DC’s New Non-Competition Law May Be Postponed Until 2022 | Proskauer – Collective and collective actions
Like us Previously reported, DC Mayor Muriel Bowser signed the Non-Competition Agreements Prohibition Act (the “Act”) of 2020 on January 11, 2021. The Act is one of the most restrictive (if not the most restrictive) the non-competition laws in the country. Not only does the law prohibit nearly all post-employment non-compete agreements for DC employees, it also prohibits any policies or agreements that prohibit DC employees from simultaneously working for other employers. Employers have struggled not only with how to handle the simultaneous employment ban, but also what should be a simple question: when will the law come into full force? The law unnecessarily ties its critical “effective date” to the date its tax effect is included in an approved tax plan and budget, leaving employers to scrutinize DC’s budget developments to be sure they know when the law is in full. in force.
Responding to criticism from a number of DC organizations, Board Member Elissa Silverman proposed the Non-Competition Conflict of Interest Clarification Act of 2021 (the “Bill”) on May 21, 2021. The bill, on which we have already reported here, would amend the prohibition in the Concurrent Employment Restrictions Act by allowing certain “good faith conflict of interest” policies. Council member Silverman held a public hearing to discuss the bill on July 14, 2021, which Proskauer attended, in which witnesses from various industries expressed concern about the far-reaching implications of the law, even with the amendments proposed by the bill.
Opening remarks by board member Silverman, in which she explained that the law has a fiscal impact and that she had identified the funding of the law in the Budget for fiscal year 2022 to meet these costs. However, she also indicated that she recommended that the Act’s implementation date be postponed to April 1, 2022. The postponement is designed to give her committee sufficient time to review and make changes to the Act in response. concerns raised by the business community prior to its implementation.
While employers at DC should continue to plan for the implementation of the Act, they may have more time to enter into reasonable non-competition with their employees and the Act may be revised to add provisions favorable to employers. We will continue to monitor and report on important developments regarding the Act, including if its application date is formally postponed.