D.C. Could Finally Ban Noncompete Clauses Following Months of Lobbying and Horse-Trading

When is a ban on something not really a ban? Just ask the D.C. Council. Technically, lawmakers passed a full prohibition on noncompete clauses in December 2020, and it took effect four months later. But due to the many vagaries of the city’s legislative process, and some intense lobbying from local business interests, the ban on that contracting practice has never taken effect.

That could finally change Tuesday, as the Council is set to once again pass a bill banning noncompetes for D.C. workers just before its two-month summer break. If all goes well, that would make the ban effective as of Oct. 1, more than a year after anyone thought it might actually become law.

So what took so long? There’s a growing consensus among economists that noncompete provisions hurt workers and stifle competition, preventing everyone from fast-food workers to tech executives from jumping ship for better pay, and several other states have taken similar steps to ban them entirely. President Joe Biden has also pressed for a nationwide prohibition. So why did deep-blue D.C. struggle to make this a reality?

To start with, the original ban was passed with the dreaded “subject to appropriations” caveat, meaning it couldn’t actually take effect until Mayor Muriel Bowser or the Council budgeted money to enforce it (in this case, the Department of Employment Services said it needed funding for staff to write rules and review complaints related to noncompetes). This is a popular move within the Wilson Building that creates the illusion of progress, but opens the door for obstruction or more horse-trading.

That’s precisely what happened in this case, as some of the city’s most influential business lobbyists used that delay to start pressing for changes, particularly some sort of salary ceiling that lets companies enforce noncompetes for highly paid executives. Everyone from the D.C. Chamber of Commerce and the Federal City Council to the Consortium of Universities of the Washington Metropolitan Area started pushing back against the bill, and those are all voices that tend to get heard in D.C. government. Even the Washington Nationals sent their lobbyists to push for changes.

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