D.C. Non-Compete Ban Threshold Rises to $162,164, Exempting Only Top Earners from Enforcement

Effective in 2026, the District of Columbia has raised the salary threshold for its near-universal ban on non-compete agreements to $162,164. For medical specialists, the bar is now set even higher at $270,274.[1][2]

This means that any employment contract attempting to restrict a worker earning below these amounts from joining a competitor or launching a rival venture is legally void. The adjustment is part of an annual inflation-indexing mechanism built into the Ban on Non-Compete Agreements Amendment Act, which originally took effect in 2022.[4][5]

For the vast majority of the D.C. workforce, the updated threshold translates to absolute professional mobility. Employees can negotiate higher salaries, switch to rival firms, or start independent businesses without the looming threat of litigation that historically kept workers locked into their current roles.[2][6]

The D.C. law operates as a strict prohibition rather than a set of guidelines. If an employee's total compensation—including base salary, bonuses, and commissions—falls short of the $162,164 mark, the employer is legally prohibited from even asking the employee to sign a non-compete clause.[2][4]

The only workers exempt from this ban are "highly compensated employees" who clear the new financial hurdles. However, even for these top earners, employers do not have a free pass to draft overly broad restrictions.[1][2]

For an agreement to be enforceable against a highly compensated employee, the employer must provide a specific legal notice and grant a mandatory 14-day review period before the employee signs the document.[2]

Furthermore, the restrictions are strictly time-limited. A non-compete cannot extend beyond 365 days after the employee's departure for general highly compensated workers, or 730 days for medical specialists.[2][4]

The agreements must also be narrowly tailored. Courts and the D.C. Department of Employment Services require that any enforceable non-compete specify a clear geographic area and define the exact competitive roles that are restricted, ensuring the employee is not entirely locked out of their industry.[1][5]

D.C.'s aggressive threshold increase arrives during a period of intense national fragmentation regarding restrictive covenants. After the Federal Trade Commission's attempt to implement a nationwide ban on non-competes was struck down in court, the regulatory battleground shifted entirely to the state level.[3][4]

While states like California, North Dakota, and Oklahoma maintain absolute bans on non-competes regardless of income, jurisdictions like D.C., Washington State, and Colorado have adopted the salary-threshold model. Washington State, for instance, requires employees to earn over $126,858 before a non-compete can be enforced, while Colorado sets its bar at $130,014.[3][4]

For employers operating in the Washington metropolitan area—often spanning D.C., Maryland, and Virginia—the shifting thresholds create a complex compliance puzzle. Maryland bans non-competes for workers earning below roughly $78,000, while Virginia restricts them for employees earning less than the state's average weekly wage.[3][6]

The rise of remote work further complicates enforcement. Legal experts note that non-compete enforceability is generally governed by the jurisdiction where the employee lives and works, not where the company is headquartered. A non-compete drafted for a Virginia-based company becomes void if the remote employee resides in D.C. and earns $150,000.[6]

The D.C. government has signaled strict enforcement of the new thresholds. Employers who attempt to enforce void agreements or fail to provide the required 14-day notice to highly compensated employees face significant penalties, including fines ranging from $350 to $1,000 per violation, alongside potential liability for the employee's lost compensation and legal fees.[3][5]

It is important to distinguish non-competes from other restrictive covenants. The D.C. law does not prohibit non-solicitation agreements—which prevent departing employees from poaching clients or colleagues—nor does it invalidate confidentiality agreements designed to protect proprietary trade secrets.[4][6]

While the salary threshold provides a bright-line rule, uncertainty remains around how courts will calculate total compensation for employees whose income heavily relies on variable commissions or year-end bonuses that may push them just over or under the $162,164 mark.[6]

As the 2026 threshold takes effect, human resources departments across the capital are being forced to audit their employment contracts. For workers, the message is clear: unless you are in the top tier of earners, your next career move is legally protected.[1][6]