DC Non-Compete Ban – Enforcement Delayed

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In 2020, the Washington, D.C. City Council recommended, and Congress passed, the Ban on Non-Compete Agreements Amendment Act of 2020 (the “Non-Compete Act”). The full text of the law is here.

But in June of 2021, the entry into force of the legislation was postponed until April 2022. This happened via a unique process in DC through which a different piece of legislation, the Fiscal Year 2022 Budget Support Act of 2021, was enacted, which law had a provision delaying the effective date of the Non-Compete Act until April 2022. (Following a recommendation from the Council’s Committee on Labor and Workforce Development, which covers public and private sector employment issues; recommendation here.)

The new law has gotten a fair bit of press because it’s thought to be one of the most comprehensive bans in the country. It’s also gotten some attention from legislators in the sense of introduced amendments responding to critique that the ______ inadequately protects valuable proprietary information. Councilmember Elissa Silverman’s proposal, for example, creates an exception from the ban for “bona fide conflict of interest provision[s],” defined as follows:

an otherwise lawful written provision or workplace policy that bars an employee from accepting money or a thing of value from a person during the employee’s employment with the employer because the employer reasonably believes the employee’s acceptance of money or a thing of value from the person will cause the employer to: (A) Conduct its business in an unethical manner; or (B) Violate applicable local, state, or federal laws or rules.”

A few outstanding issues–stay tuned!:

  1. Will the law actually come into force and be effective?
  2. Will it be amended before then, either via Councilmember Elissa Silverman’s amendment (B24-0256 – Non-Compete Conflict of Interest Clarification Amendment Act of 2021), or some other change?
  3. What will enforcement look like?

Related press/coverage:

  1. https://code.dccouncil.us/us/dc/council/laws/23-209 (Full text as passed)
  2. https://www.natlawreview.com/article/dc-ban-non-competes-postponed-to-april-1-2022#:~:text=As%20we%20previously%20reported%2C%20earlier,compete%20ban%20in%20the%20country. (postponement)
  3. https://d3n8a8pro7vhmx.cloudfront.net/silverman/pages/1545/attachments/original/1625753125/LWD_FY2022_Budget_report_FILED_07-07-21_%281%29.pdf?1625753125 (Elissa Silverman)
  4. https://lims.dccouncil.us/Legislation/B24-0256 (Council page on amendment)
  5. https://lims.dccouncil.us/downloads/LIMS/47234/Memo/B24-0256_Memorandum.pdf (Memorandum on same)
  6. https://www.billtrack50.com/billdetail/1376416#:~:text=As%20introduced%2C%20Bill%2024%2D256,information%20during%20or%20after%20employment

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