Non-Compete Agreements and Washington, D.C. Employment Law

Residents of Washington, D.C. do not get to elect their own senators, and there is not even a star representing the District of Columbia on the American flag, but people who work in D.C. do enjoy robust worker protection, compared to people employed in most of the 50 states. For example, the minimum wage for non-tipped employees in the District of Columbia is $15.20, and for tipped employees, it is $5.05; in other words, people who work in D.C. get paid more than workers almost anywhere else in the United States. One of the ways that the laws of the District of Columbia are able to protect workers from exploitation by employers is through severely restricting the use of non-compete clauses in employment agreements. Although the current laws make it almost impossible for employers to require employees to sign non-compete agreements, such agreements may still be valid and enforceable if they were signed before the current law went into effect. If you have questions about a non-compete agreement you signed years ago or one that your employer has recently asked you to sign, contact the Washington, D.C. employment lawyers at HKM Employment Lawyers LLP.

What is a Non-Compete Clause?

In the context of employment law, a non-compete agreement can be a free-standing document, or it can be an article, provision, or clause of an employment contract. In a non-compete agreement, the employee promises not to use the proprietary information they learned while working for the employer in ways that directly compete with the employer. This could mean not taking the old employer’s client lists with you to your next job or not contacting your old employer’s clients after you set up a new business. It might also mean not sharing proprietary information that cannot be protected by patents, copyrights, or trademarks (such as ways of doing business) with anyone at your next job. Some non-compete clauses go even farther than that, though; in the most extreme cases, an emergency room nurse at a hospital might sign an employment contract with a non-compete clause that requires her not to work as an emergency room nurse at any hospital in the District of Columbia for two years after she stops working for her current employer. At its worst, “non-compete” is a euphemism for “you’ll never work in this town again.”

It is easy to see how non-compete clauses can be unfair. They restrict workers’ opportunities to seek new employment opportunities, thus restricting fair market competition. The worst is when the employer tries to claim ownership of all the skills the employee has learned on the job. If you have had more than one job in your life, then you have applied skills from your previous jobs at your current job. It is unfair and impractical for employers to ask you to turn in all the skills you have learned on the job when you turn in your work badge.

The Washington, D.C. Ban on Non-Compete Agreements Amendment Act of 2020

The District of Columbia, California, North Dakota, and Oklahoma are the only jurisdictions in the United States that almost entirely ban non-compete provisions in employment contracts. In the District of Columbia, the Ban on Non-Compete Agreements Amendment Act of 2020 went into effect on March 16, 2021 after Mayor Muriel Bowser signed it into law on January 11. These are some key provisions of the law:

• Employers cannot prohibit employees from applying for or working at any other job during or after their term of employment with the employer (in other words, employers cannot forbid “moonlighting”)
• Employers cannot retaliate against employees who complain about the company’s non-compete policies or refuse to agree to them
• Employers must provide written notices about the anti-non-compete law to their employees
• Employees have the right to seek remedies from their employers, whether through administrative actions or in court, for violating this law
• Employers who violate this law must pay a fine of up to $2,500 for a first violation and $3,000 for subsequent violations

The ban applies to almost all employment relationships in the District of Columbia. The only exceptions are volunteer workers at charitable or nonprofit organizations, laypeople appointed or elected to office within religious organizations, and household babysitters. It only applies to employment relationships, not to buyer-seller relationships.

The 2021 Executive Order Restricting the Use of Non-Compete Agreements

An executive order issued in 2021 by President Biden gives support to D.C.’s ban on non-compete agreements. The executive order attempts to remedy the widespread problem of employers adopting restrictive non-compete policies and requiring employees to sign non-compete agreements for jobs that clearly do not necessitate them. Approximately one out of every five employees nationwide is subject to a non-compete agreement or a company policy that forbids moonlighting. This includes millions of workers who do not have bachelor’s degrees and would be unlikely to be party to information at their jobs that is not widely known to members of their profession who work for other employers. The executive order authorizes the Federal Trade Commission to impose financial penalties on companies that restrict their employees’ earning potential through restrictive non-compete agreements. The executive order does, however, permit employers to require employees to keep client lists confidential.

Do You Need a Washington, D.C. Non-Compete Lawyer?

Washington, D.C. law makes it almost impossible for employers to write non-compete provisions into new employment contracts. If you signed a non-compete agreement prior to this year, however, you may still be legally bound to its terms. The Washington, D.C. non-compete agreement lawyers at HKM Employment Attorneys LLP can help you get out of an unfair non-compete agreement.

Contact a Washington, D.C. Employment Lawyer About Non-Compete Agreements

Washington, D.C. is on its way to making non-compete agreements for employees a thing of the past. An employment contract lawyer can help you protect yourself from your employer’s efforts to restrict your opportunities for future employment. Contact the employment lawyers at HKM Employment Attorneys LLP in Washington, D.C. to set up a consultation.