Washington DC passed a law in 2022 that severely limits and employer’s ability to impose noncompete policies and clauses on District employees.
Employees in the area should review their employment contracts to check for any violations concerning their rights under the new law.
The impact of the new law
Under the new law, employers face restrictions on noncompetes for medical specialists earning less than $250,000 a year and most District employees making less than $150,000 a year. Workers who earn over those thresholds also receive protections, any noncompete imposed is subject to limitations and advance employee notification.
The reason for the ban
The District put a ban on noncompetes due to the harm they bring to workers. Limiting an individual’s employment option depresses worker wages and impairs upwards mobility for the worker. Noncompetes negatively impact recruiting efforts, entrepreneurship or the ability to work multiple jobs to afford a better lifestyle. Noncompetes stifle business competition, significantly impacting the market and overall economy.
The types of noncompetes
The way a noncompete reads will vary by company and industry. Some examples of a noncompete include:
- A fast food restaurant keeps an employee from working for a competitor either during or after their time with the company
- A gym prohibits its trainers or staff from opening their own fitness company or working as personal trainers on their own time
- A medical facility restricts the ability of doctors or nurses to find local employment for two years after they leave the facility
Any restriction placed on future employment could fall under a noncompete clause.
Noncompete provisions are usually found in an employment contract. Ask for a copy of your contract to determine if a violation is taking place.