Bill
SB 658
The bill largely nullifies post‑separation noncompete/conflict restrictions for low/mid‑income workers, direct patient‑care staff ≤$350k, and vets, while allowing limited terms for
Status & Timing
- Introduced: January 25, 2025 (Sen. Ready).
- Assigned to: Senate Finance.
- Effective date in bill text: October 1, 2025.
- Designated cross‑file: HB 1288.
Purpose / Intent
- Clarify and limit the enforceability of noncompete and conflict‑of‑interest provisions in employment contracts or similar agreements as contrary to public policy for certain categories of workers, and to set specific limits for higher‑paid direct patient‑care health workers.
Key provisions (summary)
- Scope and categories covered
- The bill amends Maryland Labor & Employment §3‑716. It applies to employment contracts or similar agreements whether or not the agreement was entered into in Maryland.
- It covers three primary employee groups:
1. Employees earning compensation equal to or less than 150% of the State minimum wage.
2. Employees required to be licensed under the Health Occupations Article who provide direct patient care and earn $350,000 or less in total annual compensation.
3. Veterinary practitioners and veterinary technicians (under the Agriculture Article).
Nullification of restrictions “on separation from the employer”
Special rules for high‑paid direct patient‑care health workers
Who is affected
- Employees: Low‑ and middle‑income workers (≤150% state minimum wage), most direct patient‑care healthcare workers earning ≤$350,000, veterinarians and veterinary techs — who will be protected from post‑separation noncompete/conflict restrictions.
- Higher‑paid direct patient‑care clinicians (> $350,000) — still subject to limited, time‑ and distance‑bounded noncompetes.
- Employers: Health care providers, veterinary practices, small businesses, and other employers who use noncompete/conflict clauses. The bill may constrain employers’ ability to restrict employees’ post‑employment mobility and could affect in‑employment restrictions (see practical implications below).
- Patients: Gain a statutory right to be told, on request, where former clinicians will practice.
Practical / policy implications
- Clarifies that prohibited restrictions apply “on separation from the employer,” which suggests the bill is focused on post‑employment restraints. However, by specifying the post‑separation focus, the bill may also be read to permit employers to restrict concurrent second jobs while an employee remains employed (this is an interpretive point employers and courts may confront).
- Health‑care employers that rely on noncompetes for workforce retention will be limited for the categories protected by the bill; for high‑compensated direct patient‑care clinicians, noncompetes are narrower and time‑limited.
- The bill does not address remedies or penalties for violations beyond nullification of offending clauses; enforcement would be through normal civil means.
Fiscal impact
- Legislative fiscal note: No material effect on State or local finances.
- Small business effect: Potentially meaningful (employers—particularly small practices—may face recruitment/retention impacts and difficulty protecting client relationships without noncompetes).
Context
- The bill aligns with broader national attention to noncompete limits (e.g., proposed/federal FTC rulemaking). It also mirrors trends in several states to restrict noncompetes for lower‑ and middle‑income workers while allowing limited restraints for certain high‑level employees.
For more details
- See the text amending Maryland Labor & Employment §3‑716 and the fiscal note prepared by the Department of Legislative Services.
Compiled from official sources — confirm details with the bill’s official record.
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