In July 2019, Maryland banned non-compete clauses for employees who earn $15 an hour or $31,200 a year, or less. In 2020, neighboring Virginia passed a law prohibiting non-competes for “low-wage employees” (individuals earning less than $1,137 a week or $59,124 a year). The District of Columbia rounded out the metropolitan area’s coverage of the issue with its own law in 2021, although the D.C. law was far more expansive than those in Maryland and Virginia. The D.C. law has never taken effect.
D.C. has now walked back some of the restrictions contained in the first version of the law. The amended law is scheduled to go into effect on November 10.
In the 2021 version of the law, D.C. generally prohibited any non-compete provision, which it defined as one that “prohibits the employee from being simultaneously or subsequently employed by another person, performing work or providing services for pay for another person, or operating the employee’s own business.” The law exempted provisions that (1) restricted the “disclos[ure]” of confidential, proprietary, or sensitive information, (2) were included as part of the sale of a business, or (3) applied to medical specialists making at least $250,000 per year. The law also prohibited retaliation and included a notice requirement. Violations were subject to civil penalties, and affected individuals could also file private lawsuits against their employers or former employers.
The effective date was continually delayed as a result of...
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