October 3, 2022

Volume XII, Number 276

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October 03, 2022

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DC Council Passes Bills Amending Non-Compete Ban

On July 12, 2022, the Council of the District of Columbia voted to amend the District of Columbia’s Ban on Non-Compete Agreements Amendment Act of 2020 (the “Act”). Implementation of the Act has been delayed on several occasions and is currently set to occur on October 1, 2022. 

As ArentFox Schiff previously outlined, the Council initially passed the Act on December 15, 2020. If implemented, the Act would largely ban employers from requiring their DC employees to sign non-compete agreements. Other key provisions of the Act include:

  • Employers must provide their employees with a written notice regarding the ban on non-compete agreements.

  • Employers may not retaliate against an employee for refusing to sign a non-compete, asking or complaining about the existence, applicability, or validity of a non-compete provision, or requesting the employer provide the written notice language required by the Act.

  • A carve-out for agreements restricting employees from disclosing employer confidential information, and for non-compete agreements entered into in conjunction with the sale of a business. 

During its June 28 session, the Council passed the Act on first reading. Additionally, Councilmember Pinto offered an amendment to lower the Act’s $250,000 compensation threshold to $150,000, which would permit the use of non-compete agreements with employees whose annual compensation is $150,000 or higher. The amendment makes changes to the definition of “compensation” to include unrestricted stocks and “other payments provided on a regular or irregular basis” to provide a more accurate reflection of the true amount an employee is earning in their job. Councilmember Pinto’s amendment overrode a prior amendment that had been proposed by Councilmember Silverman, which would have reduced the salary threshold to $200,000 annually. 

On July 12, the Council met again and passed the Act, along with Councilmember Pinto’s amendment, on second reading. The Act is now headed to Congress for a mandatory legislative review period of 30 Congressional working days, and will take effect once that review period has concluded. However, the Council also passed an identical emergency bill at the July 12 session, which will take effect as soon as it is signed by the Mayor. The emergency bill will remain in effect long enough to bridge the gap until the permanent bill takes effect at the end of the Congressional review period.

The Act will not impact non-compete agreements that are signed prior to October 1, 2022. However, moving forward, employers should immediately review and revise their existing employment agreements and policies to come into compliance with the Act.

© 2022 ArentFox Schiff LLPNational Law Review, Volume XII, Number 213
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About this Author

Linda M. Jackson
Partner

Linda represents clients in high-stakes counseling and litigation before federal, state, and appellate courts. She has a particular focus in the District of Columbia and the Eastern District of Virginia, also known as the “Rocket Docket,” as well as the state trial courts in Northern Virginia.

Linda has represented clients in a variety of industries,  such as technology, government contracting, professional services, associations, telecommunications, commercial and residential development, airlines and more.

Linda...

202-775-5785
Michael L. Stevens ArentFoxSchiff
Partner

Mike is active in firm management. He previously served on the firm’s Executive and Financial Management Committees and currently sits on the firm’s Compensation Committee. In addition to being a Practice Group Leader, he co-manages the firm’s Litigation Department.

202-857-6382
Jon S. Bouker Government Relations Lawyer Arentfox Schiff Law Firm
Partner and Government Relations Practice Co-Leader

Jon brings extensive experience in the US Congress, which he puts to work serving clients on a wide variety of general business and government relations matters.

He represents clients before Congress, the White House and federal agencies (particularly the General Services Administration), the government of the District of Columbia, and surrounding counties. Jon is the Co-Chair of the firm’s Pro Bono Committee.

Client Work

Jon’s work on local projects has included:

    ...
202.857.6183
Alexandra M. Romero Federal Litigation Attorney Arentfox Schiff Law Firm
Partner

Alexandra has represented clients in numerous industries during agency proceedings, proposed rulemakings, mediations, arbitrations, and all phases of state and federal court litigation. This representation includes counseling clients regarding compliance with OSHA standards and regulations, investigating workplace incidents, contesting OSHA citations, defending employers in OSHA enforcement actions, and engaging in regulatory advocacy.

In addition, Alexandra is well-versed in the areas of Title VII, ADA/FMLA compliance and medical leave issues,...

202.828.3469
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