Last month, we provided an in-depth summary of Washington, D.C.’s anticipated overhaul (a wage threshold) to its 2021 overhaul (a near-complete ban) of its noncompete law. We then quickly followed up with a summary of a last-minute revision to keep broadcasters exempt from noncompetes, regardless of compensation levels.
This month, we are waiting on Congress. That wait will, it seems, create an interesting question about the operation of the new law.
According to the text of the act, the law “shall apply as of October 1, 2022.”
Note the word “apply.”
However, the act also provides, “This act shall take effect following approval by the Mayor . . . , a 30-day period of congressional review . . . and publication in the District of Columbia Register.”
Note the phrase “take effect.”
The Mayor approved the act on July 27, the act was published in the D.C. Register on August 5, and it was transmitted to Congress on August 9. According to the Home Rule Act, Congress has a “30-calendar-day period” to review the act.
Assuming Congress does not “disapprove” the act, you would think that the 30-calendar-day period (which started from August 9) would expire on September 8, and the law would take effect on the 31st day following transmission to Congress, i.e., September 9.
But, you would be wrong.
Only in Congress would a 30-calendar-day period “exclud[e] Saturdays, Sundays, and holidays, and any day on which neither House is in session because of an adjournment sine die, a recess of more than 3 days, or an adjournment of more than 3 days . . . .”
Good luck trying to calculate the date.
Fortunately, LegiScan has done that for us. The “Projected Law Date” is November 10, 2022.
So… assuming that’s correct, the law will presumably take effect on November 10, 2022. However, the law expressly provides that it will apply as of October 1, 2022.
Does that mean that the law will have retroactive effect (albeit just over a month of retroactivity)? We will see. If not, does it mean that the prior version of the law will be in effect between October 1, 2022 (as previously scheduled) and November 9, 2022? I doubt it. But, stay tuned for those fun and games.
In the meantime, here is the executive summary of the final law (subject to Congressional review):
The law will prohibit noncompetes for anyone other than physicians earning $250,000 or more, anyone else earning $150,000 or more, casual babysitters (you read that right), partners in a partnership, and government workers.
- Who’s covered: employees who primarily work in D.C. and earn under $150,000 (and physicians earning under $250,000). (The wage threshold holds increase each year — on January 1 — with the Consumer Price Index.) Broadcast employees are also exempt, regardless of how much they earn.
- What’s prohibited: noncompetes for employees under the wage threshold (and for broadcast employees) and retaliation against employees who object to or complain about noncompetes, or who discuss the law.
- What’s not prohibited: nondisclosure agreements, noncompetes in connection with the sale of a business, and (maybe) other restrictive covenants.
- What’s required: providing a copy of any workplace policies that include permitted restrictive covenants and a prescribed notice to persons receiving a noncompete. (The statute contemplates regulations that may require record-keeping to prove compliance.)
- The consequences of violation the law: potentially hefty fines.
For more details about the substance of the law, see A second paradigm shift in D.C.’s noncompete law — no longer a ban, now a wage threshold and Broadcasters will remain exempt from noncompetes in D.C.
If you are looking for a quick summary of the noncompete laws in all 50 states, our 50-state noncompete chart (created in 2010 and updated regularly since to keep track of the ever-changing noncompete laws) is always available here.