Strict D.C. law banning noncompetes takes effect in March

District of Columbia Mayor Muriel Bowser recently signed into law one of the strictest bans on noncompete agreements in the United States. Under the "Ban on NonCompete Agreements Amendment Act of 2020," noncompetes entered into on or after the law's effective date will be considered void. The law also includes broad antiretaliation provisions and penalties for noncompliance and requires employers to provide employees with a specific written notice. After a 30-day legislative congressional review period, the law is expected to take effect on March 19, 2021.

Prohibitions

Under the new law, no employer may require or request an employee who performs work in D.C. (or a prospective employee who is reasonably expected to work there) to sign an agreement containing a noncompete provision. As mentioned, any noncompetes entered into after the effective date will be automatically void.

The law defines a noncompete provision as any part of a written agreement between an employer and an employee that prohibits the worker from being employed by another person, performing work or providing services for pay for another person, or operating the employee's own business. The definition includes noncompete provisions that restrict an employee's ability to (1) work after they leave their employer or (2) obtain other employment during their tenure with their current employer. In addition, the law would prohibit workplace policies that have the same effect.

Scope