Davis CaesarYou've just accepted a job offer in Maryland. The offer letter includes a non-compete clause. Is it enforceable? The answer depends on what you earn, what industry you work in, and — increasingly — what the federal regulatory environment allows. Maryland's non-compete framework is one of the most restrictive for low-wage workers in the country, completely bans non-competes for employed physicians, and applies a common-law reasonableness test for everyone else. Whether you're an employer drafting these clauses or an employee considering signing one, understanding where Maryland's rules sit relative to neighboring states and federal developments is essential before you act.
Maryland Non-Compete Law vs. Other States: A Framework Comparison
| Jurisdiction | Wage Floor for Enforceability | Categorical Bans | Enforceability Standard |
|---|---|---|---|
| Maryland | $15/hr ($31,200/yr) — void below | Employed physicians (categorical ban) | Reasonableness: duration, geography, legitimate interest |
| Virginia | $35,568/yr (2023 law) | None currently | Reasonableness test |
| Delaware | No statutory wage floor | None | Reasonableness test |
| Pennsylvania | No statutory wage floor | None | Reasonableness (strict construction) |
| California | Effectively banned for all employees | Yes (near-total) | Not applicable |
| FTC Rule (2024) | Would ban most non-competes (litigation pending) | Near-total proposed ban | Stayed pending litigation as of 2026 |
Sources: MD Code Ann., Labor & Employment §3-716; Virginia Code §40.1-28.7:8; FTC Non-Compete Clause Rule (16 CFR Part 910), 2024.
Maryland's Wage Floor Rule: The $15/Hour Bright Line
Maryland enacted its non-compete wage floor in October 2019 (Chapter 725, Acts of 2019), codified at MD Code Ann., Labor & Employment §3-716. The rule is simple: a non-compete or conflict of interest clause in an employment agreement is void and unenforceable if the employee earns $15 per hour or less — or the equivalent annual salary of $31,200.
The wage threshold was set in 2019 and has not been updated since. It does not automatically adjust with the state minimum wage. Workers earning between the minimum wage ($15.35/hour in 2026 for large employers) and the non-compete floor ($15.00) occupy a narrow window where the statutory exemption technically does not apply — but practically, any court applying a reasonableness analysis would scrutinize a non-compete against a near-minimum-wage worker extremely closely.
For employers, the practical takeaway: non-compete clauses in offer letters and employment agreements should include a clear statement of the employee's hourly or annual compensation to demonstrate that the threshold is met. A non-compete without a salary anchor is harder to enforce if the employee's rate is disputed.
How Maryland compares: Virginia adopted a similar wage floor for workers earning less than the average weekly wage (approximately $1,290/week as of 2023). Delaware and Pennsylvania have no wage floors — courts apply the common-law reasonableness test regardless of salary. Maryland's $15/hour floor is among the lowest numerically of any state with a wage threshold, but it was one of the earliest.
The Healthcare Worker Exception: Maryland's Most Distinctive Rule
In 2020, Maryland went beyond a wage floor and enacted a categorical prohibition on non-compete and conflict of interest clauses for employed physicians (MD Code Ann., Business Occupations & Professions §14-309). No other profession in Maryland has a categorical ban — physicians are uniquely protected.
The 2020 law was amended in 2022 to add limited protections for certain other healthcare workers employed by large health systems (those with more than 50 employees), but the breadth of the physician ban is broader: it applies to all employed physicians, regardless of their employer's size or the physician's compensation level.
The rationale was patient continuity of care. The General Assembly found that non-competes imposed on physicians disrupted established patient-physician relationships when doctors left a practice — forcing patients to either follow the physician out of network or remain with a practice they no longer trusted.
"Maryland's physician non-compete ban reflects a broader national trend, but Maryland was a first mover," notes an employment attorney who advises healthcare systems in the Baltimore and Washington, D.C. metro area. "Health systems initially pushed back, but many have adapted their retention strategies to rely on equity arrangements and retention bonuses rather than restrictive covenants."
For non-physician healthcare workers — nurses, physical therapists, medical billers — the standard reasonableness analysis applies unless a specific statutory protection applies.
The Reasonableness Test for Maryland Non-Competes Above the Wage Floor
For employees who earn above $15/hour and are not in a categorically protected profession, Maryland courts apply a three-factor reasonableness test: duration, geographic scope, and protected business interest.
Duration
Maryland courts have generally upheld non-competes of six to 12 months. Restrictions of 24 months are frequently litigated and may be upheld for senior sales executives, senior engineers with trade secret access, or executives with access to strategic client relationships. Two-year clauses for mid-level employees without specialized knowledge or direct client ownership are routinely struck down. Courts have treated 36-month and 48-month clauses with heavy skepticism, though a few limited cases have enforced them for very senior roles.
Geographic Scope
Maryland courts look at whether the geographic restriction is proportionate to the actual scope of the employee's work. A sales executive who covered Maryland, Virginia, and D.C. may be bound by a tri-state restriction. A customer service representative who worked from a call center and had no territory is unlikely to face a statewide geographic restriction that courts will enforce.
Legitimate Business Interest
This is the most substantive element. Maryland courts have recognized the following as legitimate interests: trade secrets and confidential information, customer goodwill developed through the employee's direct relationships, and specialized training provided exclusively by the employer. The employer bears the burden of proving a legitimate interest — generically claiming "protection of business interests" without specifics is insufficient.
À retenir: Maryland courts are willing to blue-pencil (reform) overbroad non-competes by narrowing their scope rather than voiding them entirely in some circumstances. However, the trend in Maryland case law has been toward greater skepticism of long-duration, broad-geography clauses — particularly for roles without significant client relationships or trade secret access. For broader context on Maryland's employment law environment, see the full Maryland Labor Law dossier.
The FTC Non-Compete Rule: National Backdrop for Maryland Employers
In April 2024, the Federal Trade Commission (FTC) finalized a rule that would ban most non-compete agreements nationwide, replacing all inconsistent state laws. The rule was immediately challenged in federal court, and as of 2026, it remains stayed pending judicial resolution. The rule's validity is being decided in multiple federal circuits.
What this means for Maryland employers and employees:
- If the FTC rule is ultimately upheld: Maryland's wage floor and physician ban would be superseded by a broader federal prohibition, rendering most new non-competes void regardless of salary.
- If the FTC rule is struck down: Maryland's current framework — wage floor, physician ban, reasonableness test — remains the governing law.
- In the meantime: Maryland law applies. Employers should draft non-competes that meet Maryland's state standards and monitor federal developments. Employees presented with non-competes should ensure any agreement they sign reflects the narrowest reasonable scope.
Maryland's existing protections are more favorable to employees than many other states, but they are not as sweeping as California's near-total ban or the FTC's proposed rule. The legal landscape in 2026 is genuinely uncertain at the federal level.
Disclaimer: Non-compete enforceability is highly fact-specific and changes rapidly. Consult a licensed Maryland employment attorney before signing or enforcing a non-compete agreement.
Practical Steps for Employees Presented with a Maryland Non-Compete
- Check your hourly rate. If you earn $15/hour or less, the agreement is void under §3-716. You can sign it without legal effect — but you may prefer to note the statutory invalidity in writing.
- Identify your industry. If you are an employed physician, the clause is categorically void under §14-309 of the Business Occupations & Professions Code.
- Scrutinize the scope. Note the duration, geographic restriction, and the specific activities prohibited. Ask your employer what legitimate business interest is being protected and why the stated scope is necessary to protect it.
- Negotiate before signing. Maryland courts respect negotiated, proportionate agreements. Narrowing the duration from 24 to 12 months, or the geography from "statewide" to "within 30 miles of your assigned territory," significantly reduces litigation risk if you later want to change jobs.
- Consult an attorney. Many Maryland employment attorneys offer free initial consultations for non-compete reviews. A $300 consultation is inexpensive insurance against a clause that could cost you your next job offer.
