DC Mayor Signs Amended Ban on Non-Compete Agreements
In response to widespread criticism of the Ban on Non-Compete Agreements Amendment Act of 2020, which sought to impose a near-total ban on non-competes, the Council of the District of Columbia has amended the law and postponed its enforcement date. The revised ban, named the Non-Compete Clarification Amendment Act of 2022, will be enforced starting October 1, 2022.
The Ban on Non-Compete Agreements Amendment Act of 2020
The District of Columbia Council had passed the original ban in a 12-0 vote on December 15, 2020. Its sweeping provisions prohibited employers operating in the District from restricting employees from working for another employer. The few exemptions to the ban applied to medical specialists earning more than $250,000 annually, religious officials, unpaid volunteers, and babysitters. Similarly exempt from the ban were city and U.S. government employees and buyers and sellers of businesses.
According to an article by the U.S. Chamber of Commerce, the law in its original form would have severely limited most businesses’ ability to safeguard their investments and protectable information.
The Non-Compete Clarification Amendment Act of 2022
The amended Act, which was passed by the council on July 12 and signed into law by Mayor Bowser shortly thereafter, greatly restricts the reach of the original ban. The legislation now applies only to employees who spend most of their time working in D.C. Moreover, while religious officials and unpaid volunteers are no longer excluded from the ban, all highly compensated employees — those earning $150,000 or more annually — are excluded. Finally, the Act limits the type of provision allowed in a non-compete. For instance, contracts cannot prohibit employees from “disclosing, using, selling, or accessing” sensitive or proprietary employer information. Furthermore, contracts cannot prohibit employees from earning anything of value from a person other than the employer if such work would introduce a conflict of interest.
According to the U.S. Chamber of Commerce, these amendments make the Act significantly more palatable to the D.C. business community, as employers will now be able to protect investments and information without curtailing job opportunities for their non-highly compensated employees.
Seek Legal Assistance
If you have been presented with a non-compete agreement, the employment lawyers at the Working Solutions Law Firm, located in New York City and in Livingston, New Jersey, can help ensure that you are getting a fair deal. Contact us today at (201) 817-9650 to schedule a free case evaluation and receive experienced legal counsel.