In July 2022, the DC Council approved modifications to its previously enacted Ban on Non-Compete Agreements Amendment Act (the "Act"), previously discussed here. The Act, which had yet to take effect, contained some of the strictest prohibitions on employee non-compete clauses in the country and effectively barred employers in most circumstances from using non-compete agreements, both during the employee's tenure and after their termination. The recently approved Non-Compete Clarification Amendment Act of 2022 (the "Amendment") scales back some of the more extreme portions of the Act (together, the "Amended Act"). The Amended Act goes into effect October 1, 2022, barring congressional action.

Below, we detail many of the key revisions made to the Act, but in short, employers remain prohibited from entering into non-compete agreements with many of their employees. Employers may enter into non-compete agreements with their "highly compensated" employees under certain conditions, including:

• Limiting the agreement to one year after separation from employment
• Detailing exactly what roles, industries, or competing entities the individual cannot work in or for, and the geographic scope of the restriction
• Providing individuals with the agreement, in writing, at least 14 days before the start of employment or the required date for execution of the agreement

Employers also need to provide specific notice language advising the employee of the new law and its limits.

Covered...

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