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AN ACT
IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
______________________
To amend the Ban on Non-Compete Agreements Amendment Act of 2020 to clarify which
provisions in workplace policies or employment agreements will not violate the laws
restrictions on the use of non-compete provisions and agreements, clarify that employers
may bar an employees use, in addition to the disclosure, of confidential and proprietary
information during or after the employees employment for the employer, create a limited
exception allowing the use of non-compete provisions with highly-compensated
employees, including medical specialists, under specified circumstances, specify what
must be contained in a non-compete agreement for it to be valid and enforceable, clarify
remedies for violations of the act, clarify how the act relates to a collective bargaining
agreement, clarify how the law applies relative to other District laws, and to clarify
rulemaking requirements.
BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this
act may be cited as the Non-Compete Clarification Amendment Act of 2022.
Sec. 2. The Ban on Non-Compete Agreements Amendment Act of 2020, effective March
16, 2021 (D.C. Law 23-209; 68 DCR 782), is amended as follows:
(a) Title I (D.C. Official Code 32-581.01 et seq.), is amended to read as follows:
TITLE I. BAN ON NON-COMPETE AGREEMENTS
Sec. 101. Definitions.
For the purposes of this title, the term:
(1) An Act means An Act To provide for the payment and collection of wages
in the District of Columbia, approved August 3, 1956 (70 Stat. 976; D.C. Official Code 32-
1301 et seq.).
(2) Broadcast employee means an on- or off-air creator (such as an anchor,
disc jockey, editor, producer, program host, reporter, or writer) of a legal entity that owns or
operates one or more of the following:
(A) A television station or network;
(B) A radio station or network;
(C) A cable station or network;
(D) Satellite-based services similar to a broadcast station or network; or
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(E) Any other entity that provides broadcasting services such as news,
weather, traffic, sports, or entertainment programming.
(3) Compensation means all monetary remuneration an employer may pay or
promise an employee.
(A) The term includes:
(i) Hourly wages;
(ii) Salary;
(iii) Bonuses or cash incentives;
(iv) Commissions;
(v) Overtime premiums;
(vi) Vested stock, including restricted stock units; and
(vii) Other payments provided on a regular or irregular basis.
(B) The term does not include fringe benefits other than those paid to the
employee in cash or cash equivalents.
(4) Confidential employer information means information owned or possessed
by the employer that is not available to the general public and that the employer has taken
reasonable steps to ensure is protected from improper disclosure.
(5) Conflict of commitment means conduct that would compromise the ability
of an employee of a higher education institution to perform employment duties for the institution
because the activities risk interfering with the employees primary duties for the institution.
(6) Covered employee means an employee who is not a highly compensated
employee and:
(A) If the employee has commenced work for the employer:
(i) Spends more than 50% of his or her work time for the
employer working in the District; or
(ii) Whose employment for the employer is based in the District
and the employee regularly spends a substantial amount of his or her work time for the employer
in the District and not more than 50% of his or her work time for that employer in another
jurisdiction; or
(B) If not yet commenced work for the employer:
(i) Has an employer that reasonably anticipates that the employee
will spend more than 50% of his or her work time for the employer working in the District; or
(ii) Whose employment for the employer will be based in the
District and the employer reasonably anticipates that the employee will regularly spend a
substantial amount of his or her work time for the employer in the District and not more than
50% of his or her work time for that employer in another jurisdiction.
(7) Employee:
(A) Means:
(i) An individual who performs work for pay in the District on
behalf of an employer; or
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"(ii) An individual to whom the employer has made an offer of
employment and whom an employer reasonably anticipates will perform work for pay on behalf
of the employer in the District.
(B) The term does not mean:
(i) An individual employed as a casual babysitter in or about the
residence of the employer; or
(ii) A partner in a partnership.
(8) Employer means an individual, partnership, general contractor,
subcontractor, association, corporation, or business trust operating in the District, or any person
or group of persons acting directly or indirectly in the interest of an employer operating in the
District in relation to an employee, including a prospective employer. The term does not mean
the District government or the United States government
(9) Higher education institution means a postsecondary educational institution
accredited by an agency that the United States Department of Education recognizes as an
accrediting agency.
(10) Highly compensated employee means, other than a broadcast employee,
an employee:
(A) Who is reasonably expected to earn from the employer in a
consecutive 12-month period compensation greater than or equal to the minimum qualifying
annual compensation; or
(B) Whose compensation earned from the employer in the consecutive
12-month period preceding the date on which the proposed term of non-competition is to begin is
greater than or equal to the minimum qualifying annual compensation.
(11) Long-term incentive means bonuses, equity compensation, stock options,
restricted and unrestricted stock shares or units, performance stock shares or units, phantom stock
shares, stock appreciation rights, and other performance driven incentives for individual or corporate
achievements typically earned over more than one year.
(12) Medical specialist means a highly compensated employee who is engaged
primarily in the delivery of medical services and who:
(A) Holds a license to practice medicine;
(B) Is a physician;
(C) Has completed a medical residency; and
(D) Receives total compensation in the amount equal to or greater than
$ 250,000.
(13) Minimum qualifying annual compensation means:
(A) Beginning with the calendar year in which this title becomes
applicable:
(i) $150,000; or
(ii) $250,000, if the employee is a medical specialist.
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(B) For the calendar year beginning January 1, 2024, and each calendar
year thereafter, an amount equal to the previous calendar years minimum qualifying annual
compensation, increased in proportion to the annual average increase, if any, in the Consumer
Price Index for All Urban Consumers in the Washington Metropolitan Statistical Area published
by the Bureau of Labor Statistics of the United States Department of Labor for the previous
calendar year adjusted to the nearest whole dollar.
(14) Non-compete agreement means a contract between an employer and
employee that has one or more non-compete provisions.
(15) Non-compete provision means a provision in a written agreement or a
workplace policy that prohibits an employee from performing work for another for pay or from
operating the employees own business. The term non-compete provision does not include an
otherwise lawful provision:
(A) Contained within or executed contemporaneously with an agreement
between the seller of a business and one or more buyers of that business wherein the seller agrees
not to compete with the buyers business;
(B) That prohibits or restricts an employee from:
(i) Disclosing, using, selling, or accessing the employers
confidential employer information or proprietary employer information;
(ii) Accepting money or a thing of value for performing work for
a person other than the employer, during the employees employment with the employer,
because the employer reasonably believes the employees acceptance of money or a thing of
value under such circumstances will:
(I) Result in the employees disclosure or use of
confidential employer information or proprietary employer information;
(II) Conflict with the employers, industrys, or
professions established rules regarding conflicts of interest;
(III) Constitute a conflict of commitment if the employee
is employed by a higher education institution; or
(IV) Impair the employers ability to comply with District
or federal laws or regulations; a contract; or a grant agreement; or
(C) That provides a long-term incentive.
(16) Proprietary employer information means information unique to an
employer that is compiled, created, or solicited by the employer, including customer lists, client
lists, and trade secrets as that term is defined in section 2(4) of the Uniform Trade Secrets Act of
1988, effective March 16, 1989 (D.C. Law 7-216; D.C. Official Code 36-401(4)).
(17) Retaliate means to take an adverse action, including a threat, verbal
warning, written warning, reduction of work hours, suspension, or termination against one or
more employees.
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(18) Term of non-competition means the period of time specified in a non-
compete provision during which the employees work for a person other than the employer is
prohibited.
(19) Workplace policy means the rules and restrictions, whether written or as a
matter of practice, implemented by an employer to govern the conduct of the employers
employees.
Sec. 102. Prohibition on non-compete provisions for covered employees.
(a)(1) Beginning October 1, 2022, no employer may require or request that a covered
employee sign an agreement or comply with a workplace policy that includes a non-compete
provision.
(2) A non-compete provision that violates paragraph (1) of this subsection
contained in an agreement between a covered employee and an employer that was entered into
on or after October 1, 2022, shall be void as a matter of law and unenforceable.
(b) No employer may retaliate or threaten to retaliate against a covered employee for:
(1) The covered employees refusal to agree to a non-compete provision or non-
compete agreement that is prohibited under subsection (a) of this section;
(2) The covered employee's alleged failure to comply with a non-compete
provision or non-compete agreement that is prohibited under subsection (a) of this section;
(3) Asking, informing, or complaining about the existence, applicability, or
validity of a provision in a workplace policy or employment agreement that the employee
reasonably believes is prohibited under subsection (a) of this section or making a request for a
copy of such a provision to:
(A) An employer, including the covered employees employer;
(B) A coworker;
(C) The covered employees lawyer or agent; or
(D) A governmental entity; or
(4) Asking the employer for the information required to be provided to the
employee pursuant to section 103a.
Sec. 103. Limitations on non-compete provisions for highly compensated employees.
(a) For a non-compete agreement between an employer and a highly compensated
employee executed on or after October 1, 2022, to be valid and enforceable:
(1) The agreement must specify:
(A) The functional scope of the competitive restriction, including what
services, roles, industry, or competing entities the employee is restricted from performing work
in or on behalf of;
(B) The geographical limitations of the work restriction; and
(C)(i) If the employee is not a medical specialist, a term of non-
competition that does not exceed 365 calendar days from the date the employee separates from
employment with the employer; or
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(ii) If the employee is a medical specialist, a term of non-
competition that does not exceed 730 calendar days from the date the employee separates from
employment with the employer; and
(2) The employer shall provide the non-compete provision to the employee in
writing:
(A) At least 14 days before the individual commences employment for
the employer; or
(B) If the employer already employs the highly compensated employee,
at least 14 days before the employee must execute the agreement.
(b)(1) No employer may retaliate or threaten to retaliate against a highly compensated
employee who has executed a non-compete agreement with the employer for asking for a copy
of a proposed non-compete provision or non-compete agreement or for a copy of a non-compete
provision or non-compete agreement that the employee executed;
(2) No employer may retaliate or threaten to retaliate against a highly
compensated employee for:
(A) Asking the employer for the information required to be provided to
the employee pursuant to section 103a; or
(B) Asking about or objecting to a proposed non-compete provision or
agreement because the employee reasonably believes that the provision or agreement does not
conform to the requirements of subsection (a)(1) of this section or reasonably believes that the
employer has failed to comply with the requirements of subsection (a)(2) of this section to:
(i) An employer, including the highly compensated employees
employer;
(ii) A coworker;
(iii) The highly compensated employees lawyer or agent; or
(iv) A governmental entity.
Section 103a. Disclosures to employees.
(a) An employer with a workplace policy that includes one or more of the exceptions to
the definition of non-compete provision, as detailed in section 101(15), shall provide a written
copy of the provisions to an employee:
(1) Within 30 days after the employees acceptance of employment with the
employer;
(2) Within 30 days after October 1, 2022; and
(3) Any time such policy changes.
(b) A highly compensated employees employer shall provide the following notice to the
employee whenever a non-compete provision is proposed to the employee:
The Districts Ban on Non-Compete Agreements Amendment Act of 2020
limits the use of non-compete agreements. It allows employers to request non-compete
agreements from highly compensated employees, as that term is defined in the Ban on Non-
Compete Agreements Amendment Act of 2020, under certain conditions. [Name of employer]
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has determined that you are a highly compensated employee. For more information about the
Ban on Non-Compete Agreements Amendment Act of 2020, contact the District of Columbia
Department of Employment Services (DOES)..
Sec. 104. Relief and penalties.
(a)(1) The Mayor and Attorney General shall administer and enforce this title consistent
with their respective powers and rights under section 6(a), (a-1), (b), and (c) of An Act.
(2)(A) Any records an employer maintains pursuant to the requirements of
regulations issued to implement this title shall be open and made available for inspection or
transcription by the Mayor, the Mayors authorized representative, or the Office of the Attorney
General upon demand at any reasonable time. An employer shall furnish to the Mayor, the
Mayor's authorized representative, or the Office of the Attorney General on demand a sworn
statement of records and information on forms prescribed or approved by the Mayor or Attorney
General.
(B) No employer may be found to be in violation of subparagraph (A) of
this paragraph unless the employer had an opportunity to challenge the Mayor or Attorney
General's demand before a judge, including an administrative law judge.
(b)(1) The Mayor may assess an administrative penalty of no less than $350 and no
more than $1,000 for each violation of this title; except, that the penalty for each violation of
section 102(b) and 103(b) assessed against an employer shall be for not less than $1,000.
(2) The Mayor may not collect an administrative penalty under this subsection
unless the Mayor has provided the employer alleged to have violated this title notification of the
violation, notification of the amount of the administrative penalty to be imposed, and an
opportunity to request a formal hearing held pursuant to the Administrative Procedure Act,
approved October 21, 1968 (82 Stat. 1204; D.C. Official Code 2-501 et seq.), and section 8a(e)
of An Act.
(c)(1) A person aggrieved by a violation of this title may pursue relief by filing:
(A) An administrative complaint with the Mayor setting forth facts
minimally sufficient to allege a violation of this title; or
(B) A civil action in a court of competent jurisdiction. In such action, the
plaintiff shall carry the burden