A new D.C. law that takes effect on October 1, 2022, will significantly limit the ability of employers to tie their District of Columbia-based employees to noncompetition agreements.

What happened?

In July 2022, the Council of the District of Columbia passed the Non-Compete Clarification Amendment Act of 2022 (2022 Act), which, as the name suggests, amended D.C.’s prior attempt to regulate noncompetes, the Ban on Non-Compete Agreements Amendment Act of 2020 (2020 Act). The 2020 Act would have imposed perhaps the broadest ban on noncompete agreements in the country—banning even agreements that prohibit work for a competitor during employment—but following outcry from the business community, the 2020 Act’s effective date was delayed while the Council considered amendments.

The 2022 Act is more business friendly than the earlier version but still imposes substantial restrictions on noncompetition agreements.

What is prohibited?

The biggest prohibition is the 2022 Act’s outright ban on “noncompete” agreements for D.C.-based employees who make less than $150,000 per year (or less than $250,000 if the employee is a physician). This compensation threshold is far higher than those of neighboring jurisdictions. Maryland prohibits non-competes only for those who make less than $15 per hour/$31,200 per year and Virginia prohibits them only for employees who make less than approximately $67,000 per year.

Noncompete agreements for “broadcast employees” (e.g., anchors, disc jockeys,...

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