A new DC law restricts DC employers from entering into non-compete agreements with employees earning less than $150,000 as of October 1, 2022, whereas the prior iteration of the law would have imposed a near universal ban on non-competes.

09.28.22

In January 2021, DC enacted a sweeping ban on almost all employer restrictions against employees engaging in other compensated work either during or after employment. In response to employer concerns, the applicability date of that law was repeatedly pushed back, so it never went into effect. On July 27, 2022, Mayor Bowser signed into law the Non-Compete Clarification Amendment Act of 2022 (the Act), which significantly updates and narrows the scope of the prior restrictions. Most notably, the Act:

• permits and provides guidelines for employers entering into non-compete agreements with highly compensated employees;
• allows anti-moonlighting policies that prohibit conduct posing a conflict of interest;
• permits restrictions on competition that protect against use or disclosure of confidential or proprietary information;
• allows restrictions on competition if supported by long-term incentive compensation;
• caps the permitted duration of any non-competition restriction;
• protects against retaliation for certain inquiries or actions;
• establishes notice requirements; and
• provides for penalties and damages for violations.

Absent congressional action during the mandatory review period, the Act will take effect on October 1, 2022....

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