A Washington DC Non-Compete Agreement is used to prevent an employee from working for a competitor or rival to an employer during or after leaving a job.
They are allowed, subject to certain restrictions in the Non-Compete Clarification Amendment Act of 2022. This act applies to any non-compete agreements entered into on or after October 1, 2022. It replaces a nearly complete ban on non-compete agreements previously enacted. Any new non-compete agreements executed in the District of Columbia must comply with the act.
Reasonable Uses and Objections
- Enforceable when terminated without cause? – Not Decided.
- Employee non-solicitation agreement permitted? – Yes.
- Customer non-solicitation agreements permitted? – Yes.
- Does continuing employment equal sufficient consideration? -Yes.
Legally Enforceable in Washington DC?
Non-compete agreements executed and in compliance with the terms of the 2022 Act can be enforced as per DC Act 24-552. With a few exceptions, non-compete agreements can only be required from “highly compensated” employees making over $150,000 annually. In addition, the employee must either spend more than 50% of his work time in Washington DC or be expected to pay more than 50% if employment hasn’t yet commenced.
Even employees covered by the act have protection under its terms. There are strict time limits for the duration of any non-compete agreement.
An employer must also give an employee 14 days’ notice before requiring the signature of any non-compete agreement or 14 days before a non-compete agreement will be required if the employee hasn’t begun work.
What’s Protected?
In Washington, DC, a non-compete agreement can be used to protect trade secrets, confidential knowledge gained during employment, and the fruits of employment.
In the District of Columbia, broadcast employees cannot be required to sign a non-compete agreement, regardless of their income or salary. “Broadcast employees” include an anchor or program host, disc jockey, editor, producer, reporter, or writer.
Time Limitations
Under previous laws in the District of Columbia, non-competition agreements could not be permanent but could only last for a reasonable period. New legislation, in effect from October 2022, provides that non-competition agreements cannot exceed one year in length or two for “medical specialists” defined in the act.
Geographical Limitations
In the District of Columbia, non-compete agreements must be geographically reasonable. Given the proximity of the District to Virginia and Maryland, it is unclear precisely what this means. One might specify the District and the adjoining counties in Maryland and northern Virginia in the agreement.
The geographical limits must be spelled out in the written agreement itself.
Sample
Below you can download a Washington DC Non-Compete Agreement in PDF or Word format:
