Are employee non-compete agreements enforceable in Maryland?
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. On a touch screen, a tap shows all 2 sources in this group.
The common-law test traces to Becker v. Bailey and is restated in modern federal decisions applying Maryland law. In practice the recurring questions are protectable interest, scope and duration, hardship on the employee, and the public interest. On a touch screen, a tap shows all 2 sources in this group.
Maryland layers a statute on top of that common-law test. Labor and Employment § 3-716 makes a covenant null and void for whole categories of workers — low-wage employees, veterinary professionals, and many health care workers — before ordinary reasonableness balancing ever applies .
Do not treat Maryland as a pure reasonableness state or as a total-ban state. Start with the worker's wage and occupation, apply § 3-716 if the worker is covered, and only then run the common-law reasonableness test on any covenant that survives. On a touch screen, a tap shows all 2 sources in this group.
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Seneca One states Maryland's four-part common-law test for enforcing an employee restrictive covenant.
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.”
See Seneca One Fin., Inc. v. Bloshuk, 214 F. Supp. 3d 457 (D. Md. 2016).
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.
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.”
See Becker v. Bailey, 268 Md. 93 (1973).
Section 3-716 makes a covered noncompete or conflict-of-interest provision null and void as against Maryland public policy.
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.
See Md. Code, Lab. & Empl. § 3-716(a)(3).
Which Maryland workers are automatically protected from non-competes?
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. On a touch screen, a tap shows all 3 sources in this group.
The wage line is keyed to the State minimum wage in § 3-413, which has been $15.00 per hour since January 1, 2024, so the covered ceiling is $22.50 per hour . A covenant against any employee at or below that 150% line is void .
The 2024 amendment in House Bill 1388 added two occupation-based bans. The statute voids covenants for licensed health-occupations employees who provide direct patient care and earn $350,000 or less, and that health care expansion applies only to agreements executed on or after July 1, 2025. On a touch screen, a tap shows all 2 sources in this group.
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Section 3-716 applies to employees earning at or below 150% of the State minimum wage.
an employee who earns equal to or less than 150% of the State minimum wage rate established under § 3–413 of this title
See Md. Code, Lab. & Empl. § 3-716(a)(1)(i)1.
Section 3-716 extends the void-as-against-public-policy rule to veterinary practitioners and technicians.
an employee licensed as a veterinary practitioner or veterinary technician under Title 2, Subtitle 3 of the Agriculture Article
See Md. Code, Lab. & Empl. § 3-716(a)(1)(i)3.
Section 3-716 voids covenants for licensed health-occupations employees who provide direct patient care and earn $350,000 or less.
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
See Md. Code, Lab. & Empl. § 3-716(a)(1)(i)2.
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.
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.
See Md. Code, Lab. & Empl. § 3-413(c)(1).
House Bill 1388 makes the health care expansion of § 3-716 apply only to agreements executed on or after July 1, 2025.
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.
See 2024 Md. Laws ch. 378, § 3 (H.B. 1388).
How are non-competes capped for high-earning Maryland health care workers?
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. On a touch screen, a tap shows all 3 sources in this group.
The statute draws a line at $350,000 in total annual compensation. At or below that figure the covenant is void; above it, the high-earner bucket applies and the employer may use a covenant only within the statutory one-year and ten-mile limits. On a touch screen, a tap shows all 3 sources in this group.
Staying inside the cap is necessary, not sufficient. Section 3-716(b) sets outer limits; it does not guarantee enforceability, so a covenant within the cap still has to satisfy the ordinary common-law reasonableness test .
A Maryland high-earner clinician covenant that runs beyond one year or reaches more than ten miles from the primary practice site sits outside the ceiling § 3-716(b) sets, so a term or radius carried over from a longer general-purpose covenant is unenforceable to the extent it exceeds the cap. The statutory cap also carries a patient-notice process the covenant depends on. On a touch screen, a tap shows all 2 sources in this group.
There is also a patient-notice duty. On a patient's request, the employer must tell the patient where the departing clinician will be practicing .
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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.
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.
See Md. Code, Lab. & Empl. § 3-716(b)(1).
Becker's common-law reasonableness requirement still governs a covenant that falls within § 3-716(b)'s statutory cap.
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.”
See Becker v. Bailey, 268 Md. 93 (1973).
Section 3-716 caps a covered high-earner health care covenant at one year from the last day of employment.
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.
See Md. Code, Lab. & Empl. § 3-716(b)(2)(i).
Section 3-716 caps the geographic reach of a covered high-earner health care covenant at ten miles from the primary place of employment.
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.
See Md. Code, Lab. & Empl. § 3-716(b)(2)(ii).
Section 3-716 requires patient notice of a departing clinician's new location on request.
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.
See Md. Code, Lab. & Empl. § 3-716(b)(3).
What legitimate business interests can support a Maryland non-compete?
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. On a touch screen, a tap shows all 2 sources in this group.
Becker describes the categories Maryland courts recognize: covenants are enforced against employees who provide unique services, or to prevent misuse of trade secrets, routes, or client lists, or solicitation of customers . Even when a legitimate interest exists, the restraint can be no broader than necessary to protect it .
Naming the employer's actual competitors may help show that the restriction is limited to what is reasonably necessary. An open-ended definition of a competitive business creates a greater risk of overbreadth than a list of named competitors .
Section 3-716 reinforces that focus. Section 3-716(a)'s void rule carves out provisions aimed at the taking or use of a client or patient list or other proprietary client information — signaling that protecting customer data is treated differently from blocking competition outright .
A no-business or non-dealing covenant applies even when the customer initiates contact. That broader restriction is enforceable only to the extent a customer-relationship or trade-secret interest supports it, and only if its scope is no wider than necessary to protect that interest. On a touch screen, a tap shows all 2 sources in this group.
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Becker limits enforceable Maryland covenants to those protecting unique services, trade secrets, routes or client lists, or against solicitation of customers.
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.
See Becker v. Bailey, 268 Md. 93 (1973).
Fowler holds that even a covenant serving a legitimate interest can be no broader or more restrictive than necessary to effectuate that interest.
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.
See Fowler v. Printers II, Inc., 89 Md. App. 448 (1991).
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.
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.
See Md. Code, Lab. & Empl. § 3-716(a)(2).
What duration and geographic scope are reasonable for a Maryland non-compete?
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. On a touch screen, a tap shows all 2 sources in this group.
Ruhl makes the fact-specific nature explicit: there is no arbitrary yardstick for what protection is reasonably necessary, no fixed measure of undue hardship, and no precise scale for the public interest . A covenant is overbroad when it exceeds what is reasonably necessary to protect the employer's interest .
Scope of the prohibited activity matters as much as miles and months. In Medispec, a federal court applying Maryland law held a covenant unenforceable on its face because it barred the former employee from working in essentially any capacity, far beyond his prior sales role .
A duration or radius carried from another Maryland agreement is measured against the worker's actual role and customer exposure, not against the source it was copied from. A broad activity ban that sweeps in work unrelated to the employee's real job is the facial overbreadth that renders a Maryland covenant unenforceable on its face, before any fact-specific balancing. On a touch screen, a tap shows all 2 sources in this group.
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Ruhl holds that Maryland reasonableness analysis is fact-specific, with no fixed yardstick for necessity, hardship, or public interest.
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.
See Ruhl v. F. A. Bartlett Tree Expert Co., 245 Md. 118 (1967).
Seneca One defines overbreadth as a restraint exceeding what is reasonably necessary to protect the employer's legally protected interest.
A restrictive covenant is overbroad if it exceeds the limits of what is reasonably necessary to protect the employer’s legally protected interest.
See Seneca One Fin., Inc. v. Bloshuk, 214 F. Supp. 3d 457 (D. Md. 2016).
Medispec holds a covenant unenforceable on its face where the prohibited activity is overly broad.
Here, an examination of the particular facts is not necessary because the clause is overly broad on its face.
See Medispec, Ltd. v. Chouinard, 133 F. Supp. 3d 771 (D. Md. 2015).
Is continued at-will employment enough consideration for a Maryland non-compete?
Yes. Maryland treats an employer's agreement to continue an at-will employee as sufficient consideration for a covenant signed after employment begins. On a touch screen, a tap shows all 2 sources in this group.
Simko is the anchor. The court reasoned that because the at-will relationship is mutual, the employer's promise not to terminate in exchange for the covenant is just as good as the employee's promise to keep working . The court treated the contrary view — that continued at-will employment is not consideration — as the distinct minority position .
Do not assume a bare recital cures a consideration problem. Maryland accepts continued employment as consideration, but the record is cleaner when the agreement and the surrounding documents show that signing was connected to the employee's continued employment .
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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.
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.
See Simko, Inc. v. Graymar Co., 55 Md. App. 561 (1983).
Simko characterizes the view that continued at-will employment is not sufficient consideration as the distinct minority position.
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.
See Simko, Inc. v. Graymar Co., 55 Md. App. 561 (1983).
Will a Maryland court blue-pencil or rewrite an overbroad non-compete?
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. On a touch screen, a tap shows all 2 sources in this group.
Holloway describes the typical Maryland response to an invalid portion of a covenant: blue-pencil the violative words and, if what is excised is severable, enforce the rest; otherwise the entire agreement is void . The traditional, strict version of that rule is mechanical — a court strikes words and enforces what is left only if the remainder still stands as a complete, valid contract . Maryland's focus is therefore on severability: the Holloway litigation, affirmed in part by the Maryland Supreme Court, turned on whether the covenant could be severed (there, on a client-by-client basis) rather than on a court rewriting the bargain.
Hebb v. Stump, Harvey & Cook shows the partial-enforcement side in practice. Where an overbroad restriction is not so interwoven as to be logically inseparable from the rest of the contract, a Maryland court will sever it and enforce the lawful remainder when partial enforcement works no injury to the public and no injustice to the parties . For a clause-by-clause pass over a specific agreement against these drafting rules, the Maryland non-compete reviewer checklist walks the full covenant suite item by item with each requirement's force level.
A Maryland savings clause that asks a court to invent a narrower radius or duration runs into a court that blue-pencils but does not rewrite. Whether a court applies a strict blue pencil or a more granular severance, an indivisible overbroad term gives it nothing to strike and leaves the whole covenant void, while restrictions written as severable, independent tiers let a court excise an excessive tier and enforce the lawful remainder. On a touch screen, a tap shows all 2 sources in this group.
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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.
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.
See Holloway v. Faw, Casson & Co., 78 Md. App. 205 (1989), aff'd in part & rev'd in part, 319 Md. 324 (1990).
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.
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.
See Holloway v. Faw, Casson & Co., 78 Md. App. 205 (1989), aff'd in part & rev'd in part, 319 Md. 324 (1990).
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.
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.
See Hebb v. Stump, Harvey & Cook, Inc., 25 Md. App. 478 (1975).
How does the Maryland Uniform Trade Secrets Act protect employers when a covenant is void?
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. On a touch screen, a tap shows all 3 sources in this group.
A trade secret is information that derives independent economic value from not being generally known and is the subject of reasonable secrecy efforts . Actual or threatened misappropriation may be enjoined, and for willful and malicious misappropriation a court may award exemplary damages of up to twice the damages awarded under the statute's compensatory-damages provision. On a touch screen, a tap shows all 2 sources in this group.
Trade-secret remedies can also outrun a contract's damages cap. In Ingram v. Cantwell-Cleary, the court declined to enforce a non-compete's liquidated-damages provisions because they did not bar a separate recovery for trade-secret misappropriation, and it upheld findings that customer lists and pricing data were misappropriated trade secrets. On a touch screen, a tap shows all 2 sources in this group.
Maryland's recent trade-secret litigation turned on customer lists and pricing data leaving with departing employees, so a covenant that omits a return-and-deletion obligation and a signed certification loses the cleanest contemporaneous record of what left and when if that material later surfaces at a competitor . Return and certification terms sit outside the § 3-716 void, so they hold even where a non-compete does not.
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Section 11-1201 defines a trade secret as information with independent economic value from secrecy that is subject to reasonable secrecy efforts.
“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.
See Md. Code, Com. Law § 11-1201(e).
Section 11-1202 authorizes injunctions against actual or threatened trade-secret misappropriation.
Actual or threatened misappropriation may be enjoined.
See Md. Code, Com. Law § 11-1202(a).
Section 11-1203 allows exemplary damages up to twice the compensatory award for willful and malicious misappropriation.
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.
See Md. Code, Com. Law § 11-1203(d).
Ingram holds that a non-compete's liquidated-damages provisions did not bar a separate recovery for trade-secret misappropriation under MUTSA.
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
See Ingram v. Cantwell-Cleary Co., 259 Md. App. 102 (2023).
Ingram upholds findings that confidential customer lists and pricing information were trade secrets that the former employees misappropriated.
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.
See Ingram v. Cantwell-Cleary Co., 259 Md. App. 102 (2023).
How does Maryland treat employee non-solicitation covenants?
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. On a touch screen, a tap shows all 2 sources in this group.
The statutory void in Section 3-716 does not reach an anti-raiding covenant, because it is textually keyed to a restraint on the signer's own ability to take new employment or become self-employed .
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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.
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.”
See Becker v. Bailey, 268 Md. 93 (1973).
Seneca One states Maryland's four-part common-law test for enforcing an employee restrictive covenant.
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.”
See Seneca One Fin., Inc. v. Bloshuk, 214 F. Supp. 3d 457 (D. Md. 2016).
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.
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.
See Md. Code, Lab. & Empl. § 3-716(a)(3).
Does a Maryland non-compete toll or extend during breach or litigation?
This is an open Maryland question. No identified Maryland statute or appellate decision squarely endorses automatic judicial tolling or enforcement of an extension-on-breach clause after the stated restricted period expires. On a touch screen, a tap shows all 2 sources in this group.
Maryland law on pausing the clock during a violation, or extending a covenant for the length of litigation, is unsettled. The safest reading is that any such extension still has to satisfy the same reasonableness test that governs the covenant itself . If an extension-on-breach clause turns a fixed one-year restraint into an open-ended one, a court could find it unreasonable on the facts .
Open question: Maryland authority does not settle whether an extension-on-breach or tolling clause is enforceable after the original period expires. Draft any tolling clause as a separate, reasonable restraint tied to the duration of the breach, and do not assume a Maryland court will automatically extend an expired covenant. On a touch screen, a tap shows all 2 sources in this group.
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Ruhl supports applying Maryland's reasonableness test to any restraint, including one that would extend the restricted period.
Covenants of this nature are in restraint of trade; the test is whether the particular restraint is reasonable on the specific facts.
See Ruhl v. F. A. Bartlett Tree Expert Co., 245 Md. 118 (1967).
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.
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.”
See Becker v. Bailey, 268 Md. 93 (1973).
Did the FTC's federal non-compete rule change Maryland non-compete law?
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 .
In Ryan LLC v. FTC, the court held the rule unlawful and set it aside, stating that the rule would not be enforced or take effect on its September 4, 2024 effective date . That removes the FTC rule as a nationwide overlay but does not make every Maryland covenant enforceable — § 3-716 and Maryland common law still control.
Sources for this answer
Ryan set aside the FTC Non-Compete Rule and held it would not be enforced or take effect.
The Rule shall not be enforced or otherwise take effect on its effective date of September 4, 2024, or thereafter.
See Ryan LLC v. Fed. Trade Comm'n, 746 F. Supp. 3d 369 (N.D. Tex. 2024).
What recent Maryland non-compete changes should employers watch?
The most recent enacted change is House Bill 1016 (2026), now Chapter 301. It is enacted but not yet effective, and the category it adds is narrower than the bill that was introduced. Beginning October 1, 2026, § 3-716's void rule extends to a licensed architect who is employed by an employer that, on the first day of that architect's employment, employed more than 30 people a majority of whom reported to a Maryland work site or worked remotely from within Maryland, and that, on the enforcement date, no longer has that Maryland majority or no longer has its principal place of business in Maryland. On a touch screen, a tap shows all 2 sources in this group. Two things about that sentence are easy to get wrong, because the enrolled chapter shows them struck out. The protected worker is the architect, not an architect's staff: the Act deletes employees of and substitutes licensed architects employed by. And there is no relocation requirement: the Act deletes relocates, reorganizes, or otherwise ceases to and substitutes a status test measured on the enforcement date, which the Act defines as the earliest date the employer sues, starts arbitration, or demands written compliance . An employer that simply never had a Maryland majority on the day it moved to enforce is inside the category without having relocated anything.
This is the fourth wave of § 3-716 amendments, after the 2019 low-wage ban, the 2023 amendment altering the application of the prohibition (Senate Bill 591, Chapter 266, effective October 1, 2023 — the change that keyed the low-wage threshold to the State minimum wage), and the 2024 veterinary and health care expansion . Mechanically, the new law inserts a definitions paragraph as a new § 3-716(a)(1), which pushes the whole applies-to paragraph from (a)(1) down to (a)(2). The architect category therefore lands at § 3-716(a)(2)(i)3 and the veterinary category is renumbered from (a)(1)(i)3 to (a)(2)(i)4, effective October 1, 2026 — so the subsection numbers used throughout this note reflect the statute as it reads before that date. The Act's own execution-date section does not match that renumbering: it names § 3-716(a)(1)(i)3 as enacted by Section 1 of this Act, and Section 1 enacts no such paragraph, because (a)(1)(i) is the definitions chapeau and carries no numbered items. Read against the Act's evident purpose the reference is to the architect category at (a)(2)(i)3; read literally it names nothing. That is unresolved on the face of the chapter, and until the Code is republished on October 1, 2026 there is no codified text to settle it. The provision is prospective on its own terms: the execution-date section applies it only to agreements executed on or after the effective date . As of today the codified § 3-716 published by the General Assembly carries none of this — no architect category, no definitions paragraph, and the veterinary category still at (a)(1)(i)3 — because the Act does not begin until October 1, 2026.
A broader 2025 effort to clarify that § 3-716 reaches only post-separation restrictions died in committee, so the active-employment reach of the statute's conflict-of-interest language remains unsettled.
Treat the § 3-716 categories as a moving target. Re-check the worker's wage band and occupation against the current statute each session, and remember the architect provision is enacted but does not begin until agreements executed on or after October 1, 2026 . Do not describe the category from a summary of House Bill 1016 as introduced: the enrolled chapter struck the words employees of and relocates, and a description built on either of them protects the wrong worker or imposes a trigger the enacted law does not require .
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Chapter 301's execution-date section applies the new architect category only to agreements executed on or after October 1, 2026. It names § 3-716(a)(1)(i)3, a paragraph Section 1 of the Act does not enact — the architect category is at (a)(2)(i)3 — so the cross-reference is unresolved on the face of the chapter.
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.
See 2026 Md. Laws ch. 301, § 2 (H.B. 1016).
Chapter 301 adds a definition of enforcement date to § 3-716, fixing it as the earliest date the employer files suit, initiates arbitration, or demands written compliance — the date on which the architect category's out-of-state test is measured.
“ENFORCEMENT DATE” MEANS THE EARLIEST DATE ON WHICH AN EMPLOYER SEEKING TO ENFORCE A NONCOMPETE OR CONFLICT OF INTEREST PROVISION IN AN EMPLOYMENT CONTRACT OR A SIMILAR DOCUMENT OR AGREEMENT CONCERNING AN EMPLOYEE: 1. FILES AN ACTION OR OTHERWISE SEEKS JUDICIAL ENFORCEMENT OF THE PROVISION; 2. INITIATES ARBITRATION OR ANOTHER FORM OF FORMAL DISPUTE RESOLUTION TO ENFORCE THE PROVISION; OR 3. DEMANDS IN WRITING THAT THE EMPLOYEE COMPLY WITH THE PROVISION.
See 2026 Md. Laws ch. 301, § 1 (H.B. 1016) (enacting Md. Code Ann., Lab. & Empl. § 3–716(a)(1)(ii)).
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.
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
See 2023 Md. Laws ch. 266 (S.B. 591).
Are sale-of-business non-competes judged differently in Maryland?
Yes: in Maryland, a seller's covenant given on the sale of a business that is founded on sufficient consideration and confined to a reasonably limited area is, as a general rule, enforced by injunction almost as a matter of course . Maryland's non-compete statute, Labor and Employment § 3-716, addresses provisions in employment contracts . Anderson v. Truitt, the decision cited here for the seller rule, stated it in a suit it dismissed because the buyers were improper parties .
In Anderson v. Truitt, the Court of Appeals stated that where a seller's covenant rests on consideration and is confined to a reasonably limited area, the purchasers of the business are entitled to injunctive enforcement almost as a matter of course .
Anderson (1930) stated that rule in a suit that failed because the buyers were improper parties , and the court expressed its opinion on the remaining questions without granting relief . Within Anderson, the seller rule is therefore a statement the court made without applying it to grant relief. Becker v. Bailey, the source of the modern Maryland reasonableness test, involved an employment covenant rather than a sale of a business .
A seller's covenant that runs only to the individual buyers, when those buyers transfer the business to a corporation, can leave the buyers without standing to enforce it. In Anderson, once the business was held by a corporation, only the corporation could sue to restrain a breach of the covenant, and the individual buyers' suit failed . In Anderson, the rights in the covenant vested in the corporation because all parties agreed at the time of the sale that it would be formed to take over the business . A purchase agreement that states which entity will hold the benefit of the covenant makes clear which party has to bring an enforcement suit.
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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.
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.
See Anderson v. Truitt, 158 Md. 193, 148 A. 223 (1930).
Anderson stated that where a seller's covenant not to compete is founded on sufficient consideration and confined to a reasonably limited area, the purchasers are, as a general rule, entitled to injunctive enforcement almost as a matter of course.
Given the collateral stipulation, founded upon sufficient consideration, to abstain from such a competing business within a reasonably limited area, the;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.
See Anderson v. Truitt, 158 Md. 193, 148 A. 223 (1930).
Section 3-716 governs noncompete and conflict-of-interest provisions in employment contracts and similar agreements that restrict an employee's ability to work for a new employer or become self-employed.
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.
See Md. Code, Lab. & Empl. § 3-716(a)(3).
Anderson held that after the buyers transferred the business to a corporation, only the corporation could sue to restrain violation of the seller's covenant.
It seems to this court that the better reasoning supports the view that only the corporation may now sue to restrain the violation of the covenant.
See Anderson v. Truitt, 158 Md. 193, 148 A. 223 (1930).
Anderson dismissed the bill because the appellants were improper parties, and expressed its opinion on the remaining questions to save expense in proceedings on a new bill.
As the case appears to have been fully presented, we have nevertheless expressed the opinion of this court on all its questions in order to save expense and delay in proceedings upon a new bill.
See Anderson v. Truitt, 158 Md. 193, 148 A. 223 (1930).
Anderson held that the appellant buyers were improper parties to enforce the covenant and that the corporation could not be substituted by amendment, so the bill was dismissed.
There can be no substitution of the corporation as a party by amendment, as we find the appellants to be improper parties, and entirely new parties cannot be substituted by amendment.
See Anderson v. Truitt, 158 Md. 193, 148 A. 223 (1930).
Anderson found that rights in the seller's covenant vested in the corporation because all parties to the sale agreed that the corporation would be formed to take over the business.
There can be no doubt of the vesting in the corporation of rights in the covenant, for simultaneously with the original sale it was agreed by all parties to it that the corporation should be formed to take over the business, and all converted their interests into shares of stock.
See Anderson v. Truitt, 158 Md. 193, 148 A. 223 (1930).
Becker states the Maryland general rule for a restrictive covenant in an employment contract, not a covenant given on the sale of a business.
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.”
See Becker v. Bailey, 268 Md. 93 (1973).
What does federal law require a non-compete or confidentiality agreement in Maryland to say about whistleblowers and pay?
An employee confidentiality, non-compete, or invention assignment agreement signed or updated now that governs trade secrets or other confidential information must give the Defend Trade Secrets Act whistleblower-immunity notice, and for employees the National Labor Relations Act covers, Section 7 of that Act protects concerted activity, including joining together over pay and working conditions, that a broad confidentiality clause can restrict. The employer may satisfy the notice duty by cross-referencing a qualifying policy document provided to the employee, but an employer that omits the notice may not be awarded exemplary damages or attorney fees under the Defend Trade Secrets Act in an action against an employee who was not given notice.
The notice describes a federal immunity: an individual cannot be held liable under federal or state trade-secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal. For an agreement signed or updated now, the duty to give that notice reaches any agreement with an employee that governs trade secrets or other confidential information, whatever else the agreement does.
Section 7 gives employees the National Labor Relations Act covers a statutory right to engage in concerted activity for mutual aid or protection, including joining together to improve pay and working conditions. For employees the Act covers, the Board's work-rule standard adopted in 2023 makes a rule presumptively unlawful if it has a reasonable tendency to chill employees from exercising their Section 7 rights; an employer can rebut that presumption only by showing a legitimate and substantial business interest it cannot serve with a more narrowly tailored rule. The 2023 standard may change, but the Section 7 right it enforces is statutory. State law may add its own requirements for the same clauses.
A form carried over without the immunity notice, or a cross-reference to a reporting policy the employee never received, leaves the confidentiality clause without a valid notice, so the Act's exemplary damages and attorney fees are unavailable against that employee. A Confidential Information definition that sweeps in pay and working conditions with no carve-out exposes the employer to an unfair-labor-practice finding for employees the Act covers.
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An individual is immune from criminal and civil liability under federal and state trade-secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal.
An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that— (A) is made— (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
See 18 U.S.C. § 1833(b)(1).
An employer must give notice of the trade-secret whistleblower immunity in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
An employer shall provide notice of the immunity set forth in this subsection in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
See 18 U.S.C. § 1833(b)(3)(A).
An employer complies with the notice requirement by cross-referencing a policy document, provided to the employee, that sets out the employer's reporting policy for a suspected violation of law.
An employer shall be considered to be in compliance with the notice requirement in subparagraph (A) if the employer provides a cross-reference to a policy document provided to the employee that sets forth the employer's reporting policy for a suspected violation of law.
See 18 U.S.C. § 1833(b)(3)(B).
An employer that does not give the required notice may not be awarded exemplary damages or attorney fees in a trade-secret action against an employee who did not receive it.
If an employer does not comply with the notice requirement in subparagraph (A), the employer may not be awarded exemplary damages or attorney fees under subparagraph (C) or (D) of section 1836(b)(3) in an action against an employee to whom notice was not provided.
See 18 U.S.C. § 1833(b)(3)(C).
Section 7 gives employees the right to engage in concerted activities for mutual aid or protection, the statutory basis for keeping discussion of pay and working conditions outside confidentiality restrictions.
Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 158(a)(3) of this title.
See 29 U.S.C. § 157 (NLRA § 7).
The National Labor Relations Board protects the right of private-sector employees, with or without a union, to join together to improve wages, benefits, and working conditions.
Established in 1935, the National Labor Relations Board is an independent federal agency that protects employees from unfair labor practices and protects the right of private sector employees to join together, with or without a union, to improve wages, benefits and working conditions.
See NLRB Office of Public Affairs, news release of Feb. 21, 2023 (agency mission statement).
Under the work-rule standard the Board adopted in 2023, a rule with a reasonable tendency to chill employees from exercising their Section 7 rights is presumptively unlawful unless the employer proves a legitimate and substantial business interest it cannot advance with a more narrowly tailored rule.
Under the new standard adopted in Stericycle, the General Counsel must prove that a challenged rule has a reasonable tendency to chill employees from exercising their rights. If the General Counsel does so, then the rule is presumptively unlawful. However, the employer may rebut the presumption by proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule.
See Stericycle, Inc., 372 NLRB No. 113 (2023); NLRB Office of Public Affairs, Board Adopts New Standard for Assessing Lawfulness of Work Rules (Aug. 2, 2023).