Based on current budget timelines, it is anticipated that the applicability date will be October 1, 2021, when the next fiscal year begins.
In our Alert published January 22, 2021, entitled "Washington, D.C. Employers Prepare for Broad Ban on Noncompetes and Related Workplace Policies," we detailed the various provisions of the broad, new Ban on Non-Compete Agreements Amendment Act of 2020 and explained that the law would take effect after a 30-day congressional review period, approval and publication in the District of Columbia Register. It is important to clarify, however, that approval requires that the District of Columbia Council fund the law through the appropriations process. Therefore, the law will not actually go into effect until its inclusion in an approved budget and financial plan (the "effective date").
Based on current budget timelines, it is anticipated that the effective date will be October 1, 2021, when the next fiscal year begins. In order to take effect prior to that date, the District of Columbia Council would need to amend or pass special funding for the law. It is possible that the law could go unfunded, and thus not go into effect at all. We will continue to monitor this legislation for any updates.
What This Means for Employers
Given the continuing uncertainty surrounding the effective date of the law, District of Columbia employers should review with legal counsel their standard offer letters, application forms, employment agreements, employee handbooks and other workplace policies to prepare for compliance with the law. Employers should also be on the lookout for additional guidance from the mayor's office, which will hopefully provide practical advice regarding implementation of the law's provisions and wide-sweeping prohibitions.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.