Employment restrictive covenants. It sounds like legalese, and it is. But restrictive covenants in employment, meaning clauses in job contracts limiting what you can do after you leave a job, can also affect your entire future.
If you’re unsure how these rules apply to you, Smithey Law Group LLC can help. Based in Annapolis and focused exclusively on employment law, our attorneys are nationally recognized thought leaders. We’ve authored the Maryland Rules Commentary and the MSBA Maryland Employment Law Deskbook. And when it comes to restrictive covenants, we don’t just know the law, we help shape it.
What Exactly Are Employment Restrictive Covenants?
Employment restrictive covenants are legally binding promises an employee makes not to engage in certain types of work, contact certain clients, or disclose specific information after the employment ends. They often appear as non-compete clauses, non-solicitation agreements, or confidentiality provisions—sometimes all three.
These clauses can derail job offers, delay promotions, or lead to costly litigation. But not every restriction is legal, and not every employer has the right to control your career path once you leave their workplace.
What Is the Restrictive Covenants Employment Meaning Under Maryland Law?
Maryland law defines a restrictive covenant in employment as any contract term that limits an employee’s post-employment conduct. That can include:
- Non-compete clauses—which prevent former employees from working for a competitor in a particular area for a specific time;
- Non-solicitation clauses—which bar former employees from reaching out to clients, customers, or coworkers from their previous job; and
- Confidentiality clauses—which prohibit disclosing sensitive business information, trade secrets, or proprietary strategies.
Maryland doesn’t rubber-stamp these clauses. Courts review them carefully and often refuse to enforce them if they go too far. Under Maryland common law, for a restrictive covenant to be enforceable, it must:
- Protect a legitimate business interest (such as trade secrets or customer goodwill);
- Impose a reasonable geographic scope and time duration;
- Not place an undue burden on the employee’s ability to earn a living; and
- Not harm the public interest (for example, by depriving communities of necessary services).
The moment a clause overreaches, by being too broad, too vague, or too punitive, it risks getting struck down.
Does Maryland Have a Ban on Non-Competes for Lower-Wage Workers?
Maryland has gone even further in protecting employees at the state level. Under Maryland labor laws, any non-compete or conflict of interest provision is null and void if:
- The employee earns $15/hour or less; or
- The employee’s annual income is $31,200 or less.
This law reflects the principle that low-wage workers should not be prevented from earning a livelihood simply because they left one job to pursue another.
Federal Enforcement and National Trends
Although state law primarily governs employment restrictive covenants, the Federal Trade Commission (FTC) recently proposed a rule that would ban most non-compete agreements nationwide. While the rule remains under review, it signals growing federal pressure against contracts that limit employee mobility.
Meanwhile, the National Labor Relations Board (NLRB) has taken the position that overly broad non-competes may violate the National Labor Relations Act (NLRA) by restricting protected concerted activity, especially for non-supervisory employees.
Even if your agreement was drafted years ago, legal winds have shifted, and it may no longer be enforceable.
Are All Employment Restrictive Covenants the Same?
Employment restrictive covenants are not all the same. Here’s how they differ.
Non-Compete Agreements
Typically, these are seen as the most aggressive of the restrictive covenants. Non-competes stop you from working in the same field or for a competing company after your departure. In Maryland, courts often strike these down if:
- The geographic scope is too wide (i.e., nationwide or global),
- The duration exceeds two years, or
- The employee was not a key executive or privy to confidential information.
Even when included in high-level contracts, non-competes face serious scrutiny in Maryland courts and often collapse under the weight of their overreach.
Non-Solicitation Agreements
These target your relationships. They may prohibit you from:
- Reaching out to past clients,
- Recruiting coworkers to join a new venture, or
- Using the contact lists you developed on the job.
Courts are more likely to enforce these than non-competes, but the terms must still be narrow and reasonable.
Confidentiality or Non-Disclosure Agreements (NDAs)
These prohibit the use or disclosure of proprietary information. NDAs tend to be enforceable, especially if they focus on trade secrets. However, overly broad language can be challenged.
What Happens If You Violate a Restrictive Covenant?
Consequences can include:
- A cease-and-desist letter,
- A lawsuit seeking an injunction to stop you from working,
- A demand for financial damages, and
- Reputational harm with future employers.
However, none of this happens in a vacuum. Courts weigh the facts, scrutinize the contract, and examine whether the clause serves a legitimate purpose. Employees have rights and robust defenses, especially when restrictions interfere with their ability to work.
What Should You Do If You’re Asked to Sign a Restrictive Covenant?
Before you sign anything, take these steps:
- Read the fine print. Don’t gloss over legalese. Understand what the clause limits, how long it lasts, and what happens if you breach it.
- Ask for clarification. If any language seems vague or extreme, get an explanation in writing.
- Negotiate the terms. Employers often expect pushback and may be open to modifying overly broad restrictions.
- Consult an employment attorney. Maryland contract law is nuanced, and the enforceability of a clause may depend on how it’s drafted, your role, and evolving precedent.
Even if you’ve already signed, you may still have options. The law often protects employees from unreasonable restrictions.
Your Career Deserves More Than a Clause
At Smithey Law Group LLC, employment law isn’t a side practice. It’s the core of everything we do. Our attorneys are trusted authorities in the field, regularly published in legal journals, and invited to speak at national conferences. We’ve earned recognition from Best Lawyers, Super Lawyers, Lawdragon, Chambers USA, and more. Whether you are questioning the implications of restrictive covenants, reviewing a job offer, or navigating a legal threat, we provide clear answers, strategic guidance, and a fierce commitment to protecting your future. Let our award-winning legal team help you move forward with confidence.
