A closer look at DC’s new ban on non-compete agreements

A closer look at DC’s new ban on non-compete agreements

On Behalf of | Apr 19, 2021 | Employment Law |

There are many great places to work in Washington, D.C. With that said, many people working in this city have their options limited by non-compete agreements. However, a recent ruling now makes these agreements things of the past for many people.

What’s a non-compete agreement?

A non-compete agreement or clause prohibits someone from working in a similar position for another company. It can also stop a company’s employees from going to work for one of its competitors. Non-compete agreements can even prohibit an employee from opening their own business.

Why is DC banning non-compete agreements?

The thought behind this recent ban states that non-compete agreements are damaging to both labor markets and workers for several reasons. For one, these agreements make it hard for companies to recruit the right people for open roles. Also, non-compete agreements contribute to reduced wages for employees across multiple industries.

Protections under this new ruling

The Ban on Non-Compete Agreements Amendment Act of 2020 prohibits an employer from making employees sign non-compete agreements. Under this ruling, no company can either prevent you from working elsewhere or starting your own company.

Also, an employer can no longer threaten or retaliate against an employee that declines to sign a non-compete agreement. If an employer doesn’t follow these new rules, you might want to contact an attorney as this could become a potential workplace law matter.

Going forward, there is a way for employers to protect their companies. An employer can still have employees sign agreements preventing them from disclosing trade secrets, client lists, and any confidential or otherwise sensitive information.

To summarize, companies operating in Washington D.C. must now follow new rules regarding non-compete agreements. This new ruling keeps the job market competitive and helps prevent low employee wages.