Mid-Atlantic Health Law TOPICS
Amendment to D.C. Ban on Non-Competes
Effective October 1st, 2022, the District of Columbia began implementing a new non-compete law that prohibits the use of non-compete clauses in newly signed employment agreements for many employees. An amendment passed over the summer provided additional nuances to the ban.
$150,000 Threshold
Pursuant to the amendment, the ban now only applies to District of Columbia non-physician employees earning $150,000 or less annually. Non-physician employees earning more than $150,000 may still be subject to new non-compete provisions.
Special Rules for Physicians
The situation for physicians is different. First, no new non-competes are permitted for District of Columbia physicians making $250,000 per year or less.
Second, new non-compete provisions for District of Columbia physicians making $250,000 or more per year are permitted, but the prohibition on competition cannot exceed 730 calendar days (2 years) from the date of the physician’s separation from his or her employer.
Sales of Businesses
New non-compete provisions are still permitted in certain contexts, such as prohibiting a seller of a business from competing against the buyer after the completion of the sale or when offering an employee long-term incentives, such as bonuses, equity compensation, stock options, and other performance driven incentives that are typically earned over a period longer than a year.
Moonlighting
Further, this summer’s amendment has resolved some of the concerns that had been raised about the original law’s prohibition on anti-moonlighting clauses.
Now, employers can only prohibit moonlighting if the employer reasonably believes the moonlighting work would “result in the employee’s disclosure or use of confidential employer information or proprietary employer information, conflict with employer’s, industry’s, or profession’s established conflict of issue rules, create a conflict of commitment if the employee is employed by a higher education institution; or impair the employer’s ability to comply with a law, regulation, contract or grant agreement.”
Alexandria K. Montanio
410-576-4278 • amontanio@gfrlaw.com