Consulting Services Agreement

CONSULTING SERVICES AGREEMENT

District of Columbia

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THIS CONSULTING SERVICES AGREEMENT (this "Agreement") is made and entered into as of the [____] day of [________________], 20[____] (the "Effective Date"), by and between:

CLIENT:
Name: [________________________________]
Address: [________________________________]
City, State/District, ZIP: [________________________________]
Entity Type: ☐ Individual ☐ Sole Proprietorship ☐ LLC ☐ Corporation ☐ Partnership ☐ Other: [________________]
Jurisdiction of Organization: [________________________________]
Federal Tax ID/EIN: [________________________________]
D.C. Basic Business License No. (if applicable): [________________________________]

(hereinafter referred to as "Client")

AND

CONSULTANT:
Name: [________________________________]
Address: [________________________________]
City, State/District, ZIP: [________________________________]
Entity Type: ☐ Individual ☐ Sole Proprietorship ☐ LLC ☐ Corporation ☐ Partnership ☐ Other: [________________]
Jurisdiction of Organization (if applicable): [________________________________]
Federal Tax ID/EIN or SSN: [________________________________]
D.C. Basic Business License No. (if applicable): [________________________________]

(hereinafter referred to as "Consultant")

Client and Consultant are sometimes referred to herein individually as a "Party" and collectively as the "Parties."

D.C. Licensing Note: Businesses operating in the District of Columbia may be required to obtain a Basic Business License from the D.C. Department of Licensing and Consumer Protection (DLCP). Consultants providing professional services may also need to comply with D.C. professional licensing requirements.

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RECITALS

WHEREAS, Client desires to engage Consultant to provide certain consulting and professional services as more particularly described herein and in the Statement of Work attached hereto as Exhibit A; and

WHEREAS, Consultant represents that it possesses the necessary qualifications, skills, experience, expertise, and professional licenses (if required) to perform such consulting services in compliance with all applicable laws and professional standards; and

WHEREAS, Consultant desires to provide such consulting services to Client upon the terms and conditions set forth in this Agreement; and

WHEREAS, the Parties intend to establish an independent contractor relationship and not an employment, partnership, joint venture, or agency relationship; and

WHEREAS, the Parties acknowledge that the District of Columbia has 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), which substantially restricts non-compete agreements;

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

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ARTICLE 1: DEFINITIONS

1.1 "Affiliate" means, with respect to any Party, any entity that directly or indirectly controls, is controlled by, or is under common control with such Party, where "control" means the ownership of more than fifty percent (50%) of the voting securities or equivalent ownership interest.

1.2 "Business Day" means any day other than a Saturday, Sunday, or a day recognized as a federal holiday or a day on which the D.C. government is officially closed.

1.3 "Change Order" means a written document signed by authorized representatives of both Parties that modifies the scope, schedule, fees, or other terms of a Statement of Work.

1.4 "Confidential Information" means any and all non-public information, in any form or medium, disclosed by either Party to the other Party, whether orally, in writing, electronically, or by inspection, that relates to the disclosing Party's business, products, services, research, development, trade secrets, know-how, personnel, customers, suppliers, vendors, finances, pricing, business strategies, marketing plans, technical data, inventions, processes, or other proprietary matters. Confidential Information includes, without limitation, information that qualifies as a "trade secret" under the D.C. Uniform Trade Secrets Act, D.C. Code § 36-401 et seq.

1.5 "Covered Employee" means, under D.C. Code § 32-581.01, an employee who spends more than 50% of his or her work time for an employer working in the District of Columbia, or whose employment for an employer is based in the District of Columbia, and who regularly spends a substantial amount of his or her work time for that employer in the District of Columbia.

1.6 "Deliverables" means any and all work product, reports, analyses, recommendations, assessments, documents, data, software, code, designs, specifications, presentations, inventions, discoveries, improvements, or other materials created, developed, prepared, or produced by Consultant in connection with the performance of the Services.

1.7 "Effective Date" means the date first written above.

1.8 "Highly Compensated Employee" means, under D.C. Code § 32-581.01, an employee whose total annual compensation, including base salary, bonuses, and commissions, is equal to or greater than $150,000 per year (or the adjusted threshold established by the Mayor through rulemaking).

1.9 "Intellectual Property" or "Intellectual Property Rights" means all patents, patent applications, copyrights, copyright registrations, trademarks, trademark registrations, service marks, trade names, trade dress, trade secrets, know-how, inventions, and other intellectual property rights worldwide.

1.10 "Pre-Existing Materials" means any materials, methodologies, tools, templates, frameworks, software, libraries, know-how, techniques, or other intellectual property owned by Consultant prior to the Effective Date or developed independently of the Services.

1.11 "Services" means the consulting and professional services to be provided by Consultant as described in Article 2 and the Statement of Work attached as Exhibit A.

1.12 "Statement of Work" or "SOW" means the document attached hereto as Exhibit A and any subsequent SOWs describing specific Services, Deliverables, timelines, milestones, acceptance criteria, and fees.

1.13 "Work Product" means all Deliverables, inventions, discoveries, improvements, ideas, concepts, techniques, methods, processes, designs, works of authorship, documentation, and other work product conceived, created, or developed by Consultant in connection with the Services.

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ARTICLE 2: SCOPE OF SERVICES

2.1 Engagement. Client hereby engages Consultant, and Consultant hereby accepts such engagement, to perform the Services described in the Statement of Work attached hereto as Exhibit A. The Parties may execute additional Statements of Work from time to time.

2.2 Standard of Performance. Consultant shall perform the Services:

(a) In a professional, diligent, workmanlike, and timely manner;

(b) Consistent with the highest standards in Consultant's industry or profession;

(c) In accordance with the specifications and timelines in the applicable SOW;

(d) Using personnel with appropriate skills, training, and experience;

(e) In compliance with all applicable federal and D.C. laws, rules, regulations, and professional standards; and

(f) Free from material defects and errors.

2.3 Service Deliverables. Consultant shall provide Deliverables per the SOW delivery schedule and acceptance criteria. Unless otherwise specified, Deliverables shall be in electronic format compatible with Client's systems.

2.4 Additional Services. No additional services shall be performed unless documented in writing and signed by both Parties.

2.5 Consultant Personnel.

(a) Key personnel shall not be removed or replaced without Client's prior written consent.

(b) Client may request replacement of unsatisfactory personnel.

(c) Subcontractors may be engaged with Client's prior written consent, provided Consultant remains fully responsible and ensures compliance with this Agreement.

2.6 Client Cooperation. Client shall provide reasonable access to personnel, facilities, and information; designate a point of contact; provide timely decisions and feedback; and perform Client responsibilities identified in the SOW.

2.7 Change Orders. Changes effective only through written Change Orders signed by both Parties.

2.8 Project Management. Consultant shall provide regular status reports, promptly notify Client of issues, and participate in project meetings as reasonably requested.

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ARTICLE 3: TERM AND TERMINATION

3.1 Term. This Agreement commences on the Effective Date and continues for [________________] (the "Initial Term"), unless earlier terminated.

☐ No Automatic Renewal: Expires at end of Initial Term unless extended in writing.

☐ Automatic Renewal: Renews for successive [________________] periods unless either Party provides [____] days' prior written notice of non-renewal.

3.2 Statement of Work Term. Each SOW has its own term. Expiration or termination of a SOW does not affect this Agreement or other SOWs.

3.3 Termination for Convenience.

(a) Either Party may terminate upon [____] days' prior written notice.

(b) Upon termination by Client, Client shall pay for all Services satisfactorily performed, non-cancelable expenses, and pro-rata portion of prepaid fixed fees.

3.4 Termination for Cause. Either Party may terminate immediately upon written notice if:

(a) Material breach uncured within [____] days of written notice;

(b) Incurable material breach;

(c) Insolvency, bankruptcy filing, or cessation of business;

(d) Fraud, gross negligence, or willful misconduct.

3.5 Termination for Non-Payment. Consultant may terminate upon [____] days' notice if Client fails to pay undisputed amounts within [____] days after notice.

3.6 Effect of Termination. Upon termination:

(a) Consultant ceases performing Services;

(b) Consultant delivers all Deliverables, Work Product, Client materials, and Confidential Information within [____] days;

(c) Client pays for Services performed;

(d) Parties return or destroy Confidential Information;

(e) Articles 1, 5, 6, 7, 8, 9, 10, and 14 survive.

3.7 Transition Assistance. Upon request and at Client's expense, Consultant shall provide transition assistance for up to [____] days.

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ARTICLE 4: COMPENSATION AND PAYMENT TERMS

4.1 Fee Structure. Client shall pay fees per the SOW (check all that apply):

☐ Fixed Fee: $[________________], payable: [________________________________].

☐ Hourly Rate:

• Senior Consultant/Principal: $[________] per hour
• Consultant: $[________] per hour
• Associate/Analyst: $[________] per hour
• Administrative/Support: $[________] per hour
• Not-to-Exceed: $[________________]

☐ Daily Rate: $[________] per day (minimum [____] hours per day).

☐ Monthly Retainer: $[________] per month for up to [____] hours. Additional at $[________] per hour. Unused hours ☐ shall ☐ shall not roll over.

☐ Milestone-Based: Per SOW milestones.

☐ Value-Based/Success Fee: [________________________________].

4.2 Rate Adjustments. Rates fixed for the Initial Term. Consultant may increase by up to [____]% upon [____] days' notice for Renewal Terms.

4.3 Expenses and Reimbursement.

(a) Client reimburses reasonable, pre-approved expenses including travel, lodging, meals, parking, materials, and third-party fees.

(b) Thresholds:

• Up to $[________] individually: No pre-approval
• Exceeding $[________]: Prior written approval required
• Monthly cap: $[________]

(c) Itemized receipts for expenses exceeding $[____].

4.4 Invoicing.

(a) Invoices submitted:
☐ Monthly, by the [____] day of the following month
☐ Bi-weekly
☐ Upon milestone completion
☐ Upon completion of Services
☐ Other: [________________________________]

(b) Invoices include: invoice number, date, SOW reference, billing period, Services description, hours (if applicable), expenses, total due, and payment instructions.

(c) Submit to:
Contact: [________________________________]
Email: [________________________________]
Address: [________________________________]

4.5 Payment Terms.

(a) Payment within [____] days of receipt of proper invoice.

(b) Payment by:
☐ Check payable to [________________________________]
☐ ACH/Electronic Transfer to:
Bank: [________________________________]
Routing: [________________________________]
Account: [________________________________]
☐ Wire Transfer to: [________________________________]
☐ Credit Card (subject to [____]% processing fee)
☐ Other: [________________________________]

(c) All payments in U.S. Dollars.

4.6 Late Payment Interest. Pursuant to D.C. Code § 28-3302, any amounts not paid when due shall bear interest at the rate of:

☐ Six percent (6%) per annum (D.C. statutory default rate under D.C. Code § 28-3302); or

☐ [____]% per annum (as agreed by the Parties, subject to D.C. usury limits); or

☐ One and one-half percent (1.5%) per month (18% per annum), as agreed by the Parties;

from the due date until paid in full.

D.C. Interest Law Note: D.C. Code § 28-3302 sets the default interest rate at 6% per annum for obligations where no rate is specified. D.C. Code § 28-3301 permits parties to agree to any rate of interest in a written contract for commercial transactions, but the rate must not exceed 24% per annum except in certain specified transactions. Judgment interest is calculated at 70% of the rate set by the Secretary of the Treasury under I.R.C. § 6621, rounded to the nearest full percent.

4.7 Disputed Invoices. Client shall notify Consultant of disputes within [____] days, specify the dispute, and pay undisputed amounts. Parties resolve within thirty (30) days.

4.8 Taxes.

(a) Consultant is solely responsible for all taxes, including federal and D.C. income taxes, self-employment taxes, and D.C. franchise tax or unincorporated business franchise tax (if applicable).

(b) Client shall not withhold taxes from payments to Consultant.

(c) Consultant shall provide IRS Form W-9. Client shall issue IRS Form 1099 as required.

(d) D.C. imposes an unincorporated business franchise tax on unincorporated businesses with D.C.-source gross income exceeding $12,000. Consultant should consult D.C. tax counsel regarding applicability.

(e) All fees are exclusive of sales and use taxes unless otherwise specified. D.C. imposes sales tax on certain services.

4.9 Records and Audit. Consultant maintains records for [____] years. Client may audit upon reasonable notice. Overcharges exceeding [____]% reimbursed with audit costs.

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ARTICLE 5: CONFIDENTIALITY AND TRADE SECRETS

5.1 Confidentiality Obligations. Each Party agrees to hold Confidential Information in strict confidence, not disclose to third parties, not use except for this Agreement, and take reasonable precautions against unauthorized disclosure.

5.2 Protective Measures. The Receiving Party shall protect Confidential Information using at least the same degree of care it uses for its own, but not less than reasonable care. Access limited to personnel with need to know who are bound by written confidentiality obligations.

5.3 Exclusions. Obligations do not apply to information that is publicly available, was already in Receiving Party's possession, is obtained from a third party without restriction, is independently developed, or is approved for release.

5.4 Required Disclosure. If compelled by law, the Receiving Party shall provide prompt notice, cooperate in seeking protection, disclose only the minimum required, and use reasonable efforts to ensure confidential treatment.

5.5 Trade Secrets Under D.C. Law (D.C. Code § 36-401 et seq.).

(a) D.C. has adopted its own version of the Uniform Trade Secrets Act. Under D.C. Code § 36-401(4), a "trade secret" means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy;

(b) The confidentiality obligations shall continue for as long as information remains a trade secret;

(c) Remedies under D.C. UTSA include:

• Injunctive relief (D.C. Code § 36-402);
• Compensatory damages for actual loss and unjust enrichment (D.C. Code § 36-403(a));
• Exemplary damages up to twice the compensatory damages for willful and malicious misappropriation (D.C. Code § 36-403(b));
• Reasonable attorneys' fees for willful and malicious misappropriation or bad faith claims (D.C. Code § 36-404);

(d) The statute of limitations is three (3) years after discovery or when discovery should have occurred (D.C. Code § 36-405);

(e) D.C. UTSA displaces conflicting tort, restitutionary, and other civil law causes of action (D.C. Code § 36-406).

5.6 Return or Destruction. Upon termination or request, the Receiving Party shall return or destroy Confidential Information and certify compliance.

5.7 Injunctive Relief. Breach may cause irreparable harm; the non-breaching Party may seek injunctive relief without proving actual damages.

5.8 Duration. Except for trade secrets (protected as long as they remain trade secrets), the confidentiality obligations survive for [____] years after termination.

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ARTICLE 6: INTELLECTUAL PROPERTY AND WORK PRODUCT

6.1 Ownership of Work Product. All Work Product is Client's sole and exclusive property. Consultant irrevocably assigns all right, title, and interest, including Intellectual Property Rights, free and clear of encumbrances.

6.2 Work Made for Hire. To the extent Work Product is a "work made for hire" under 17 U.S.C. § 101, Client is the author and owner. Otherwise, Consultant assigns all copyrights to Client.

6.3 Assignment of Inventions. Consultant assigns all inventions, discoveries, and innovations conceived or developed in connection with the Services or using Client's Confidential Information.

6.4 Further Assurances. Consultant shall execute documents to perfect Client's ownership and grants an irrevocable power of attorney for such purposes.

6.5 Consultant's Pre-Existing Materials.

(a) Consultant retains rights in Pre-Existing Materials.

(b) Where incorporated into Deliverables, Consultant grants Client a non-exclusive, perpetual, irrevocable, royalty-free, worldwide license with sublicense rights.

6.6 Third-Party Materials. Not incorporated without Client's prior written consent.

6.7 Moral Rights. Consultant waives moral rights to the extent permitted.

6.8 Client Materials. Client retains all rights. Consultant uses only for the Services.

6.9 Residual Knowledge. Consultant may use general skills and knowledge in unaided memory, without using Confidential Information or trade secrets.

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ARTICLE 7: INDEPENDENT CONTRACTOR STATUS

7.1 Independent Contractor Relationship. The relationship is that of independent contractor. Nothing herein creates a partnership, joint venture, agency, franchise, or employer-employee relationship.

7.2 Control and Discretion. Consultant has sole control over the manner, means, and methods of performance. Client specifies only desired results and outcomes.

7.3 D.C. Independent Contractor Classification.

(a) D.C. Classification Standards: The District of Columbia uses a multi-factor analysis drawing from the common law right-to-control test and IRS factors to determine worker classification. The D.C. Department of Employment Services (DOES) evaluates the totality of the circumstances, including:

• The degree of control exercised by the engaging party over the worker;
• The worker's opportunity for profit or loss;
• The worker's investment in business facilities and equipment;
• The permanence of the relationship;
• The skill required to perform the work;
• Whether the work is an integral part of the engaging party's business;
• Whether the worker provides services to the general public;

(b) Factors Supporting Independent Contractor Status:

• Consultant is free from Client's control and direction;
• Consultant provides services to multiple clients;
• Consultant furnishes its own tools, equipment, and workspace;
• Consultant has invested in its own business;
• Consultant can realize profit or loss;
• Consultant controls its own schedule;
• The relationship is not permanent but is for a defined engagement;
• Consultant maintains its own business identity and licenses;

(c) D.C. Government Contracts: If Client is a D.C. government entity or contractor, additional classification requirements and certifications may apply under D.C. procurement regulations;

(d) Relevant D.C. Agencies:

• D.C. Department of Employment Services (DOES): 4058 Minnesota Ave. NE, Washington, DC 20019; (202) 724-7000
• D.C. Office of Tax and Revenue (OTR): 1101 4th Street SW, Suite 270W, Washington, DC 20024; (202) 727-4829
• D.C. Department of Licensing and Consumer Protection (DLCP): (202) 442-4400

7.4 No Employee Benefits. Consultant is not entitled to any employee benefits from Client.

7.5 Taxes and Withholding.

(a) Client shall not withhold any taxes from payments to Consultant.

(b) Consultant is solely responsible for all taxes, including federal and D.C. income taxes, self-employment taxes, and D.C. unincorporated business franchise tax (if applicable).

(c) Consultant shall provide IRS Form W-9. Client shall issue IRS Form 1099 as required.

(d) Consultant shall indemnify Client from liability arising from misclassification.

7.6 No Authority to Bind. Consultant has no authority to bind Client without prior written consent.

7.7 Consultant's Business Expenses. Consultant is responsible for its own business expenses except for agreed reimbursements.

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ARTICLE 8: REPRESENTATIONS AND WARRANTIES

8.1 Mutual Representations and Warranties. Each Party represents that it is duly organized and in good standing; has full authority; execution is duly authorized; the Agreement is valid and binding; performance will not violate any law or agreement; and there is no material pending litigation.

8.2 Consultant's Representations and Warranties. Consultant represents: (a) qualifications and licenses adequate; (b) Services will be performed professionally and in compliance with D.C. law; (c) Work Product will be original and non-infringing; (d) no conflicts with other obligations; (e) all required D.C. licenses held; and (f) all personnel legally authorized to work.

8.3 Warranty Disclaimer. EXCEPT AS EXPRESSLY STATED, NEITHER PARTY MAKES OTHER WARRANTIES, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.

8.4 Warranty Remedies. If non-conforming, Consultant shall re-perform, repair, or refund at Client's election. Client must notify within [____] days of discovery.

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ARTICLE 9: INDEMNIFICATION

9.1 Indemnification by Consultant. Consultant indemnifies Client from claims arising from: (a) breach; (b) negligence or willful misconduct; (c) IP infringement; (d) misclassification; (e) personal injury or property damage; and (f) violation of law.

9.2 Indemnification by Client. Client indemnifies Consultant from claims arising from: (a) breach; (b) negligence or willful misconduct; (c) use of Deliverables not contemplated; and (d) Client Materials claims.

9.3 Procedures. Prompt notice, sole defense control to indemnifying Party, and reasonable cooperation.

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ARTICLE 10: LIMITATION OF LIABILITY

10.1 Consequential Damages. EXCEPT FOR BREACHES OF ARTICLES 5, 6, 9, AND CLAIMS OF GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR FRAUD, NEITHER PARTY SHALL BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES.

10.2 Cap on Liability. EXCEPT FOR BREACHES OF ARTICLES 5, 6, 9, AND CLAIMS OF GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR FRAUD, TOTAL AGGREGATE LIABILITY SHALL NOT EXCEED:

☐ Total fees paid or payable during the [____]-month period preceding the claim; or

☐ $[________________]; or

☐ [____] times fees under the applicable SOW.

10.3 Essential Basis. THESE LIMITATIONS ARE AN ESSENTIAL BASIS OF THE BARGAIN.

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ARTICLE 11: INSURANCE

11.1 Required Insurance. Consultant shall maintain throughout the term and for [____] years thereafter:

(a) Commercial General Liability: Minimum $[________________] per occurrence and $[________________] aggregate;

(b) Professional Liability (E&O): Minimum $[________________] per claim and $[________________] aggregate;

(c) Workers' Compensation: As required by D.C. Code § 32-1501 et seq. for all Consultant employees. If no employees, provide written statement;

(d) Commercial Auto Liability: Minimum $[________________] per accident (if applicable);

(e) Cyber Liability/Data Breach Insurance: Minimum $[________________] per occurrence (if applicable).

11.2 Insurance Requirements. Policies from companies licensed in D.C. with A.M. Best rating of A- VII or better. Client as additional insured on CGL. Thirty (30) days' notice of cancellation.

11.3 Certificates. Provided upon execution and each renewal.

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ARTICLE 12: DATA PROTECTION AND PRIVACY

12.1 Data Protection Obligations. If Consultant accesses or processes personal information, Consultant shall comply with all applicable laws including D.C. data breach notification (D.C. Code § 28-3852) and D.C. security requirements (D.C. Code § 28-3852.01).

12.2 D.C. Data Breach Notification (D.C. Code § 28-3852).

(a) Consultant shall notify Client of any actual or suspected data breach within [____] hours of discovery;

(b) Under D.C. Code § 28-3852, any person or entity that owns or licenses computerized data that includes personal information of D.C. residents must notify affected individuals in the most expedient time possible and without unreasonable delay;

(c) When a breach includes or is reasonably believed to include a Social Security number or taxpayer identification number, the person or entity must offer identity theft protection services at no cost for a period of not less than eighteen (18) months;

(d) If the breach affects more than 50 D.C. residents, the entity must also notify the Office of the Attorney General for the District of Columbia;

(e) "Personal information" under D.C. law includes: name combined with Social Security number, driver's license number, D.C. identification card number, credit/debit card number, financial account number with access code, or other number or code or combination of data elements that allows access to a person's financial account, or medical information, genetic information, or health insurance information;

(f) D.C. Code § 28-3852.01 requires entities that own, license, maintain, or handle personal information of D.C. residents to implement and maintain reasonable security safeguards appropriate to the nature of the information;

(g) D.C. Code § 28-3852.02 provides a private right of action for affected residents, as well as enforcement by the Attorney General;

(h) D.C. AG Consumer Protection: Office of the Attorney General for the District of Columbia, 400 6th Street NW, Washington, DC 20001; (202) 727-3400.

12.3 Data Security Standards. Consultant shall maintain reasonable administrative, technical, and physical safeguards, including encryption, access controls, security assessments, employee training, and incident response plans.

12.4 Federal Privacy Considerations. Given D.C.'s proximity to federal government operations, Consultant acknowledges that Services may involve data subject to additional federal privacy laws and regulations (e.g., Privacy Act of 1974, FISMA, HIPAA). If applicable, the Parties shall enter into supplemental agreements as required.

12.5 Return or Destruction of Data. Upon termination or request, Consultant shall securely return or destroy personal information and certify compliance.

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ARTICLE 13: NON-COMPETITION AND NON-SOLICITATION

CRITICAL D.C. LAW NOTICE: The District of Columbia has enacted one of the strongest non-compete bans in the nation through the Ban on Non-Compete Agreements Amendment Act of 2020 (D.C. Law 23-209) and the Non-Compete Clarification Amendment Act of 2022 (D.C. Law 24-175), codified at D.C. Code § 32-581.01 et seq. This section must be reviewed carefully by D.C. counsel. Non-compliance carries significant penalties.

13.1 D.C. Ban on Non-Compete Agreements (D.C. Code § 32-581.01 et seq.).

(a) Prohibition on Covered Employees: Effective 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. A non-compete provision is void as a matter of law and unenforceable. (D.C. Code § 32-581.02);

(b) Definition of Covered Employee: A "covered employee" is any employee who is not a "highly compensated employee." An employee who spends more than 50% of work time in D.C. or whose employment is based in D.C. is generally covered;

(c) Highly Compensated Employees Exception (D.C. Code § 32-581.03): An employer MAY enter into a non-compete agreement with a "highly compensated employee" (total annual compensation of $150,000 or more, subject to periodic adjustment), but ONLY if:

• The agreement specifies the functional scope of the competitive restriction;
• The agreement includes a geographical limitation;
• The term does not exceed 365 calendar days from separation (or 730 calendar days for medical specialists);
• The employer provides written notice of the non-compete provision to the employee at least 14 days before the individual commences employment, or if already employed, at least 14 days before the non-compete provision becomes effective;

(d) Application to Independent Contractors: The Ban on Non-Compete Agreements Act applies to "employers" and "employees." The definition of "employee" under D.C. Code § 32-581.01 may encompass individuals who are nominally classified as independent contractors if the working relationship more closely resembles employment. Parties should consult D.C. counsel regarding the applicability of the ban to this consulting arrangement;

(e) Permitted Provisions (D.C. Code § 32-581.04): The Act does NOT prohibit:

• Confidentiality agreements and non-disclosure agreements;
• Non-compete agreements that are entered into in connection with the sale of a business;
• Restrictions that prohibit the taking or use of the employer's proprietary information;
• Restrictions that prohibit the worker from providing services to a client or customer during the worker's engagement with the employer;

(f) Penalties for Violation:

• Civil penalty of $250 to $1,000 per violation for employers with 1-250 employees;
• Civil penalty of $1,000 to $2,500 per violation for employers with more than 250 employees;
• Civil penalty of $1,000 to $2,500 per affected employee if the employer retaliates;
• A violation may also constitute an unfair labor practice;
• The employee may bring a private right of action for relief including injunctive relief, compensatory damages, and reasonable attorneys' fees;

(g) Employer Notice Requirements (D.C. Code § 32-581.04a): Employers must provide written notice to employees of the ban by December 31, 2022, or within 90 days of hire for new employees, and must post a notice in a conspicuous place accessible to all employees.

13.2 Non-Compete Provision.

☐ No Non-Compete: This Agreement does NOT contain a non-compete provision, in compliance with the D.C. Ban on Non-Compete Agreements Act. (RECOMMENDED for most D.C. engagements)

☐ Highly Compensated Employee Non-Compete (if applicable and Consultant qualifies):

This option should ONLY be selected if Consultant is an individual whose total annual compensation under this Agreement equals or exceeds $150,000 (or the current adjusted threshold) AND D.C. counsel has confirmed that Consultant's relationship with Client is one to which the highly compensated employee exception applies.

During the term and for [____] days (maximum 365) after termination, Consultant shall not:
Functional Scope: [________________________________]
Geographic Limitation: [________________________________]

13.3 Non-Solicitation of Clients. During the term and for [____] months after termination, Consultant shall not solicit or divert any client or customer of Client with whom Consultant had contact or about whom Consultant received Confidential Information.

D.C. Law Note: Non-solicitation provisions are generally permissible under the D.C. Ban on Non-Compete Agreements Act as they are not "non-compete provisions." However, if a non-solicitation provision is so broad as to effectively function as a non-compete, it may be subject to challenge.

13.4 Non-Solicitation of Personnel. During the term and for [____] months after termination, neither Party shall solicit, recruit, or hire any employee or contractor of the other Party involved in the Services, without prior written consent.

13.5 Confidentiality-Based Restrictions. The Parties may include confidentiality provisions that restrict the use and disclosure of trade secrets, confidential information, and proprietary employer information without running afoul of the non-compete ban. Such restrictions are expressly permitted under D.C. Code § 32-581.04(a)(1).

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ARTICLE 14: DISPUTE RESOLUTION

14.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the District of Columbia, without regard to conflict-of-laws principles.

14.2 Informal Resolution. The Parties shall first attempt good faith negotiation. Written notice, meeting within [____] Business Days, and negotiation for at least [____] days.

14.3 Mediation. If unresolved:

(a) In Washington, D.C.;

(b) Before a mutually agreed mediator or one selected by the AAA;

(c) Under AAA Mediation Rules;

(d) Costs shared equally.

14.4 Arbitration / Litigation.

☐ Arbitration: Binding arbitration under the D.C. Revised Uniform Arbitration Act (D.C. Code § 16-4401 et seq.) or AAA Commercial Arbitration Rules, in Washington, D.C., before a single arbitrator.

☐ Litigation: Suit in the Superior Court of the District of Columbia or the United States District Court for the District of Columbia. Each Party consents to exclusive jurisdiction and venue.

14.5 Injunctive and Equitable Relief. Either Party may seek injunctive relief from any court without first complying with negotiation or mediation procedures.

14.6 Prevailing Party Attorneys' Fees. The prevailing Party in any action shall be entitled to recover reasonable attorneys' fees and costs.

14.7 Jury Waiver. TO THE FULLEST EXTENT PERMITTED BY D.C. LAW, EACH PARTY IRREVOCABLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING OUT OF THIS AGREEMENT.

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ARTICLE 15: GENERAL PROVISIONS

15.1 Entire Agreement. This Agreement, with all Exhibits and SOWs, constitutes the entire agreement and supersedes all prior agreements.

15.2 Amendments. Only by written instrument signed by both Parties.

15.3 Waiver. Only by written instrument. No failure or delay constitutes a waiver.

15.4 Severability. Invalid provisions modified to the minimum extent necessary; remaining provisions continue.

15.5 Assignment. No assignment without prior written consent, except in connection with a merger, acquisition, or sale of substantially all assets.

15.6 Notices. In writing by personal delivery, certified mail, overnight courier, or email with confirmation, to addresses above.

15.7 Force Majeure. No liability for failure or delay caused by circumstances beyond reasonable control, including government shutdowns (relevant to D.C. operations), acts of God, natural disasters, war, terrorism, epidemics, pandemics, strikes, or civil unrest.

15.8 Counterparts. May be executed in counterparts.

15.9 Electronic Signatures. Under the D.C. Uniform Electronic Transactions Act (D.C. Code § 28-4901 et seq.), electronic signatures are legally effective.

15.10 Headings. For convenience only.

15.11 Construction. Construed without presumption against the drafter.

15.12 Third-Party Beneficiaries. For the sole benefit of the Parties and their successors and permitted assigns.

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ARTICLE 16: DISTRICT OF COLUMBIA-SPECIFIC PROVISIONS

16.1 D.C. Independent Contractor Classification Summary.

Factor	D.C. Standard
Test	Common law right-to-control / IRS multi-factor analysis
Key Inquiry	Whether the engaging party retains the right to control manner and means of performance
Relevant Factors	Control, profit/loss opportunity, investment, permanence, skill, integral part of business
Oversight Agency	D.C. Department of Employment Services (DOES)
Penalties	Back taxes, unemployment contributions, workers' compensation premiums, penalties and interest

16.2 D.C. Ban on Non-Compete Agreements Summary (D.C. Code § 32-581.01 et seq.).

Category	Rule
Default	Non-competes PROHIBITED for covered employees
Exception	Highly compensated employees ($150,000+ annual compensation, adjusted periodically)
Maximum Duration	365 days (730 days for medical specialists)
Requirements	Functional scope, geographic limitation, 14-day advance notice
Permitted Restrictions	NDAs, confidentiality, sale-of-business non-competes, client service restrictions
Penalties	$250-$2,500 per violation; private right of action with damages and attorneys' fees
Notice to Workers	Required notice of the ban to all employees
Effective Date	October 1, 2022

16.3 D.C. Uniform Trade Secrets Act Summary (D.C. Code § 36-401 et seq.).

Element	Detail
Definition	Information deriving value from secrecy, subject to reasonable protective efforts
Injunctive Relief	D.C. Code § 36-402
Damages	Actual loss + unjust enrichment (§ 36-403(a))
Exemplary Damages	Up to 2x for willful/malicious misappropriation (§ 36-403(b))
Attorneys' Fees	Available for willful/malicious misappropriation or bad faith (§ 36-404)
Statute of Limitations	3 years from discovery (§ 36-405)
Preemption	Displaces conflicting civil remedies (§ 36-406)

16.4 D.C. Data Breach Notification Summary (D.C. Code § 28-3852).

Requirement	Detail
Notification Deadline	Most expedient time possible, without unreasonable delay
AG Notification	Required if 50+ D.C. residents affected
Identity Theft Services	18 months if SSN or TIN compromised
Personal Information	Name + SSN, DL/ID#, financial account with access code, medical, genetic, or health insurance info
Security Requirements	Reasonable safeguards required (§ 28-3852.01)
Private Right of Action	Available under D.C. Code § 28-3852.02
Enforcement	AG and private right of action

16.5 D.C. Interest Rate Summary (D.C. Code § 28-3301 et seq.).

Type	Rate
Default (no contract)	6% per annum (D.C. Code § 28-3302)
Maximum Contractual	24% per annum for most commercial transactions (D.C. Code § 28-3301)
Judgment Interest	70% of IRS § 6621 rate, rounded to nearest full percent

16.6 D.C. Workers' Compensation (D.C. Code § 32-1501 et seq.).

(a) The D.C. Workers' Compensation Act requires employers operating in D.C. to provide workers' compensation insurance.

(b) Independent contractors are generally exempt, but misclassification may result in liability.

(c) Contact: D.C. Department of Employment Services, Office of Workers' Compensation, 4058 Minnesota Ave. NE, Washington, DC 20019; (202) 671-1000.

16.7 D.C. Wage Payment and Collection (D.C. Code § 32-1301 et seq.).

(a) If Consultant is reclassified as an employee, the D.C. Wage Payment and Collection Law of 2009 may apply, requiring timely payment of wages, provision of wage statements, and compliance with minimum wage and overtime requirements.

(b) D.C. minimum wage is among the highest in the nation; verify current rate.

16.8 D.C. Business Licensing. Businesses operating in D.C. may need a Basic Business License (BBL) from the Department of Licensing and Consumer Protection. Certain professional services also require separate professional licensing.

16.9 D.C. Human Rights Act. The D.C. Human Rights Act (D.C. Code § 2-1401.01 et seq.) is one of the broadest anti-discrimination laws in the nation and may apply to independent contractor relationships. It prohibits discrimination based on 22+ protected characteristics.

16.10 Federal Overlay. Given D.C.'s unique status as the nation's capital, parties should consider potential applicability of federal laws that may affect consulting relationships, including:

• Federal Acquisition Regulation (FAR) if government contracts are involved;
• Lobbying Disclosure Act (2 U.S.C. § 1601 et seq.) if Services involve lobbying activities;
• Foreign Agents Registration Act (22 U.S.C. § 611 et seq.) if applicable;
• Ethics in Government Act provisions regarding post-employment restrictions for former government officials.

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EXECUTION

IN WITNESS WHEREOF, the Parties have executed this Consulting Services Agreement as of the Effective Date.

CLIENT:

Signature: ___________________________________
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

CONSULTANT:

Signature: ___________________________________
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

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EXHIBIT A: STATEMENT OF WORK (SOW)

SOW Number: [________]
SOW Effective Date: [__/__/____]
Reference Agreement: Consulting Services Agreement dated [__/__/____]

A.1 Project Description

[________________________________]
[________________________________]

A.2 Scope of Services

1. [________________________________]
2. [________________________________]
3. [________________________________]
4. [________________________________]
5. [________________________________]

A.3 Deliverables

#	Deliverable	Description	Due Date	Acceptance Criteria
1	[____________]	[________________________________]	[__/__/____]	[________________________________]
2	[____________]	[________________________________]	[__/__/____]	[________________________________]
3	[____________]	[________________________________]	[__/__/____]	[________________________________]
4	[____________]	[________________________________]	[__/__/____]	[________________________________]

A.4 Timeline and Milestones

Milestone	Description	Target Date
Project Kickoff	[________________________________]	[__/__/____]
Phase 1 Completion	[________________________________]	[__/__/____]
Phase 2 Completion	[________________________________]	[__/__/____]
Final Delivery	[________________________________]	[__/__/____]

A.5 Compensation

☐ Fixed Fee: $[________________]
☐ Hourly Rate: $[________] per hour (estimated [____] hours; NTE $[________________])
☐ Monthly Retainer: $[________] per month
☐ Milestone-Based: Per milestone payment schedule

Payment Schedule:
| Payment # | Amount | Trigger/Due Date |
|-----------|--------|------------------|
| 1 | $[________] | [________________________________] |
| 2 | $[________] | [________________________________] |
| 3 | $[________] | [________________________________] |

A.6 Key Personnel

Role	Name	Hourly Rate
Lead Consultant	[________________________________]	$[________]
Supporting Consultant	[________________________________]	$[________]

A.7 Client Responsibilities

1. [________________________________]
2. [________________________________]
3. [________________________________]

A.8 Assumptions and Constraints

1. [________________________________]
2. [________________________________]

A.9 Acceptance Procedures

Client reviews within [____] Business Days. Accept or reject with reasons. Consultant corrects within [____] Business Days.

A.10 SOW Term

Commences [__/__/____] and continues until [__/__/____].

SOW ACCEPTED AND AGREED:

CLIENT:
Signature: ___________________________________
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

CONSULTANT:
Signature: ___________________________________
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

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EXHIBIT B: PRE-EXISTING MATERIALS (IF APPLICABLE)

#	Description	Ownership	License Terms
1	[________________________________]	Consultant	Per Section 6.5
2	[________________________________]	Consultant	Per Section 6.5

☐ No Pre-Existing Materials will be incorporated.

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AGREEMENT COMPLETION CHECKLIST

☐ All bracketed fields completed with specific information
☐ Appropriate checkboxes selected throughout
☐ Statement of Work (Exhibit A) fully completed and attached
☐ Pre-Existing Materials (Exhibit B) listed or marked as not applicable
☐ IRS Form W-9 obtained from Consultant
☐ D.C. Ban on Non-Compete compliance verified (Article 13)
☐ Non-compete option selected (no non-compete OR qualified highly compensated exception)
☐ D.C. non-compete employee notice requirement satisfied (if Client has D.C. employees)
☐ D.C. Basic Business License(s) verified (if applicable)
☐ Federal overlay considerations reviewed (lobbying, FAR, etc.)
☐ Certificates of insurance obtained
☐ Both Parties have signed the Agreement and all Exhibits
☐ D.C.-licensed attorney has reviewed and approved the Agreement
☐ Copy of executed Agreement provided to both Parties
☐ Calendar reminders set for renewal/termination deadlines

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DISCLAIMER: This template is provided for informational purposes only and does not constitute legal advice. It is designed as a starting point for a Consulting Services Agreement governed by District of Columbia law. The District of Columbia has enacted one of the strongest non-compete bans in the nation (D.C. Code § 32-581.01 et seq.), making legal counsel essential for compliance. This document must be reviewed, customized, and approved by a qualified attorney licensed in the District of Columbia before execution. Laws and regulations change frequently; all statutory citations should be verified for currency before use.

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Last Updated: 2026-02-27
Jurisdiction: District of Columbia
Template Version: 2.0