Washington, D.C.’s non-compete rules changed the local employment landscape in a major waybut the headline nctions began on October 1, 2022, not in an upcoming October. The effective date may be history, but compliance remains a current concern because employees relocate, hybrid schedules change, compensation thresholds rise, and outdated contract templates have a mysterious talent for returning from the dead.
The law is commonly called a non-compete ban. That description is broadly accurate, but it is not the whole story. D.C. generally prohibits non-compete agreements for covered employees below an annually adjusted compensation threshold. Limited agreements may still be used for qualifying highly compensated employees and medical specialists, provided employers follow strict rules governing notice, timing, duration, geographic reach, and functional scope.
When Did the Washington, D.C. Non-Compete Ban Begin?
The operative date was October 1, 2022. An earlier version, the Ban on Non-Compete Agreements Amendment Act of 2020, would have imposed substantially broader restrictions, including significant limits on policies governing outside employment.
After concerns were raised by employers and other stakeholders, the D.C. Council adopted the Non-Compete Clarification Amendment Act of 2022. The revised law narrowed the original approach, recognized limited exceptions, established a highly compensated employee category, and created detailed disclosure requirements.
Therefore, contracts being reviewed today should be evaluated by asking when the agreement was signed, where the employee performs work, how compensation is calculated, and whether the restriction complies with the rules that have applied since October 1, 2022.
What the D.C. Non-Compete Law Prohibits
An employer may not require or request that a covered employee sign an agreement or follow a workplace policy containing a prohibited non-compete provision. A violating provision entered into on or after October 1, 2022, is void and unenforceable under the statute.
The restriction covers more than the classic clause stating that an employee cannot join a named competitor after leaving. It can also reach workplace policies that prevent employees from performing paid work for another person or operating their own businesses.
That means a broad policy declaring, “Employees may never have another paid job,” may create problems even when the document never uses the words non-compete agreement. The law looks at what a policy does, not the clever label placed above it.
Which Employees Are Covered?
Geography is a central part of the coverage test. An employee will generally be covered when more than 50% of that employee’s working time for the employer is spent in the District.
Coverage may also apply when employment is based in D.C., the employee regularly performs a substantial amount of work there, and the employee does not spend more than half of working time in another jurisdiction. For prospective employees, employers must consider where the individual is reasonably expected to work.
This makes remote and hybrid arrangements especially important. A business headquartered in Maryland, Virginia, New York, or California may still be subject to the District’s rules when an employee performs most duties from a home office in D.C.
The statutory definition of employer excludes the D.C. government and the federal government. Other definitions address special situations involving partners, casual babysitters, broadcast employees, physicians, and prospective employees. Employers should review the actual statutory criteria rather than assuming that a job title answers every coverage question.
The Highly Compensated Employee Exception
The law permits an employer to propose a non-compete to certain highly compensated employees. However, crossing the compensation threshold is only the beginning of the analysisnot a permission slip for an unlimited restriction.
The original qualifying amounts were $150,000 for most employees and $250,000 for medical specialists. These thresholds are adjusted for inflation. As of January 1, 2026, the D.C. Department of Employment Services states that the prohibition applies to employees earning less than $162,164 and medical specialists earning less than $270,274.
Because the thresholds can change each year, employers should verify the current figures before proposing an agreement. Last year’s spreadsheet may be tidy, color-coded, and completely wrong.
Compensation can include salary, hourly wages, commissions, cash incentives, bonuses, overtime premiums, vested stock, and other monetary payments. Most noncash fringe benefits are excluded. An employer should calculate compensation using the statutory definition instead of looking only at the base salary printed in an offer letter.
Requirements for a Valid High-Earner Non-Compete
A permissible agreement must identify the functional scope of the restriction, including the services, roles, industries, or competing entities the employee may not work for. It must also specify the geographic limitations.
The post-employment restriction may last no longer than 365 calendar days for most qualifying highly compensated employees. For a qualifying medical specialist, the maximum period is 730 calendar days.
The proposed provision must be delivered in writing at least 14 days before the individual begins employment. If the person is already employed, it must be provided at least 14 days before the signing deadline. The employee must also receive a statutory notice explaining that D.C. law limits non-competes and that the employer has classified the worker as highly compensated.
An employer cannot simply point to a high salary and prohibit the employee from working anywhere, for anyone, in any capacity, until everyone involved has retired. Scope, geography, duration, notice, timing, and ordinary principles of enforceability still matter.
What Employers May Still Protect
The law does not prevent businesses from protecting legitimate confidential and proprietary information. Otherwise lawful agreements may restrict employees from disclosing, accessing, selling, or using protected information during or after employment.
Customer lists, trade secrets, internal pricing, software code, product strategies, business plans, and nonpublic client information may still receive appropriate protection. The law also recognizes exceptions involving the sale of a business and certain long-term incentive arrangements.
However, an agreement labeled “confidentiality” should not be drafted so broadly that it effectively prevents a worker from accepting another job. Courts and enforcement agencies may care more about the practical effect of a restriction than its heading.
When Anti-Moonlighting Policies May Be Lawful
Employers may restrict outside paid work when they reasonably believe it would cause the disclosure or use of confidential information, violate established conflict-of-interest rules, create a conflict of commitment at a higher education institution, or interfere with compliance obligations under laws, contracts, regulations, or grant agreements.
These are targeted exceptions. They do not automatically justify banning every side business, freelance project, weekend performance, tutoring job, or online craft store.
An employer relying on an allowable policy must provide employees with a written copy within 30 days after acceptance of employment and whenever the policy changes. Existing workers were also entitled to receive covered policy provisions within 30 days after the October 1, 2022, effective date.
How the Law Treats Older Agreements
The statutory prohibition focuses on agreements entered into on or after October 1, 2022. A non-compete signed earlier is not automatically erased solely because the law took effect. Nevertheless, an older provision may still be unenforceable under contract law, antitrust principles, public policy, or traditional rules requiring reasonable restrictions.
Amendments, renewals, promotions, new incentive plans, and revised employment terms may also raise questions about whether the parties entered into a new agreement after the effective date. Employers should review these situations before attempting enforcement.
Anti-Retaliation Protections and Penalties
Employers may not retaliate or threaten retaliation against covered employees for refusing prohibited agreements, questioning a provision’s validity, requesting a copy, consulting an attorney, contacting a government agency, or raising a reasonable compliance concern.
A worker may file an administrative complaint or pursue a civil action. The law authorizes administrative penalties and monetary relief for requesting unlawful provisions, attempting to enforce invalid clauses, violating disclosure requirements, or retaliating against employees.
Potential relief can increase for repeated violations. Consequently, an illegal clause is not merely harmless wording that can remain in a handbook until someone finds time to remove it. Requesting, enforcing, or defending the clause may create additional liability.
Real Enforcement Actions in Washington, D.C.
The District’s Office of the Attorney General has announced several settlements involving prohibited non-competes.
In one matter, a healthcare staffing company allegedly subjected District workers to unlawful restrictions and refused to release one employee even after the worker challenged the provision. According to the Attorney General, that employee remained unemployed for approximately 90 days. The settlement required compensation, penalties, policy changes, and notices explaining that the agreements would not be enforced.
In 2025, the Attorney General announced an agreement with Equinox after an investigation found that 112 District employees had been required to sign unlawful non-competes. The company agreed to pay affected workers and the District, stop using the provisions, and notify impacted current and former employees that the restrictions were void and unenforceable.
These cases demonstrate why national employers need local review. “We use the same agreement everywhere” is not a strong defense when every jurisdiction does not use the same law.
What Employers Should Do Now
Review Contracts and Workplace Policies
Audit offer letters, employment agreements, handbooks, equity documents, separation agreements, confidentiality provisions, moonlighting rules, and conflict-of-interest policies. Remove prohibited language from forms used for covered employees.
Track Where Employees Work
Identify employees working primarily from homes or coworking spaces inside the District, even when they report to an office elsewhere. Hybrid schedules can change whether an employee satisfies the geographic coverage test.
Check Compensation Thresholds Annually
Create a January compliance process for verifying the updated qualifying amounts. Calculate compensation using the monetary components recognized by the law rather than relying only on salary or job title.
Control Contract Templates
Centralize approved agreements, disable obsolete versions, and require legal or senior HR review before issuing a D.C. restrictive covenant. Otherwise, an outdated file named “Final_UseThisVersion_ReallyFinal.docx” may unexpectedly rejoin the workforce.
Review Before Attempting Enforcement
Before sending a demand letter, contacting a new employer, withholding compensation, or threatening litigation, confirm that the restriction is valid. Attempting to enforce an unlawful provision may create exposure beyond the original drafting mistake.
What Employees Should Examine Before Signing
Employees should read the complete agreement and handbook, not merely the paragraph labeled “Non-Competition.” Restrictions may appear under headings involving outside work, conflicts, clients, confidentiality, loyalty, business activities, or post-employment obligations.
Workers should consider where they will actually perform their duties, how the employer calculated compensation, when the agreement was provided, how long the restriction lasts, and whether the contract clearly describes its geographic and functional limits.
Copies of offers, policies, compensation documents, statutory notices, and signed agreements should be retained. Employees who believe a restriction violates D.C. law may raise the issue internally, consult qualified employment counsel, or contact the D.C. Department of Employment Services or the Office of the Attorney General.
How D.C. Fits Into the National Non-Compete Debate
The District’s rules operate independently of federal policy. The Federal Trade Commission adopted a nationwide non-compete rule in 2024, but a federal court stopped it from taking effect. The FTC later moved to dismiss its appeal, and the nationwide rule is not currently in effect or enforceable.
Employers must therefore continue navigating state and local laws. This is particularly important for teams containing employees in D.C., Maryland, Virginia, and other jurisdictions with different compensation thresholds, industry exceptions, notice requirements, and enforcement rules.
Practical Experiences Related to D.C. Non-Compete Compliance
The following examples are composites based on recurring compliance patterns and publicly reported enforcement lessons. They illustrate common experiences rather than describing any particular private employee or employer.
Experience One: The Forgotten Remote Employee
A company is headquartered outside D.C., and its human resources system assigns an employee to that headquarters. In practice, the employee works four days each week from an apartment inside the District. A recruiter sends the organization’s standard non-compete without considering the employee’s physical working location.
The experience shows that an office assignment in a database may not resolve legal coverage. Employers need a reliable process for identifying where remote and hybrid employees actually perform their work. Remote-work approvals, payroll records, manager confirmations, and employee location data may be relevant, provided information is collected for legitimate business purposes.
Experience Two: The Salary That Was Not Quite High Enough
An employer sees an impressive six-figure salary and assumes the employee qualifies for a non-compete. A closer calculation shows that the salary falls below the current threshold. The anticipated bonus is discretionary, and some equity does not count in the way the recruiter expected.
The lesson is that job titles such as “director,” “vice president,” or “senior executive” do not replace the statutory compensation calculation. Titles look excellent on conference badges, but they are not mathematical formulas.
Experience Three: The Side-Hustle Policy With No Limits
A handbook prohibits employees from accepting any outside paid work without management approval. It applies equally to direct competitors, weekend tutoring, handmade jewelry sales, music performances, and dog walking.
Management’s true concerns are confidential information, scheduling problems, and conflicts of interest. A better policy addresses those specific risks rather than prohibiting every activity involving payment. The revised rule should clearly describe when restrictions apply, be distributed on time, and be supported by manager training.
Experience Four: The Contract Template That Returned
Employment counsel updates the company’s D.C. agreement, but a recruiter has saved an old version on a laptop. Months later, the obsolete non-compete is attached to a new offer.
No executive ordered anyone to violate the law. The document simply escaped from the template graveyard. The experience demonstrates that legal compliance depends on operations: centralized forms, version controls, automated location questions, approval workflows, and training for everyone authorized to issue employment terms.
Experience Five: The Demand Letter That Increased the Risk
A former employee joins a competitor, and the employer immediately sends an aggressive enforcement letter. The employee responds that the agreement was signed after October 1, 2022, compensation was below the threshold, and no required notice was provided. The employer then threatens to contact the new company.
The dispute may now involve more than whether the original clause is enforceable. Attempted enforcement and retaliation allegations can create additional risk. Employers should conduct a careful review before sending threats, interfering with new employment, or withholding money.
These experiences show that D.C. compliance is not achieved by memorizing one sentence from the statute. Effective programs connect work location, compensation, contract language, disclosure timing, document control, manager training, and pre-enforcement review. That may sound less dramatic than courtroom litigation, but boring compliance is usually much cheaper.
Conclusion
The Washington, D.C. non-compete ban began on October 1, 2022, and continues to affect hiring, employee mobility, remote work, side jobs, and restrictive-covenant enforcement. Most covered employees below the annually adjusted compensation threshold cannot be required to accept a non-compete.
Qualifying highly compensated employees and medical specialists may receive limited agreements only when employers satisfy the applicable compensation, duration, scope, notice, and timing requirements. Employers should update thresholds annually, review employee locations, narrow outside-work policies, retire old templates, and verify restrictions before attempting enforcement.
Employees should examine where they work, what they earn, when they received the agreement, and what the provision actually prevents them from doing. In D.C., non-competes are no longer clauses that should be inserted on autopilot. Autopilot works nicely at cruising altitude; it is less useful when a contract is approaching a regulatory mountain.
Research synthesis: D.C. Law Library, D.C. Department of Employment Services, D.C. Office of the Attorney General, Federal Trade Commission, Littler, SHRM, Ogletree Deakins, Williams Mullen, Nelson Mullins, Jackson Lewis, Epstein Becker Green, and Tenenbaum Law Group. Primary legal authorities and requirements: nt thresholds and enforcement examples: al status and employment-law analysis: aria-label=”SEO metadata”>
