Washington D.C. has recently joined the growing list of states and cities that have implemented a ban on non-compete agreements. The new law, which was signed by Mayor Muriel Bowser in January 2021, aims to protect workers` rights and increase job mobility in the district.
Non-compete agreements, also known as restrictive covenants, are contracts that prevent employees from working for competitors or starting their own competing business for a certain period of time after leaving their current employer. These agreements are common in industries such as technology, finance, and healthcare, where companies want to protect their intellectual property and confidential information.
However, non-compete agreements have also been criticized for being overly restrictive and limiting workers` career opportunities. The ban in D.C. aims to address these concerns by prohibiting employers from requiring or enforcing non-compete agreements for employees who earn less than $87,654 per year (or $41.98 per hour) and banning such agreements for most employees in the District beginning on March 16, 2022.
The new law also includes several exceptions, including agreements related to the sale of a business, the dissolution of a partnership, or the termination of an executive or officer. Additionally, non-solicitation agreements, which prevent employees from poaching their former employer`s clients or employees, are still allowed under the new law.
Employers who violate the ban on non-compete agreements could face penalties of up to $1,000 for each violation, as well as legal action from affected employees.
The D.C. ban on non-compete agreements is part of a wider trend across the United States, as more and more states and cities have passed similar laws in recent years. This includes California, which has long had a ban on non-compete agreements, as well as New York, Virginia, and Maryland, which have all implemented new restrictions on such agreements in the past year.
For workers in D.C. and across the country, the growing movement against non-compete agreements is a positive development that can help increase job mobility and promote fair competition in the labor market. With the D.C. ban set to take effect in March 2022, workers in the district can look forward to increased freedom and flexibility in their careers.