D.C.’s Proposed Noncompete Ban Not To Take Effect Until Next Year — And May Be Amended

As you may remember, earlier this year, Washington, D.C. passed the “Ban on Non-Compete Agreements Amendment Act of 2019” that will ban most noncompetes in the District. As noted before, however you come out on the concept of a ban, the bill has some problems, including, in particular, that it ties companies’ hands to prevent conflicts of interest.

Given its problems, there is already a pending proposed amendment (B24-256, the Non-Compete Conflict of Interest Clarification Amendment Act of 2021) that was introduced on May 21, 2021. The amendment would effectively allow fiduciary duty and conflict of interest laws to apply by eliminating the ban on anti-moonlighting provisions and other restrictions where there is a “bona fide conflict of interest.”

Last week (on July 14, 2021), the D.C. Council held two proceedings related (at least in part) to the law: a general budget meeting and a hearing on a proposed amendment.

During both, at-Large Councilmember Elisa Silverman recommended that the Council push back the implementation date of the new law to April 1, 2022.

In addition, during the hearing, the Council took testimony about the proposed amendment from a variety of sources. As you might imagine, the testimony was all over the map: some objective, verifiable input and some partisan rhetoric; some spot on and some inaccurate. How the Council will sort through all of the testimony and separate the wheat from the chaff is yet to be seen.

We’ll keep you posted.


*Thank you to Erika Hahn for tracking the bill. Photo credit: David Mark.