Worker Alert: Noncompete Provisions Are Now Illegal for Many DC Workers
As of October 1, 2022, a new District law makes it illegal for employers to impose noncompete clauses and policies (noncompetes) on many District employees. The Office of Attorney General (OAG) encourages DC workers to review their employment contracts and contact our office if they believe an employer may be violating the new law.
What are noncompetes?
Noncompete provisions, often found in employment contracts, limit employees’ ability to work for competing businesses or in some cases start their own businesses. Here are some examples:
- A fast-food restaurant prohibiting its employees from working for any competing fast-food businesses during and after their employment
- A hospital prohibiting its nurses from working at any other hospital within a 10-mile radius for 2 years after employment
- A gym prohibiting its trainers from starting their own physical fitness business within 3 years of employment
What does the new DC law prohibit?
The new law prohibits employers from imposing noncompetes on most District employees who make under $150,000 per year, or medical specialists who make under $250,000 per year. For workers who make more than those income thresholds, noncompetes are allowed but only with limitations, and only if the worker is notified in advance.
For employees not covered by the new law, a noncompete provision may still be illegal and unenforceable under other District laws related to contracts and antitrust.
Why did DC ban noncompetes?
Noncompetes are harmful to workers because they limit worker mobility and depress worker wages—and studies show this holds across all industries and wage-levels. Noncompetes also make it harder to recruit workers, which can be harmful to businesses.
The District’s noncompete law ensures that workers have the freedom to look for new jobs, work multiple jobs, and start their own businesses, and it ensures that businesses can freely compete with one another.
What is OAG doing to stop illegal noncompete clauses?
Our office is committed to enforcing the District’s restrictions on noncompete clauses in order to protect workers, businesses, and consumers. Our role includes investigating complaints brought by workers, filing lawsuits where appropriate, and educating the community about the law.
OAG recently settled an investigation into Aquila Fitness Consulting Systems, Ltd. for its wage and hour practices and its use of illegal noncompetes. As part of the settlement, the company agreed that it would immediately stop using noncompetes for workers who made under $150,000 and would notify employees that they are no longer bound by the noncompetes.
OAG also recently sent a letter to the D.C. Bar Legal Ethics Committee, requesting an opinion on whether it is a violation of any of the D.C. Bar Rules of Professional Conduct for attorneys to participate in drafting or executing illegal or unenforceable contracts like noncompetes.
What should workers do if they believe they have been asked to sign or adhere to illegal noncompete clauses?
If you believe you have been asked to sign or adhere to an illegal noncompete, please contact OAG by calling (202) 442-9828 or emailing firstname.lastname@example.org or email@example.com.