Is Your Non-Compete Agreement In The DMV Area Enforceable?

Article Summary

The collapse of the Federal Trade Commission’s nationwide non-compete ban in 2024 left many wondering whether their own non-compete agreements are still enforceable. The answers lie mostly in the hands of state laws. Washington, D.C., Maryland, and Virginia all allow for non-compete agreements to varying degrees. D.C. has the broadest ban against non-compete agreements while Virginia skews more employer-friendly and Maryland straddles the line between them. But employees in each state do have options for fighting back against restrictive post-employment contracts.

Non-competitive agreements and other restrictive covenants have long been used by employers to restrict former employees’ ability to work for competitors, solicit clients, or start rival businesses. Attempts have been made to ban or limit the scope of these agreements, but it’s a continuing battle.

A federal rule that would have limited non-compete agreements nationwide was swiftly struck down by a Texas court in April of 2024. The rule’s sudden rise and fall left employees and employers wondering whether their own agreements were still enforceable.

In Washington, D.C., Maryland, and Virginia, non-competes are indeed still legally enforceable. However, state laws have restricted — and in some cases, complicated — these agreements. There is some wiggle room for employees to fight against unfair clauses.

Federal Backdrop

The Federal Trade Commission (FTC) issued a rule in April of 2024 banning most non-compete clauses in employment agreements, stating that they were an “unfair method of competition.” Even employees who are not subject to non-competes can be negatively impacted by their existence.

According to the FTC, non-compete agreements suppress wages across the labor market and stifle competition.¹ The agency estimated that its non-compete ban would have boosted workers’ earnings by more than $400 billion over a decade by enabling greater job mobility for employees or giving them more leverage for wage negotiations in their existing jobs. The restrictions imposed by non-competes can not only limit an individual’s job growth but also keep an industry’s standard pay rate lower than it would be if employees had more power.

The FTC’s non-compete rule faced significant legal challenges. In Ryan LLC v. FTC, the U.S. District Court for the Northern District of Texas determined that the FTC didn’t have the statutory authority to make substantive rules against non-compete clauses.² The court vacated the FTC’s rule, stating that the ban was overly broad and would have made most non-competes unenforceable. Under the Trump administration, the FTC abandoned efforts to defend its ban. The commission dismissed its appeals in Ryan LLC v. FTC and Properties of the Villages v. FTC in September of 2025.

Jennifer Abruzzo, former general counsel of the National Labor Relations Board (NLRB), also opposed non-competes. She issued two memoranda — one in 2023 and one in 2024 — stating that restrictions like non-competes were unlawful and violated the National Labor Relations Act. However, these memoranda were rescinded on February 14, 2025, by the acting NLRB general counsel, William B. Cowen.

Nevertheless, the FTC continued to combat deceptive labor practices through the creation of a Joint Labor Task Force that intends to target case-by-case enforcement of anticompetitive practices.

Federal enforcement efforts are uncertain and limited, however. State law thus remains the primary source of authority when determining the enforceability of non-competes. In the DMV area, approaches to non-competes vary significantly.

Washington, D.C.

Washington, D.C., has largely restricted non-compete agreements, but there are exceptions based on the type of employee or the wages they receive.

The D.C. Ban on Non-Compete Agreements Amendment Act of 2020 protects employees from being required to sign non-compete agreements. The Act prohibits retaliation against those who refuse to sign and includes other protections, including a requirement for employers to notify employees of any non-compete provisions at least 14 days before execution.

However, the law went into effect on October 1, 2022, and only applies to non-compete agreements signed on that date or thereafter. If an employee willingly signed an agreement before October of 2022, the non-compete is valid and enforceable. Non-competes signed after the Act’s effective date are not enforceable (with some exceptions).

The Act defines an employee as an individual who works in D.C. on behalf of an employer or a prospective employee whom the employer reasonably anticipates will work in D.C. In other words, D.C.’s ban on non-competes protects:

• Employees who spend 50% or more of their time working in D.C., or
• Employees who spend a substantial amount of their time working for an employer based in D.C.

The Act does not protect people such as volunteers or members elected or appointed to office for a religious organization and engaged in religious functions.

People earning above a certain wage threshold are considered “highly compensated employees” and can also be subject to non-compete agreements.³ The threshold changes each year based on the Department of Labor’s Consumer Price Index for All Urban Consumers in the Washington Metropolitan Statistical Area. At the time of publishing this article, “highly compensated employees” are those expected to earn about $162,164 or more in a consecutive 12-month period. Medical specialists are allowed a higher threshold. They would need to make at least $270,274 for a non-compete to be enforceable.

Broadcast employees — such as anchors, reporters, and producers — are an exception to the exception. They cannot be held to non-compete agreements no matter how much money they make.

Employees who fall under the listed exceptions aren’t fully protected by D.C.’s ban, but their non-compete agreements must include the following to be enforceable:⁴

1. The function and scope of the competitive restriction, which must specify the service, industry, role, or competing entity;
2. The restriction’s geographic scope; and
3. The length of the restriction, which cannot exceed 365 days from the employee’s separation (or 730 days if the employee is a medical specialist.)

D.C.’s broad ban against non-competes means that many D.C. employees can’t be held to a non-compete agreement. D.C. courts, however, permit employers to use alternative restrictions — such as anti-solicitation, anti-disclosure, and confidentiality agreements — if they protect business interests without causing undue restraint on competition.

In Morgan Stanley DW Inc. v. Rothe,⁵ the court determined that the non-solicitation agreement was reasonable because it only restricted the former employee from competing within a 100-mile radius for a year and did not prevent the company’s former clients from reaching out to the employee (although vice versa was prohibited). Several court cases have found that non-solicitation agreements are a legitimate way to protect a business⁶ and that courts must consider the potential impact on the business’s interests before invalidating the agreements.⁷

D.C.’s non-compete ban was modified in July of 2022, allowing for non-disclosure agreements that would ban former employees from using a company’s confidential and proprietary information. The U.S. District Court for the District of Columbia has additionally recognized that it’s in the public’s interest to protect confidential business information and trade secrets.⁸

Maryland

Maryland generally bans non-competes for low-wage workers and certain jobs. Under Maryland state law, non-compete agreements are void for employees who earn less than 150% of the state’s minimum wage rate. This threshold was about $46,800 annually (or less than $22.50 hourly) in 2025.⁹

Veterinary practitioners and technicians are also protected from non-competes,¹⁰ even if they earn more than the threshold. Maryland’s ban extended to cover licensed health professionals in July of 2025 if they provide direct patient care and earn $350,000 or less in total annual compensation.

Non-compete agreements for healthcare workers who don’t meet those requirements are not banned, but they do have limits. The agreement cannot last longer than one year, and the geographic restriction cannot be greater than 10 miles from the healthcare worker’s former primary place of employment. If any patient requests information, employers are also required to tell them where the former employee is now practicing.

Non-competes outside of these limitations are evaluated using the “rule of reason” balancing test. Maryland courts will weigh an employer’s business interests against any hardship to the employee or the public interest to determine whether a non-compete is reasonable.¹¹ The test may consider factors such as:

• Trade secrets or confidential information that may be at risk;¹²
• Unfair restrictions on the employee’s earning capacity; or
• Limits on the public’s access to services.¹³

The general rule from Maryland caselaw is that a restrictive covenant can be enforceable if the requirements are limited with regards to the geographical area and/or duration.¹⁴ A noncompete clause explicitly restricting an employee from working in a large area can be found reasonable if limited to the area where the employee actually worked and interacted with the employer’s customers.¹⁵

The court in Ruhl v. F. A. Bartlett Tree Expert Co. upheld a non-compete clause, finding that the two-year limitation was reasonably short. The court also found that the geographic restriction, which covered six counties, was reasonable because that is where the former employee actually provided services.¹⁶

In Hebb v. Stump, Harvey & Cook, Inc., however, the non-compete was only partially upheld. The agreement banned the former employee from soliciting the employer’s current customers or prospective customers that the employer was actively attempting to do business with for a period of two years.¹⁷ The court found that “prospective customers” was an overly broad and difficult-to-determine category, making that aspect unenforceable. The agreement was otherwise acceptable. It didn’t specify a geographic area, but Ruhl had previously established that there were circumstances in which a large geographic area was still reasonable. The court in Hebb felt that the restrictions on current customers and duration made the non-compete sufficiently limited.

Aspects of a non-compete provision that are found to be unenforceable can be modified or struck using the “blue pencil rule.” The rule allows Maryland courts to remove only the unenforceable language while leaving the rest of the non-compete clause intact. Courts would be prohibited from rewriting or supplementing the original contractual terms, however.¹⁸

There may be overlap where an overly broad non-compete clause is referred to or connected to promises in other clauses. The court might feel that the non-compete clause should be unenforceable, but it needs to consider another question: Can it remedy the issue by only removing the unenforceable part, or would they have to rewrite other parts of the contract to adjust for the missing part? The latter would essentially result in a new contract with terms that the original parties did not create and agree to together.

The court in Aerotek, Inc. v. Obercian found that the non-compete clause was “impermissibly broad” because it prohibited the employee from working for any business that engaged, or was preparing to engage, with any aspect of Aerotek’s business.¹⁹ The court also stated that the blue pencil rule could only be used if the unenforceable language is “neatly severable.”²⁰ The terms within the contested clause must be separate and distinct from other promises made in the contract.²¹

In Allegis Group, Inc. v. Bero, the court stated that restrictive covenants (i.e., non-solicitation or non-compete clauses) must be specific and help protect the employer’s interests.²² The non-solicitation clause in the case was unenforceable because it extended to cover customers the former employee hadn’t interacted with through their job and even prospective customers, which the court in Hebb had already determined was an unreasonable limitation.²³ The court also declined to use the blue pencil rule to limit the non-solicitation clause because the court would have to rewrite the entire clause instead of taking out a single sentence to fix the issue.

The blue pencil rule only allows Maryland courts to remove language to make a non-compete clause enforceable. The rule does not allow the courts to add or edit any language. It may be impossible for the court to fix a non-compete clause without touching the rest of the contract, in which case the court has to turn back to the “rule of reason” balancing act and make an all-or-nothing decision regarding the contract.

Maryland continues to expand its restrictions — as evidenced by Maryland House Bill 1288 (Feb. 2025), where legislators proposed a total ban on non-competes.

Virginia

Virginia — unlike D.C. and Maryland — lands more on the side of non-competes. They are permitted for the most part, although Virginia does frown upon agreements that restrict trade. Non-competes are enforceable only if they are:

1. Narrowly drawn;
2. Not unduly burdensome; and
3. Consistent with public policy.²⁴

Virginia does have a statutory ban as of 2020 on non-competes for “low wage” employees, which was initially defined as workers earning $76,081.14 or less annually. The ban has since been extended to cover all non-exempt employees under the Fair Labor Standards Act.²⁵

Virginia courts do not allow for modifications using the blue pencil rule. Instead, Virginia either enforces or strikes an entire non-compete clause. Ambiguous clauses are usually construed in favor of the employee.²⁶

Virginia courts examine many of the same factors that D.C. and Mayland look at when determining whether a non-compete is reasonable: the employer’s business interests; trade secrets; functional scope; geographic area; and duration.²⁸ Non-competes restricted to a 50-mile area and one to three years are generally found to be reasonable.²⁹ Non-competes with a duration of five years have been upheld in some rare circumstances.³⁰

Specificity is, once again, key in a non-compete agreement. A Virginia court tossed out a non-compete clause in Home Paramount Pest Control Companies, Inc. v. Shaffer, finding that it was overly broad. The clause prohibited the former employee from working in the pest control industry in any capacity when it should have instead been limited to the activities the company actually engaged in. Conversely, the court in Preferred Sys. Solutions, Inc. v. GP Consulting, LLC found that the non-compete was enforceable despite the lack of geographic limitation because the clause was narrowly drawn to a particular project.³¹

Comparison of DMV Approaches

D.C. has the strictest approach against employers, banning non-competes for most employees. Even the few exceptions are protected by D.C.’s requirement for detailed and specific clauses. Maryland occupies a middle ground, only restricting non-competes for low wage workers and certain professions. Virginia has a broad allowance for non-competes, but it has a categorical ban for low wage/non-exempt employees.

D.C. and Maryland courts are more flexible when it comes to interpreting disputed non-competes. Both look at agreements on a case-by-case basis to determine whether they’re reasonable, and Maryland courts have the added ability to use the blue pencil rule to modify otherwise unenforceable non-competes into reasonable restrictions. Virginia courts do not allow for modifications and interpret the relevant laws more strictly. This approach can be helpful for employees in situations where the court determines an aspect of a non-compete is overly broad. In that case, the court would likely find the overall non-compete unenforceable and strike down the entire clause.

However, Virginia is comparatively employer friendly. The state is expanding its statutory employee protections, but courts are still cautious when interpreting restrictive covenants and err on the side of protecting employers’ interests. Maryland is incrementally broadening its ban and may, one day, fully prohibit non-competes. At the moment, D.C. is the most pro-employee and applies the most restrictions to protect workers.

Conclusion

Federal attempts at restricting non-competes have been stunted. The FTC now applies a case-by-case enforcement framework following the failure of its ban, and the NLRB has retreated from non-compete activism under Acting General Counsel William B. Cowen.

Thus, the regulation of restrictive post-employment clauses lies largely in the hands of state law. The DMV has a range of approaches when determining the enforceability of these contracts, but the area overall has significant restrictions against non-competes, especially for low-wage and healthcare workers. In the future, there may be movement towards broader bans. The FTC is surely keeping an eye on the DMV area as “laboratories for policy experimentation” that may help inform future federal law.

If you have already signed a non-compete or your employer is asking you to sign one as a condition of employment, call The Employment Law Group.

Footnotes

1. 16 C.F.R. Part 910.

2. Ryan, LLC v. Fed. Trade Comm’n, 746 F. Supp. 3d 369, 388 (N.D. Tex. 2024).

3. D.C. Law 23-209, 68 DCR 000782 (Mar. 16, 2020).

4. Non-Compete Clarification Amendment Act of 2022, D.C. Law 24-175, 69 D.C. Reg. 9910 (Sep. 21, 2022)

5. Morgan Stanley DW Inc. v. Rothe, 150 F. Supp. 2d 67, 74 (D.D.C. 2001).

6. Ellis v. James V. Hurson Assocs., Inc., 565 A.2d 615, 620 (D.C. 1989).

7. Steiner v. Am. Friends of Lubavitch (Chabad), 177 A.3d 1246, 1262 (D.C. 2018) (citing Loral Corp. v. Moyes, 174 Cal. App. 3d 268, 279, 219 Cal.Rptr. 836 (Cal. Ct. App. 1985)).

8. Robert Half Int’l Inc. v. Billingham, 315 F. Supp. 3d 419, 435 (D.D.C. 2018).

9. See Md. Code Ann. § 3-716 (2019).

10. See Md. Code Ann., Lab. & Empl. § 3-716 (2025)

11. See Becker v. Bailey, 268 Md. 93, 299 A.2d 835 (1973).

12. See Silver v. Goldberger, 231 Md. 1, 188 A.2d 158 (1963).

13. See Holloway v. Faw, Casson & Co., 319 Md. 324, 572 A.2d 510 (1990).

14. Hebb v. Stump, Harvey & Cook, Inc., 25 Md. App. 478, 488, 334 A.2d 563, 569 (1975).

15. Ruhl v. F. A. Bartlett Tree Expert Co., 245 Md. 118, 126, 225 A.2d 288, 293 (1967).

16. Ruhl v. F. A. Bartlett Tree Expert Co., 245 Md. 118, 126, 225 A.2d 288, 293 (1967).

17. Id. at 566.

18. See Deutsche Post Glob. Mail, Ltd. v. Conrad, 116 F. App’x 435, 439 (4th Cir. 2004).

19. Aerotek, Inc. v. Obercian, 377 F. Supp. 3d 539, 547 (D. Md. 2019).

20. Id.

21. See Deutsche Post Glob. Mail, Ltd. v. Conrad, 116 F. App’x 435, 439 (4th Cir. 2004).

22. Allegis Grp., Inc. v. Bero, 689 F. Supp. 3d 81, 125 (D. Md. 2023), aff’d, No. 23-2023, 2025 WL 2141298 (4th Cir. July 29, 2025).

23. Id.

24. Omniplex World Servs. Corp. v. U.S. Investigations Servs., Inc., 270 Va. 246, 249, 618 S.E.2d 340, 342 (2005).

25. Va. Code Ann. § 40.1-28.7:8 (West).

26. Pais v. Automation Products, Inc., 211 V. 157 (1970); Lanmark Tech., Inc. v. Canales, 454 F. Supp. 2d 524 (E.D. Va. 2006).

27. See Blue Ridge Anesthesia & Critical Care, Inc. v. Gidick, 239 Va. 369, 372, 389 S.E.2d 467, 469 (1990); Roanoke Eng’g Sales Co. v. Rosenbaum, 223 Va. 548, 552, 290 S.E.2d 882, 884 (1982).

28. Home Paramount Pest Control Companies, Inc. v. Shaffer, 282 Va. 412, 415, 718 S.E.2d 762, 764 (2011).

29. See Advanced Marine Enterprises, Inc. v. PRC Inc., 256 Va. 106, 501 S.E.2d 148, 155 (1998); Update, Inc. v. Samilow, 311 F. Supp. 3d 784, 789 (E.D. Va. 2018).

30. See Zuccari, Inc. v. Adams, 42 Va. Cir. 132 (1997).

31. Preferred Sys. Sols., Inc. v. GP Consulting, LLC, 284 Va. 382, 394, 732 S.E.2d 676, 682 (2012).

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