Ban on Non-Competes in D.C. Enforced Starting October 1, 2022

Starting October 1, 2022, private employers in D.C. cannot prohibit employees (or prospective employees) from being simultaneously or subsequently employed by another person or operating the employee's own business. 

What does it mean?

• Employers should determine whether and what kind of employees are protected by the Ban on Non-Compete Agreements and its Amendement("Ban"). 
• Employers should revisit their written policies and onboarding documents to comply with the Ban.
• Employers should not retaliate (take or threaten any adverse action, reduction of work hours, suspension, termination, or the like) employees for refusing to sign or comply with non-competes.
• Employers should follow the disclosure and notice requirements to make certain non-competes enforceable.

Who does it apply to?

• all private employers operating in D.C.
• with regards to all employees or prospective employees who perform the majority of work in D.C. (there is a criterion for determining whether employees are covered by the Ban or not).

Who does it NOT apply to?

• certain types of medical specialists (there is a criterion for medical specialists)
• highly compensated employees (however, the non-compete for a highly compensated employee must contain certain provisions and comply with notice requirements) who receive compensation of $150,000 or $250,000 for medical specialists (there are criteria on what to include in the compensation). 
• volunteers in educational, charitable, religious, or nonprofit organizations
• religious ministers
• casual babysitters
• partners in a partnership

Please note that if an employee is exempt from the Ban, the employer still must follow disclosure and notice rules with specific language in the notice. 

Does the ban extend to non-disclosure (confidentiality) agreements ("NDA")? 

• No.  The Ban on Non-Compete Agreements Sec. 101(5)(A) specifically allows NDAs.  And employers should take advantage of it and review their NDAs. 

Can a buyer of a business require a seller not to compete?

• Yes.  The Ban also excludes sales of business from the ban.  See Sec. 101(5)(B).  So, a non-compete in the sale of a business setting is allowed. 

Penalties

• $350 - $1,000 per violation as an administrative penalty (imposed by the Mayor)
• $500 - $1,000 monetary relief to employee for each violation (either by administrative action or in a civil lawsuit)
• $1,500 or more in damages to the employee for attempts to enforce an unenforceable non-compete
• $3,000 or more in additional penalties for subsequent violations. 
• $1,000 - $2,500 for retaliation to each employee for each vilation.