District of Columbia Moves to Ban Most Non-Competes

The District of Columbia Council recently passed an Act banning most non-competition agreements entered into after the Act’s enactment.  This is the latest in a trend among states and localities to significantly restrict non-competition agreements for most employees.  The Act, which can be found here, now goes to the Mayor, although it passed with a veto-proof majority.

Like the other laws, the D.C. Act does not affect restrictions preventing employees from disclosing trade secrets, client lists, confidential information or other proprietary information, nor does it apply to non-competition restrictions imposed on a seller as part of the sale of seller’s business. The Act exempts, among others, medical professionals who earn over $250,000 (so long as they are provided the proposed restriction and designated notice language at least fourteen days before execution) and, of all people, casual live-in babysitters.

The Act requires employers to provide designated notice language to employees no later than (a) ninety days after enactment, (b) seven days after hire and/or (c) fourteen days after the employer receives a written request from the employee for the notice language. Importantly, the Act is not retroactive and does not affect existing non-competition restrictions.