DC Noncompete Rules
NEW IN 2021:
BEFORE NEW 2021 LAW:
General Rule: Noncompetes are enforceable if reasonable restraint, only necessary to protect employer's legitimate business interest, and no violation of public policy. Deutsch v. Barsky, 795 A.2d 669 (DC 2002).
Blue Pencil? Ellis v. James V. Hurson Assoc., 565 A. 2d 615 (DC, 1989) - DC Court of Appeals upholds partial enforcement of preliminary injunction, because severable contract terms.
Choice of Law. DC courts will enforce the choice of the parties if there is a substantial relationship between them and the designated state law - see L.G. Balfour Co. v McGinnis, 759 F Supp 840 (DDC 1991); NRM Corp v Hercules, Inc., 758 F 2d 676 (DC Cir. 1984).
Consideration. Offer of employment is sufficient, but non-compete introduced after employment requires new consideration other than continued employment. Assurance of 10 years of future employment was sufficient consideration - Ellis v. James V. Hurson Assoc., 565 A. 2d 615 (DC, 1989).
Duration. There is DC precedent to enforce noncompetes for up to three years post-employment. Ellis v. James V. Hurson Assoc., 565 A. 2d 615 (DC, 1989).
Reasonableness - "totality of circumstances" governs - Deutsch v. Barsky, 795 A.2d 669 (DC 2002).
Remedies. Preliminary injunction requires the moving party to show the following, per Jacksonville Port Authority v. Adams, 556 F. 2d 52 (DC Cir. 1977):
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