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A Continuing Legal Trend – D.C. Ban on Non-Compete Agreements

By April 30, 2021 Employment Law

As of March 16, 2021, employees who perform work in Washington, D.C. cannot be subject to non-compete (i.e., non-competition) restrictions from their current employers.  Meaning, an employer who operates in DC cannot prohibit an employee from working for another employer (or for himself/herself), regardless of whether the work is similar to the employee’s current role and even if the other employer is a competitor.  This D.C. law is the most far reaching of all such  laws to date, as many states, including Maryland and Virgina, have limited their non-compete bans to lower income workers.

Several general points are important to note about this new law:

    1. The DC Ban on Non-Compete Agreements Amendment Act of 2020 applies to almost all employees performing work in D.C. It applies to any employer operating in D.C.
    2. The ban on non-competes applies to current employment (i.e., moonlighting) and subsequent employment.
    3. Non-compete agreements executed before March 16, 2021 may still be enforced, depending upon the terms and parameters of the agreement and other applicable facts and circumstances.
    4. Later this year, applicable employers will need to provide the following written notice to all current and new employees: “No employer operating in the District of Columbia may request or require any employee working in the District of Columbia to agree to a non-compete policy or agreement, in accordance with the Ban on Non-Compete Agreements Amendment Act of 2020.”

As the new law does not prohibit an employer’s right to enforce (i) protections against disclosure of confidential and other sensitive information, trade secrets, client or customer lists, etc. or (ii) the terms of enforceable non-solicitation agreements, company policies, handbooks and written agreements should immediately be reviewed and revised to most effectively protect legitimate company interests while carefully avoiding violation of the new law.

 

Faith E. Harrison

Author Faith E. Harrison

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