The Washington, D.C. City Council passed a broad ban on noncompete agreements in December 2020, but it decided in March 2022 that amendments were needed to address questions raised by the business community.
The D.C. Non-Compete Clarification Amendment Act of 2022 amends the Ban on Non-Compete Agreements Amendment Act of 2020 "to clarify which provisions in workplace policies or employment agreements will not violate the law's restrictions on the use of non-compete provisions and agreements."
For example, the amendments provide that employers may bar an employee's use and disclosure of confidential and proprietary information (trade secrets) during and after the employee's employment for the employer. Importantly, D.C. Bill 24-256 also provides a framework allowing the use of non-competes under certain circumstances.
In lieu of the original outright ban, D.C. Bill 24-256 now makes non-competes unenforceable only for employees earning $150,000 or less in compensation annually (or $250,000 or less for medical specialists). Broadcast employees, as defined, are excluded.
As amended, the law permits enforcement of restrictive covenants for highly compensated employees (HCEs) — those receiving annual compensation exceeding $150,000. Included in the calculation of compensation for HCEs are hourly wages, salary, bonuses or cash incentives, commissions, overtime premiums, vested stock (including restricted stock units), and other payments provided on a regular or irregular basis....
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