonuses or stock options. An employee earning $30,000 in base salary plus a $5,000 bonus would have a base income of $30,000 for threshold purposes.
What Happens If You Violate One
If you violate a non-compete that meets Maryland’s requirements, your former employer can seek an injunction and sue for damages. However, Maryland’s protections provide significant defenses: if your income is at or below the threshold, the non-compete is automatically void; if the agreement was signed before October 1, 2019, different rules may apply.
Even if your non-compete meets the threshold requirement, Maryland courts apply reasonableness standards. Overly broad restrictions may be limited or voided.
Real Situations in Maryland
A warehouse worker earning $28,000 per year in Baltimore signed a non-compete prohibiting work for any logistics company within 20 miles for two years. When laid off, she immediately took a position with a rival logistics firm. The former employer threatened legal action. The non-compete was void because her income fell below Maryland’s current threshold of approximately $31,200. She was free to work.
A software developer earning $85,000 per year in Bethesda signed a non-compete on January 15, 2020 (after the October 1, 2019 effective date). The agreement prohibited work for any software company in Maryland for two years. When he left, his former employer sued. Because the non-compete was signed after the October 1, 2019 effective date and his income exceeded the threshold, the agreement was evaluated under § 3-716. The court found the restriction reasonable—it protected trade secrets and customer relationships, was limited to two years, and was reasonable in scope. The non-compete was enforceable.
A restaurant manager earning $35,000 per year in Silver Spring signed a non-compete on September 1, 2019 (before § 3-716 took effect on October 1, 2019). The agreement prohibited work for any restaurant within 10 miles for two years. When she left in 2021, the former employer sued. Because the non-compete was signed before the October 1, 2019 effective date, it was evaluated under Maryland’s prior common law standards, not the new statute. Depending on the specific circumstances and prior case law, the non-compete may or may not have been enforceable. She should have consulted an attorney experienced in pre-2019 Maryland non-compete law.
Common Mistakes Maryland Employees Make
Not checking the current income threshold: Maryland’s threshold is tied to the state minimum wage and increases annually. Do not assume the current threshold is the same as previous years. Check the Maryland Department of Labor website for the current year’s threshold.
Assuming a non-compete signed before October 1, 2019 is subject to the statute: The law applies only to agreements signed on or after October 1, 2019. Older non-competes are evaluated under Maryland’s prior common law standards, which may offer fewer protections. Consult an attorney if your non-compete predates the statute.
Overlooking income calculation nuances: For threshold purposes, use your base salary, not total compensation including bonuses. If you’re unclear about how to calculate your income, consult an attorney.
What to Do If You Have a Non-Compete
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Determine the current year’s income threshold. Check the Maryland Department of Labor website for the current threshold (150% of state minimum wage). As of 2024, this is approximately $31,200 per year, but it increases annually.
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Compare your income to the threshold. If you earn at or below the threshold, your non-compete is void. You can work for a competitor without concern.
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Check the signature date of your non-compete. Does it bear a date on or after October 1, 2019? If signed before that date, different rules may apply. Consult an attorney if your agreement predates the statute.
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Assess reasonableness if you earn above the threshold. If the non-compete meets the threshold requirement, evaluate whether it’s reasonable in duration, geography, and scope. Maryland courts will enforce reasonable restrictions.
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Consult a Maryland employment attorney if unsure. An attorney can quickly assess whether your non-compete violates § 3-716 or is unenforceable for other reasons. If it violates the statute, you’re free to work.
Maryland Department of Labor: mdle.maryland.gov
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Disclaimer
This article provides general information about non-compete laws in Maryland and is not a substitute for legal advice. Employment law is complex and varies by situation. If you face a non-compete dispute, consult a qualified employment attorney licensed in Maryland who can review your specific agreement and circumstances.