The long-awaited Washington, D.C. non-compete and anti-moonlighting law finally went into effect on Oct. 1, 2022. At the end of 2020, the Washington, D.C. Council passed the Ban on Non-Compete Agreements Amendment Act of 2020. The act faced immediate and significant pushback from employers, which led to its implementation date being repeatedly postponed. After public comment and input from employers, Mayor Muriel Bowser signed the Non-Compete Clarification Amendment Act of 2022 into law on July 27, 2022 (the “Amended Act”). While the Amended Act still limits the scope of non-competition agreements in the District, it is more employer-friendly than the previous iteration.
Under the Amended Act, D.C. joins other jurisdictions, such as Illinois and Colorado, in establishing salary-threshold limits on non-competition agreements. Specifically, non-competes are limited to “highly compensated employees,” defined as those employees whose annual compensation earnings as of Oct. 1 are, or are expected to be, $150,000 or more, or $250,000 or more in the case of physicians. “Compensation” for the purposes of the Amended Act includes hourly wages, salary, bonuses or cash incentives, commissions, overtime, vested stock, and other regular or irregular payments.
The Amended Act specifies that restrictions on non-competes only apply to employees (a) who spend or are reasonably anticipated to spend 50% or more of their working time in DC; or (b) “[w]hose...
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