Competition Noncompetition For 50 In Maryland
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Beginning July 1, 2025, the law will ban non-compete and conflict-of-interest provisions in all agreements executed on or after that date with any employee licensed under the Maryland Health Occupations Article – which may include not only physicians and nurses but also pharmacists, dentists, occupational and physical ...
Enforceability of Non-Competition Agreements in Maryland If the agreement is too broad or vague, it is unlikely that a court will enforce the agreement. When a non-competition agreement is challenged, Courts in Maryland will generally enforce the agreement only: Against an employee providing unique services.
A typical case might involve an executive or professional. The non-competition limitation in the employment contract might restrict the employee for a period of one (1) year from engaging in competition, “directly or indirectly”, with the employer within a radius of fifty (50) miles from the company's office.
A covenant not to compete is often found in an employment contract or a sale of business contract .
Consideration: Non-compete agreements must be supported by valid consideration, which means that the employee must receive something of value in exchange for agreeing to the restrictions. For example, the offer of initial employment, a promotion, or additional compensation may serve as valid consideration.
The same operating agreement may prohibit ownership of another facility within 10 miles of the ASC, and may make such ownership an adverse terminating event.
This means that all current noncompetes under Maryland law will now be unenforceable except for those for senior executives, and no new noncompetes whatsoever may be entered into after September 4, 2024.
On April 23, 2024, the FTC passed a final rule to ban most non-compete clauses in employment agreements, finding such agreements to be unfair methods of competition (the “FTC Rule”).
The Salary Threshold Increase(s) As of October 1, 2023, the salary threshold for non-competes increased to 150% of the state's minimum wage – which is $19.88 per hour (the minimum wage of $13.25 per hour times 150%) or approximately $41,350 annually.
Maryland courts typically enforce non-competes only if they protect legitimate business interests, such as trade secrets or client relationships, without being unduly restrictive. Agreements longer than two years may be seen as an undue hardship on the executive.
