Non-Competition Agreements
Non-Competition Agreements: What They Actually Restrict
A non-compete clause restricts your ability to work for a competing business, or start one yourself, for some period of time after your employment ends — typically within a defined geographic area or industry. This page focuses specifically on non-competition restrictions. For related clauses that are often confused with non-competes, see our pages on non-solicitation agreements and non-disclosure and confidentiality provisions. For the full picture of how these issues fit together in an executive contract, see our Executive Employment Contract Issues overview.
The Legal Landscape Has Shifted Significantly in Recent Years
Non-compete law has changed faster in the past several years than almost any other area of employment law. In April 2024, the Federal Trade Commission issued a rule that would have banned most non-competes nationwide — but a federal court in Texas struck it down just months later, leaving the legal landscape governed almost entirely by state and local law once again. That means where you work — not just what your contract says — determines whether your non-compete is enforceable at all.
DC: A Broad Ban, With an Important Exception for Highly Compensated Employees
DC enacted one of the most sweeping non-compete bans in the country, effective October 2022, generally prohibiting non-compete clauses and anti-moonlighting policies for most workers. But there’s a significant exception that matters a great deal for executives specifically: the ban does not apply to “highly compensated employees.”
As of January 2026, that threshold is $162,164 in annual compensation ($270,274 for medical specialists), and it’s adjusted upward every year based on the Consumer Price Index for the DC metro area. Many executives and senior professionals earn above this threshold — meaning DC’s general non-compete ban often simply doesn’t protect them the way it protects most other DC workers.
Compensation for purposes of this threshold includes salary, commissions, and bonuses, but not the value of fringe benefits like health insurance or retirement contributions — which matters if you’re close to the line and trying to determine which side of it you actually fall on.
If you fall above the highly-compensated threshold, DC law still imposes real limits on what your employer can ask you to sign:
- The restriction must be reasonably limited to the type of work you actually performed for the employer
- It must be limited to competing entities, not any employer whatsoever
- The geographic scope must be reasonable
- The duration cannot exceed 365 days after termination (730 days for medical specialists)
- You must be given the agreement at least 14 days before you’re required to sign it — whether you’re a new hire or a current employee being asked to sign one for the first time
Worth knowing: your employer cannot retaliate against you, or threaten to retaliate, for refusing to sign a non-compete, failing to comply with one, or simply asking questions about whether an exception applies to your situation. If your employer imposes a non-compete on you and you don’t fall within the highly-compensated exception, the agreement is generally void as a matter of DC law — not just voidable, but void from the start, regardless of what you may have agreed to at the time.
Maryland: Enforceable for Most Earners, With a Rule-of-Reason Test
Maryland takes a narrower approach than DC. Its statutory ban on non-competes applies only to lower-wage workers — currently, employees earning at or below 150% of the state minimum wage (about $22.50 per hour, tied to Maryland’s $15 minimum wage). Above that threshold, non-competes generally remain enforceable, subject to a “rule of reason” balancing test developed through Maryland case law, which weighs the employer’s legitimate business interests against the hardship the restriction places on the employee, and the impact on the public interest.
Maryland courts generally apply a four-part reasonableness test before enforcing a non-compete. The agreement must be: (1) ancillary to your employment (meaning it’s part of the employment relationship, not a standalone restriction unrelated to your job); (2) necessary to protect a legitimate business interest, such as trade secrets, confidential information, or genuine client relationships; (3) reasonable in scope, duration, and geography; and (4) not unduly harsh on you or contrary to the public interest. If any of these elements is missing, a court can decline to enforce the agreement, or narrow it under the blue pencil doctrine discussed below.
In practice, this test focuses heavily on whether the geographic scope and duration are reasonable in light of where you actually worked and interacted with the employer’s clients — a broadly worded non-compete covering an entire region you never actually worked in is more vulnerable to challenge than one narrowly tailored to your actual role. Most non-competes that Maryland courts uphold run one to two years; agreements attempting to restrict competition for three, four, or five years face significantly greater scrutiny and are frequently struck down or narrowed.
Consideration matters too. A Maryland non-compete needs to be supported by adequate consideration — something of value exchanged for your agreement to the restriction. If the non-compete was part of your original job offer, the job itself is typically sufficient. But if your employer asks you to sign one mid-employment without any raise, promotion, bonus, or other new benefit in exchange, the agreement may lack the consideration needed to be enforceable at all.
Maryland has also carved out complete, unconditional bans for certain professions regardless of income — including veterinarians and veterinary technicians (effective June 2024), and licensed health care professionals providing direct patient care who earn $350,000 or less annually (effective July 2026). Higher-earning health care professionals above that threshold face narrower limits: a maximum one-year duration and a ten-mile geographic restriction.
What Compensation Level Means for Your Non-Compete
Because both DC’s exception and Maryland’s ban are tied directly to how much you earn, your specific compensation — including how bonuses and commissions are counted — can determine whether a non-compete applies to you at all. See our page on executive compensation issues for more on how different forms of pay are treated.
What to Do If You're Asked to Sign a Non-Compete
- Confirm your actual compensation level against the current threshold for your jurisdiction, since these figures adjust annually
- Look closely at the geographic scope and duration — broader isn’t automatically enforceable, even where non-competes are generally allowed
- Consider whether a narrower non-solicitation agreement would protect your employer’s real interests just as well, and could be a point of negotiation
- If you’re leaving a job and unsure whether your existing non-compete is enforceable, don’t assume it’s binding without a legal review — particularly if your income, role, or location has changed since you signed it
Maryland's "Blue Pencil" Doctrine: A Key Wrinkle Worth Understanding
This is one of the more important, and more misunderstood, pieces of Maryland non-compete law. When a Maryland court finds that a non-compete is overly broad — too long in duration, too wide in geographic scope, or too sweeping in what work it restricts — the court doesn’t necessarily throw the whole thing out. Instead, Maryland follows what’s known as the “blue pencil” doctrine, rooted in the 1990 case Holloway v. Faw, Casson & Co.
Under blue penciling, a court can strike, or excise, the offending language from a non-compete if that language is “neatly severable” — meaning it can be removed cleanly without having to rewrite or add anything to what’s left. If what remains after striking the bad language still makes grammatical and legal sense, the narrowed covenant may be enforced. If the offending language is woven throughout the agreement in a way that can’t be cleanly separated, or if striking it would leave nonsensical or incomplete language, the entire covenant fails.
What this means in practice: a non-compete that combines duration, geographic scope, and restricted activities into one dense, indivisible paragraph is much more vulnerable to being thrown out entirely than one that states each restriction as its own separate, clearly delineated clause. If a court can strike “anywhere in the United States” and be left with a sensible, narrower restriction, blue penciling may save the agreement. If the geographic and activity restrictions are tangled together in a single unseverable promise, a Maryland court generally will not rewrite it to make it reasonable — the whole covenant is void instead.
For an employee, this cuts both ways: an overly broad non-compete is not automatically unenforceable just because it’s overly broad — a court may narrow it rather than void it, meaning you shouldn’t assume you’re free and clear simply because your employer’s agreement was poorly drafted. For an employer, it means that careful, deliberately severable drafting (separating duration, geography, and scope into distinct clauses) significantly improves the odds that at least some version of the restriction survives a legal challenge.
Talk to a Non-Compete Attorney
Whether you’re being asked to sign a new non-compete, negotiating one as part of a job offer, or trying to figure out if an old one still applies to you, Wilkenfeld Law Office can help you understand where you actually stand.
Or call 301.245.3035 · Intake@WilkenfeldLO.com
This article provides general information and is not legal advice. Contacting us does not create an attorney-client relationship.
Reviewed by Ari Wilkenfeld, Esq. (DC Bar No. 461063; MD Bar No. 9806240300). Ari has over 27 years of experience litigating in federal and state courts, and before the U.S. Equal Employment Opportunity Commission (EEOC), the U.S. Merit Systems Protection Board (MSPB), and various arbitration panels. Ari has been recognized by Esquire Magazine as “a famously determined Civil Rights lawyer” and by the New York Post as “a high powered DC Lawyer.” Last updated: August 28, 2026.