Business and Legal Insights

The District of Columbia recently passed a new expansive law which bans most noncompetition agreements for employees in the District.  The Ban on Non-Compete Agreements Amendment Act (the “Act”) takes effect on October 1, 2022 and defines “employee” as “an individual who performs work in the District on behalf of an employer and any prospective employee who an employer reasonably anticipates will perform work on behalf of the employer in the District.” 

The Act applies to noncompetition agreements except those for highly compensated medical workers and their employers, unpaid volunteers for educational, nonprofit, or charitable organizations, religious officials and babysitters.

While the Act prohibits noncompetition agreements, it does not ban businesses from entering into agreements with employees that prevent the employee from disclosing confidential or trade secret information.  Additionally, the Act does not prevent the seller of a business from entering into an agreement with the buyer of that business which provides that the seller agrees not to compete with the buyer’s business.

Employers should carefully review their policies and consult with their employment law attorneys to ensure compliance and avoid unintentionally opening themselves up to liability.