Among the most confusing employment contract clauses are those that blur the line between freedom and limitation. For example, the differences between non-compete vs. non-solicitation agreements and how each one can shape your next career move. In a nutshell, both non-compete and non-solicitation agreements limit future actions. However, a non-compete restricts working for competitors, while a non-solicitation clause prevents reaching out to clients or colleagues from your former employer. In Maryland, whether either type of agreement is enforced depends on its scope, reasonableness, and type of restriction.
At Smithey Law Group LLC, our Annapolis-based team focuses exclusively on labor and employment law. With attorneys serving on the Maryland State Bar Association’s Labor and Employment Section Council, authoring leading legal texts, and earning national recognition, our firm provides the authority you need to evaluate and challenge restrictive agreements.
What’s the Difference Between Non-Compete vs. Non-Solicitation Agreements?
Both agreements often appear in employment contracts. Here’s how their reach differs.
Non-Compete Agreements
A non-compete agreement limits an employee’s ability to work for a competitor or start a competing business after leaving their current job. Restrictions are usually framed by industry, geography, and time. For example, a clause might prohibit a financial advisor in Baltimore from joining any competing firm in the region for a period of one year. Courts also require non-competes to protect a legitimate business interest, such as trade secrets or confidential customer lists.
Non-Solicitation Agreements
Non-solicitation agreements restrict an employee from contacting the employer’s clients, vendors, or coworkers to solicit business or staff for another employer. They do not usually prohibit working for a competitor outright, but they do limit how relationships built at the old job can be used at the new one. For instance, a sales executive may join a rival company but cannot reach out to customers they serviced previously. Some non-solicitation clauses extend to recruiting colleagues, which can impact employees who launch startups. Courts often view these agreements more favorably than non-competes, provided they are not drafted so broadly that they block all future contact with any client of the employer.
What Is Maryland Law on Non-Competes?
Maryland limits the reach of non-compete agreements, making non-competes unenforceable for employees earning equal to or less than 150% of the state minimum wage. As of January 1, 2025, that threshold is $22.50 per hour, or about $46,800 annually.
Even for higher earners, Maryland courts scrutinize non-competes for reasonableness. Key factors include:
- The geographic scope of the restriction,
- The duration of the ban, and
- The legitimate business interest the employer seeks to protect.
An agreement that prevents a software engineer from working anywhere in the United States for two years likely goes too far. However, a court may uphold a clause limiting work for direct competitors in the same city for six months.
What Is Maryland Law on Non-Solicitation Agreements?
Courts generally view non-solicitation clauses more favorably. Employers argue these agreements protect goodwill and client relationships rather than stifling career freedom. Still, the restrictions must be reasonable.
For example, valid non-solicitation clauses may:
- Bar former employees from calling on specific clients they served at the old job,
- Prohibit the targeted recruitment of the employer’s staff, or
- Preventing misuse of confidential client lists for competitive gain.
A non-solicitation agreement restriction often provides a narrower scope, which increases the likelihood of enforcement in Maryland courts. Yet, overbroad language, such as bans on all contact with any client of a large corporation, can still render an agreement vulnerable to challenge.
What Does Federal Law Say About Trade Secrets and Contracts?
Beyond state law, federal statutes influence the enforceability of agreements. The Defend Trade Secrets Act of 2016 provides employers with a federal cause of action for the misappropriation of confidential information. Many non-solicitation and non-compete agreements overlap with these protections.
The National Labor Relations Act (NLRA) also imposes restrictions. The National Labor Relations Board has scrutinized broad non-compete agreements that interfere with employees’ rights to seek new employment or organize. This evolving landscape means agreements once considered standard now face new challenges under federal law.
Non-Solicitation Agreement vs. Non-Compete Agreement Practical Considerations
When evaluating these agreements in your own employment contract, focus on what each clause truly restricts. For example:
- Career options. A non-compete may remove entire industries or regions from future job options.
- Client relationships. A non-solicitation clause targets who you can call on, but not where you can work.
- Colleague connections. Many non-solicitation provisions extend to coworkers, limiting recruitment of former team members.
- Future leverage. Overbroad or unreasonable restrictions may be challengeable in court, creating negotiation opportunities.
Understanding these restrictions helps employees weigh the risks before accepting new roles or starting a business.
What Common Mistakes Do Employees Make Reviewing Agreements?
Common errors include:
- Signing contracts without reviewing restrictive covenants;
- Assuming all restrictions are enforceable when Maryland law may strike them down;
- Believing non-solicitation clauses only apply to direct sales positions;
- Ignoring the overlap with federal trade secret protections; and
- Overlooking how non-solicitation provisions can restrict recruiting former colleagues, not just contacting clients.
Avoiding these mistakes requires early review, careful analysis, and often, legal guidance.
Want to Understand the Difference Between Non-Solicitation Agreement Vs. Non-Compete Agreement Restrictions? Smithey Law Group LLC Can Help.
Agreements that limit future work require more than a glance. Employees deserve transparency before signing and protection in the event of disputes. At Smithey Law Group, our attorneys bring unmatched authority in this area. Our lawyers:
- Serve on the Labor and Employment Section Council and the Board of Governors of the Maryland State Bar Association;
- Author key texts such as the Maryland Rules Commentary and contribute to the Maryland Employment Law Deskbook;
- Appear in The New York Times, MSNBC, U.S. News and World Report, and other national outlets; and
- Earn recognition from Chambers Band 1 Rankings, Lawdragon, Super Lawyers, and Best Lawyers.
This collective knowledge and experience positions us as a leader in challenging, negotiating, and advising on restrictive covenants.
Understand and Protect Your Job Rights
If you are weighing a new job offer, leaving your current employer, or facing enforcement of an agreement, Smithey Law Group LLC stands ready to help. With a focus solely on employment law, our firm works for you to understand your rights, the risks associated with them, and your options. Restrictive agreements may feel binding, but with the right counsel, you can take confident steps toward your future.
