Employment Law Alert – April Fools … or Just in time for Halloween? DC’s End to Non-Compete Restrictions as We Know Them Deferred to October 2022
March 14, 2022
Just as we were about to send an Employment Law Alert to DC employers beginning the “count down” to the Ban on Non-Compete Agreements Amendment Act of 2020 (the “Ban on Non-Competes Act ”), which was to be effective as of April 1st of 2022 – after already being extended once from August of 2021 – DC is still not ready to move forward with this significant new employment law. In fact, thanks to an emergency bill recently passed by the DC Council and, then, expedited for prompt action by Mayor Bowser, the Ban on Non-Competes Act – for now – is an “April Fools” for DC employers rather than the feared sea change to DC laws governing employee mobility.
The key takeaway for DC employers is, for now …
The DC Council is not reversing course on its near-complete ban on non-compete restrictions on DC employees, only – once again – deferring its Ban on Non-Competes Act to a new October 1, 2022, effective date. In response to significant concerns raised by the DC business community, this will provide the DC Council will additional time to pursue these concerns and to consider what, if any, modifications may be warranted before DC employers face its inevitable consequences.
For a summary of the current version of the Ban on Non-Competes Act, see our original alert here. Importantly, DC was on the verge of joining California in a sweeping ban on non-compete restrictions, rather than following or even just expanding on the laws enacted in Maryland and, more recently, in Virginia, which both serve to reasonably limit rather than end the use of non-compete restrictions with employees. While these neighboring states focused on excluding employees from these restrictions based on their annual earnings, DC, with only a limited exception, is poised to terminate the use of these restrictions going forward in order to facilitate and promote greater employees mobility.
So now, a different countdown begins … and DC Employers are encouraged to use this additional six months to prepare for this change – by reviewing how they currently protect what they value and what options they have for this in the future. If we can help with that audit or the strategic planning this change may promote, please contact the Shulman Rogers attorney with whom you work or a Shulman Rogers Employment Lawyer to talk through these issues!