Well, technically, it is stopping.
As you will recall, Washington, D.C. was poised to implement a brand new noncompete law starting April 1, 2022.
In January 2021, Washington, D.C. passed a near ban on noncompetes, which became law in March 2021, after following D.C.’s Home Rule process. However, it required funding before it would become effective. At the moment, the bill is scheduled to become effective on April 1, 2022.
If the law were to go into effect in its current form, it would essentially ban most noncompetes (with some very odd exceptions), ban anti-moonlighting provisions, establish certain notice requirements, and impose penalties for noncompliance.
The bill has been the subject of substantial criticism, and, not surprisingly, almost immediately, was also the subject of proposed amendment.
So, what’s new?
Well, with only one month left and no agreed-upon fix, the D.C. Council needed more time to fix the law. Accordingly, the Council is on the cusp of postponing the law’s effective date until October 1, 2022.
Specifically, on March 1, the Council cast a series of three votes, passing one resolution and two bills:
- First, the Council adopted the Ban on Non-Compete Agreements Applicability Emergency Declaration Resolution of 2022, which declared the need for emergency action.
- Second, the Council voted to pass the Ban on Non-Compete Agreements Applicability Temporary Amendment Act of 2022, which will temporarily amend the April 1, 2022 effective date of the new noncompete law to October 1, 2022. However, peculiarities in D.C.’s legislative process permit the amendment to last for only 30 days from approval by the mayor (or if vetoed, from an override of the veto).
- Third, the Council voted to pass the Ban on Non-Compete Agreements Applicability Emergency Amendment Act of 2022, which will effectively make the 30-day amendment permanent. This bill requires time to work through the legislative process, as the Home Rule Act requires Congressional review.
Collectively, these votes, once final, will change the effective date of the noncompete law, allowing time for a full discussion of potential amendments.
While the mayor still needs to approve or veto the bills, given that the votes were essentially unanimous (12 yeas and one recusal), it’s unlikely that the bills will fail.
Stay tuned — we’ll keep you posted.