Friday, January 8, 2021
The District of Columbia Council has passed the Ban On Non-Compete Agreements Amendment Act of 2020 (“the Act”). If it goes into effect (and we are monitoring closely whether it will), it will almost entirely ban non-compete agreements in D.C., prohibiting employers from restricting an employee’s employment by a competitor and giving D.C. the distinction of joining California, North Dakota, and Oklahoma, with one of the broadest statutory bans of non-compete agreements in the United States.
The Act Covers Most Employers and Employees
The Act applies to all D.C. employers and most employees working in D.C., regardless of how much the employee earns. In this way, the Act is more restrictive than many states’ recently passed limitations on non-competes, which ban non-competes only for lower paid employees. The D.C. Act, however, does exclude the following from its definition of a covered “Employee”: unpaid volunteers, lay members elected or appointed to office within any religious organization, babysitters, and medical specialists (defined as licensed physicians who have completed residency with a total compensation of $250,000 per year). While these occupations are exempted, other than medical specialists, we note that non-competes are rarely, if ever, used — and are likely unenforceable even under existing common law principles — for these occupations.