If your company’s New Years resolution this year involved saving a little bit of money, I’d suggest looking inwards at your restrictive covenants with employees.

Non-competes, non-solicits, and confidentiality clauses can be found in standalone agreements, employment agreements, offer letters, and handbooks. Most were drafted years ago and copied and pasted from one hire to the next – however, statutory and case law may have outpaced your templates without you being aware.

In Maryland alone, non-competes are banned entirely for workers making less than 150% of the minimum wage, healthcare workers making less than $350,000 per year, and veterinarians. That’s a clear-cut list, but it’s also just the tip of the iceberg:

• Many companies try to shoehorn non-compete language into their independent contractor agreements. This, by nature, runs completely afoul of the type of relationship independent contractors are supposed to enjoy. A non-compete with an independent contractor usually isn’t worth the paper it’s printed on – or worse, can be a factor used by the contractor if they thereafter claim they were misclassified and should be an employee.
• For many companies, it is the non-solicitation provision that is actually more important than the non-compete. A properly drafted non-solicit can limit a departing employee from contacting your customers and employees at their new venture. However, Maryland courts consistently find non-solicits to be overbroad unless they are narrowly tied only to those customers and employees whom the employee had contact with during their employment. Worse, Maryland courts are generally loath to rewrite these kinds of agreements. In other words, an overbroad non-solicit agreement may be unenforceable.
• This article to date has focused on Maryland law, and if you own a Maryland business, you may think that’s enough. However, for companies with remote workers, your restrictive covenants will need to be analyzed to determine which state’s law governs those agreements. There is a movement across the country to limit non-competes especially, and if you employ workers in states such as California, Minnesota, or Colorado, be wary of how those state laws may impact your agreements.

An audit of your non-compete and other restrictive covenant agreements can save you on the back end in 2026. Contact an RKW employment attorney to learn more.