As we previously reported, in late 2020, the District of Columbia’s Council passed the Ban on Non-Compete Agreements Amendment Act of 2020 (the “Act”), but more than a year later, employers and employees may still legally enter into binding covenants not to compete. So what happened, and what’s next for non-competes in the District?
The law prohibits D.C. employers from requiring or requesting that an employee sign an agreement that includes a non-compete provision. The Act defines a non-compete as a provision that “prohibits the employee from being simultaneously or subsequently employed by another person, performing work or providing services to pay for another person, or operating the employee’s own business.” Importantly, the Act not only prohibits employers from restricting an employee from working for a competitor after their employment, but also from restricting an employee’s competitive activities while employed by the employer. The Act does not prevent employers and employees from entering into restrictive covenants concerning confidentiality, proprietary or sensitive information, client or customer lists, trade secrets, or a non-compete involving the sale of a business.
The Act also includes a robust anti-retaliation provision, prohibiting employers from taking action against an employee for asking, informing, or complaining about the existence, applicability, or validity of a non-compete provision or a workplace policy that...
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