DC Noncompete Law

Are Noncompete Agreements Enforceable in Washington, DC?

For many DC employees, the answer is no. On October 1, 2022, DC enacted a law making it illegal for employers to impose noncompete policies or clauses (noncompetes) on District employees who make under $150,000 per year (or $250,000 a year for medical specialists). Noncompetes are still enforceable for employees with incomes above the threshold, but now have limitations and require employers to provide advance notice.

What is DC’s Noncompete Law?

DC’s noncompete law ensures that workers are free to find new jobs, hold multiple jobs, and/or start their own businesses, and that businesses are free to compete against each other. Noncompetes are illegal to impose on employees with an income of $150,000 a year (or $250,000 for medical specialists). Noncompete provisions, typically found in employment contracts, limit a person’s ability to work for, or start their own, competing business. Noncompetes hurt workers by inhibiting mobility and keeping
wages lower.

Can You Enforce a Noncompete in DC Against Lower-level Employees?

No. You cannot enforce a DC noncompete against a lower-level employee. If an employee’s income is lower than $150,000, any new noncompete agreement is unenforceable. Noncompetes harm workers by inhibiting employees’ mobility and keeping wages lower. They also can harm businesses by making it harder to recruit new workers.

Is DC’s noncompete Law Retroactive?

No, DC’s noncompete law is not retroactive. The new law does not affect noncompetes in effect prior to its enactment on October 1, 2022. There’s no need for employers to change any current noncompetes with covered employees. That said, employers should consult an employment lawyer prior to changing an existing agreement that includes a noncompete to see if the amendment will subject the agreement to the new law.

When Does DC’s Noncompete Law Go Into Effect?

On October 1, 2022, DC enacted a law making it illegal for employers to impose noncompetes on many District employees. Employees covered under this act include individuals who make under $150,000 (or $250,000 for medical specialists). The law is not retroactive, so noncompetes that predate October 1, 2022 are still enforceable.

Who Should I Contact If I Have Specific Questions About DC Noncompete Law?

Contact the Lipp Law Firm, PC if you need help with questions about Washington, DC noncompete law, or any DC employment laws. Our clients include both employers and employees, so an experienced attorney will be able to answer your questions. If you’re an employer looking for advice on enforceable noncompetes or an employee wondering how the new law impacts them, contact us today to learn more. Get in touch here.