District of Columbia Non-Compete Agreement for Highly Compensated Employees

NON-COMPETE AGREEMENT FOR HIGHLY COMPENSATED EMPLOYEES

District of Columbia

CRITICAL COMPLIANCE WARNING: The District of Columbia enacted the Ban on Non-Compete Agreements Amendment Act of 2020 (D.C. Law 23-209), as amended by the Non-Compete Clarification Amendment Act of 2022 (D.C. Law 24-175), effective October 1, 2022. Non-compete provisions are PROHIBITED AND VOID for employees earning $162,164 or less per year ($270,274 or less for medical specialists) (2026 CPI-adjusted thresholds; updated annually). This template may only be used for "highly compensated employees" who meet the statutory salary threshold and all other requirements.

TABLE OF CONTENTS

1. D.C. Non-Compete Ban Compliance Checklist
2. Parties and Recitals
3. Definitions
4. Statutory Disclosure and Notice
5. Consideration
6. Confidentiality Obligations
7. Non-Competition Covenant
8. Non-Solicitation of Customers
9. Non-Solicitation of Employees
10. Intellectual Property Assignment
11. Return of Property
12. Remedies for Breach
13. Indemnification
14. Dispute Resolution
15. General Provisions
16. Acknowledgments
17. Execution
18. Exhibit A – Statutory Disclosure Notice
19. Sources and References

1. D.C. NON-COMPETE BAN COMPLIANCE CHECKLIST

Employer must complete this checklist BEFORE presenting this Agreement to Employee.

Threshold Determination

Timing Requirements

Additional Requirements

☐ Statutory disclosure notice (Exhibit A) is attached to and provided with this Agreement.
☐ Agreement specifies functional scope of competitive restriction.
☐ Agreement specifies geographic limitation.
☐ Non-compete term does not exceed 365 calendar days (or 730 for medical specialists).
☐ Company has posted required workplace notice per D.C. Code § 32-581.05.

IF ANY BOX ABOVE IS MARKED "NO" OR A THRESHOLD IS NOT MET, DO NOT PROCEED WITH THIS AGREEMENT.

2. PARTIES AND RECITALS

This Non-Compete Agreement (this "Agreement") is entered into as of [__/__/____] (the "Effective Date") by and between:

EMPLOYER:
| Field | Details |
|-------|---------|
| Legal Name | [________________________________] |
| Entity Type | [________________________________] |
| Principal Address | [________________________________] |
| ("Employer") | |

EMPLOYEE:
| Field | Details |
|-------|---------|
| Full Legal Name | [________________________________] |
| Address | [________________________________] |
| Position/Title | [________________________________] |
| Annual Compensation | $[________________________________] |
| ("Employee") | |

Recitals

A. Employer is engaged in the business of [________________________________] (the "Business") and operates within the District of Columbia.

B. Employee is a "highly compensated employee" as defined by D.C. Code § 32-581.01(1A), earning total annual compensation in excess of $162,164 (or $270,274 if a medical specialist) (2026 CPI-adjusted thresholds; these amounts are adjusted annually).

C. Employee's position provides access to Employer's Confidential Information, trade secrets, and customer goodwill, and post-employment competition within certain limits would materially and adversely affect Employer.

D. This Agreement has been provided to Employee at least 14 calendar days before the earlier of: (i) Employee's commencement of employment; or (ii) the date Employee is required to execute this Agreement, as required by D.C. Code § 32-581.03(a)(3).

E. In consideration of the mutual promises herein and other good and valuable consideration, the parties agree as follows.

3. DEFINITIONS

"Competitive Services" means activities that are the same as or materially similar to the services Employee performed for Employer during the [____] months preceding the Termination Date, specifically including: [________________________________].

"Confidential Information" means all non-public information disclosed or made available to Employee in any form that is proprietary to Employer, including trade secrets, customer lists, pricing, business strategies, technical data, and financial information, whether or not marked confidential.

"Covered Customer" means any customer or prospective customer of Employer with whom Employee had material contact during the [____] months preceding the Termination Date.

"Geographic Territory" means: [________________________________]

D.C. Guidance: The geographic scope must be no broader than necessary to protect Employer's legitimate business interests. Consider limiting to jurisdictions where Employee actually performed services or had material responsibility.

"Material Contact" means direct interaction between Employee and a customer, supplier, or business partner in furtherance of Employer's Business.

"Non-Compete Period" means the period beginning on the Termination Date and ending [____] calendar days thereafter.

STATUTORY CAP: The Non-Compete Period may NOT exceed 365 calendar days (730 for qualifying medical specialists). D.C. Code § 32-581.03(a)(1)(A).

"Termination Date" means the date Employee's employment ends for any reason.

4. STATUTORY DISCLOSURE AND NOTICE

4.1 Required Disclosure

In compliance with D.C. Code § 32-581.03a, Employer has provided Employee with the statutory disclosure notice, attached as Exhibit A, which includes:

(a) A statement that Employer has determined Employee is a "highly compensated employee";
(b) A description of the Ban on Non-Compete Agreements Amendment Act of 2020 (as amended);
(c) Information about Employee's right to consult an attorney before signing.

4.2 14-Day Notice Period

This Agreement was provided to Employee on [__/__/____], which is at least 14 calendar days before the earlier of: (a) Employee's start date of [__/__/____]; or (b) the date Employee is requested to execute this Agreement.

4.3 Workplace Posting

Employer represents that it has posted the required workplace notice regarding non-compete restrictions as mandated by D.C. Code § 32-581.05.

5. CONSIDERATION

Employee acknowledges that the following constitutes good and valuable consideration:

☐ Initial employment with Employer
☐ Continued employment plus: [________________________________]
☐ Promotion, salary increase, bonus, or equity: [________________________________]
☐ Access to Confidential Information and specialized training

6. CONFIDENTIALITY OBLIGATIONS

6.1 Non-Disclosure

During and after employment, Employee shall hold all Confidential Information in strict confidence and use it solely for Employer's benefit. Employee shall not disclose Confidential Information to any third party except as authorized by Employer.

6.2 Exceptions

Information is not Confidential Information if it: (a) is publicly available through no fault of Employee; (b) was known to Employee before employment; (c) is independently developed; or (d) is required to be disclosed by law, provided Employee gives prompt notice.

6.3 DTSA Notice

Per 18 U.S.C. § 1833(b), an individual shall not be held liable for disclosure of a trade secret made in confidence to a government official or attorney for purposes of reporting a suspected violation of law, or in a court filing under seal.

7. NON-COMPETITION COVENANT

7.1 Restriction

During the Non-Compete Period, within the Geographic Territory, Employee shall not, directly or indirectly, engage in Competitive Services on behalf of any Competing Business, whether as owner, employee, consultant, contractor, investor, advisor, or otherwise.

7.2 Statutory Limitations (D.C. Code § 32-581.03)

This covenant is subject to the following mandatory limitations:

(a) Maximum Duration: [____] calendar days (not to exceed 365 days, or 730 days for medical specialists);
(b) Functional Scope: Limited to Competitive Services as defined herein;
(c) Geographic Scope: Limited to the Geographic Territory as defined herein;
(d) This covenant applies only during employment and the Non-Compete Period.

7.3 Permitted Activities

(a) Passive ownership of no more than 2% of publicly traded securities;
(b) Employment in a non-competitive role or division;
(c) Teaching, civic, or volunteer activities.

8. NON-SOLICITATION OF CUSTOMERS

During the Non-Compete Period, Employee shall not, for any Competing Business, solicit or attempt to solicit Covered Customers for the purpose of providing Competitive Services.

Note: Broad non-solicitation provisions may be treated as de facto non-competes under D.C. law and subject to the same restrictions. Draft narrowly.

9. NON-SOLICITATION OF EMPLOYEES

For a period of [____] months following the Termination Date, Employee shall not solicit or recruit any then-current employee of Employer with whom Employee worked during the final [____] months of employment.

Note: Under D.C. law, non-solicitation of employees provisions are not subject to the D.C. non-compete ban, but they must still be reasonable.

10. INTELLECTUAL PROPERTY ASSIGNMENT

Employee assigns to Employer all right, title, and interest in work product and inventions created during employment and relating to the Business. Employee shall execute documents necessary to perfect Employer's rights.

11. RETURN OF PROPERTY

Upon termination, Employee shall return all Employer property and Confidential Information and delete Company data from personal devices.

12. REMEDIES FOR BREACH

12.1 Injunctive Relief

Employee acknowledges that breach will cause irreparable harm. Employer is entitled to temporary, preliminary, and permanent injunctive relief without proof of actual damages or posting bond (to the extent permitted by law).

12.2 Additional Remedies

Employer may recover compensatory damages, disgorgement, attorney fees, and costs.

12.3 Tolling

The Non-Compete Period shall be tolled during any period of breach.

13. INDEMNIFICATION

Employee shall indemnify, defend, and hold harmless Employer and its affiliates from all losses, liabilities, damages, costs, and expenses (including reasonable attorney fees) arising from Employee's breach.

14. DISPUTE RESOLUTION

14.1 Governing Law

This Agreement is governed by the laws of the District of Columbia.

14.2 Forum Selection

Exclusive jurisdiction in the courts of the District of Columbia.

14.3 Optional Arbitration

☐ Not applicable.

☐ Applicable – Disputes (except injunctive relief) shall be resolved by binding arbitration in the District of Columbia administered by [________________________________].

14.4 Optional Jury Waiver

☐ Not applicable.

☐ Applicable – Each party waives the right to trial by jury.

15. GENERAL PROVISIONS

15.1 At-Will Employment. This Agreement does not alter at-will employment status.

15.2 Severability; Reformation. If any provision is held unenforceable, the court may modify it to the minimum extent necessary. Remaining provisions remain in force.

15.3 Amendment; Waiver. Must be in writing signed by both parties.

15.4 Assignment. Employer may assign to a successor. Employee may not assign.

15.5 Integration. This Agreement constitutes the entire agreement on its subject matter.

15.6 Counterparts. May be executed in counterparts, including electronically.

15.7 Notice of Future Employment. During the Non-Compete Period, Employee shall provide Employer written notice of new employment within [____] days, including the employer's identity, job title, and duties.

16. ACKNOWLEDGMENTS

By signing below, Employee acknowledges:

☐ Employee has read and understands this Agreement.
☐ Employee received this Agreement at least 14 calendar days before the execution date or start of employment.
☐ Employee received the statutory disclosure notice (Exhibit A).
☐ Employee has been advised of the right to consult an attorney.
☐ Employee's total annual compensation exceeds $162,164 (or $270,274 if a medical specialist) (2026 CPI-adjusted thresholds).
☐ Employee understands these restrictions may limit future employment opportunities.
☐ Employee's execution is voluntary.

17. EXECUTION

IN WITNESS WHEREOF, the parties execute this Agreement as of the Effective Date.

EMPLOYER

Signature: ________________________________________

Printed Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

EMPLOYEE

Signature: ________________________________________

Printed Name: [________________________________]

Date: [__/__/____]

EXHIBIT A -- STATUTORY DISCLOSURE NOTICE

Required Notice Under D.C. Code § 32-581.03a

TO: [Employee Full Legal Name]

FROM: [Employer Legal Name]

DATE: [__/__/____]

Pursuant to the District of Columbia's Ban on Non-Compete Agreements Amendment Act of 2020 (D.C. Law 23-209), as amended by the Non-Compete Clarification Amendment Act of 2022 (D.C. Law 24-175), Employer is providing you with this notice:

1. Employer has determined that you are a "highly compensated employee" as defined by D.C. Code § 32-581.01(1A), meaning your total annual compensation exceeds $162,164 (or $270,274 if you are a medical specialist) (2026 CPI-adjusted thresholds; these amounts are adjusted annually).

2. The District of Columbia generally prohibits non-compete provisions. However, an exception exists for highly compensated employees who meet the statutory salary threshold.

3. You have the right to consult with an attorney before signing the attached Non-Compete Agreement.

4. The non-compete provision attached to this notice:
   - Has a maximum duration of [____] calendar days after termination;
   - Is limited to the following functional scope: [________________________________];
   - Is limited to the following geographic area: [________________________________].

5. Penalties for employer violations: If Employer requires you to sign a non-compete provision in violation of D.C. law, Employer may be subject to fines of $350–$1,000 per employee for the first offense and $1,000–$3,000 per employee for subsequent offenses, plus administrative penalties.

6. For more information, visit the D.C. Office of the Attorney General at https://oag.dc.gov.

Employee Acknowledgment of Receipt:

Signature: ________________________________________

Date: [__/__/____]

19. SOURCES AND REFERENCES

• D.C. Code § 32-581.01 – Definitions: https://code.dccouncil.gov/us/dc/council/code/sections/32-581.01
• D.C. Code § 32-581.02 – Prohibition for covered employees: https://code.dccouncil.gov/us/dc/council/code/sections/32-581.02
• D.C. Code § 32-581.03 – Limitations for highly compensated employees: https://code.dccouncil.gov/us/dc/council/code/sections/32-581.03
• D.C. Code § 32-581.03a – Disclosures to employees: https://code.dccouncil.gov/us/dc/council/code/sections/32-581.03a
• D.C. Code § 32-581.04 – Penalties
• D.C. Code § 32-581.05 – Workplace policy requirements
• D.C. Law 23-209 – Ban on Non-Compete Agreements Amendment Act of 2020
• D.C. Law 24-175 – Non-Compete Clarification Amendment Act of 2022
• 18 U.S.C. § 1833(b) – Defend Trade Secrets Act
• D.C. OAG Non-Compete Information: https://oag.dc.gov

This template is provided by ezel.ai for informational purposes only. It does not constitute legal advice. D.C.'s non-compete ban is among the strictest in the nation. Verify that the employee qualifies as "highly compensated" before presenting this agreement. Have this document reviewed by a licensed D.C. attorney.