Unfair Competition in Washington, DC

Name: Waxman Litigation — Chevy Chase office
Address: 5425 Wisconsin Ave Ste 600, Chevy Chase, MD, 20815, US

Since D.C. banned non-competes for covered employees, the strongest employer theory is usually not the non-compete at all. The Ban on Non-compete Agreements Act expressly excludes restrictions on confidential and proprietary employer information from the definition of a non-compete, and defines proprietary information to include customer lists, client lists and trade secrets under § 36–401(4). So the durable protections are the ones that survived the ban: trade secret claims, confidentiality obligations, and carefully drawn non-solicitation terms.

Which theory actually protects the business?

Theory	Still available?	Where it sits
Trade secret misappropriation	Yes — full statutory remedies	D.C. Uniform Trade Secrets Act, §§ 36–401 to 36–406
Confidentiality / NDA	Yes — expressly excluded from the non-compete ban	§ 32–581.01(15)(B)(i)
Non-solicitation	Depends how it is drawn	§ 32–581.01(15); § 36–401(4)
Non-compete	Only for highly compensated employees, meeting § 32–581.03	§§ 32–581.02, 32–581.03
Tortious interference	Yes, as a separate claim against the competitor	Common law

Sources: D.C. Code §§ 32–581.01 to 32–581.03; §§ 36–401 to 36–406.

What the non-compete ban does not touch

“Non-compete provision” means a provision in a written agreement or a workplace policy that prohibits an employee from performing work for another for pay or from operating the employee’s own business. The term “non-compete provision” does not include an otherwise lawful provision: (A) Contained within or executed contemporaneously with an agreement between the seller of a business and one or more buyers of that business wherein the seller agrees not to compete with the buyer’s business; (B) That prohibits or restricts an employee from: (i) Disclosing, using, selling, or accessing the employer’s confidential employer information or proprietary employer information; (ii) Accepting money or a thing of value for performing work for a person other than the employer, during the employee’s employment with the employer, because the employer reasonably believes the employee’s acceptance of money or a thing of value under such circumstances will: (I) Result in the employee’s disclosure or use of confidential employer information or proprietary employer information; (II) Conflict with the employer’s, industry’s, or profession’s established rules regarding conflicts of interest; (III) Constitute a conflict of commitment if the employee is employed by a higher education institution; or (IV) Impair the employer’s ability to comply with District or federal laws or regulations; a contract; or a grant agreement; or (C) That provides a long-term incentive. (16) “Proprietary employer informati…

D.C. Code § 32–581.01(15)

Read that definition carefully: sale-of-business covenants, confidentiality and proprietary-information restrictions, conflict-of-interest rules during employment, and long-term incentives are all outside the ban entirely.

What can be recovered?

The Trade Secrets Act is where the real remedies are, and it reaches threatened conduct, not only completed misappropriation.

(a) Actual or threatened misappropriation may be enjoined. Upon application to the court, an injunction shall be terminated when the trade secret has ceased to exist, but the injunction may be continued for a reasonable period of time to eliminate commercial advantage that otherwise would be derived from the misappropriation. (b) In exceptional circumstances, an injunction may condition future use upon payment of a reasonable royalty for no longer than the period of time for which use could have been prohibited. Exceptional circumstances include, but are not limited to, a material and prejudicial change of position prior to acquiring knowledge or reason to know of a misappropriation that renders a prohibitive injunction inequitable. (c) In appropriate circumstances, an affirmative act to protect a trade secret may be compelled by court order.

D.C. Code § 36–402 — Injunctive relief

Damages include actual loss plus unjust enrichment, or a reasonable royalty, with exemplary damages up to twice that award for willful and malicious misappropriation (§ 36–403), and fees under § 36–404. Urgent matters go through emergency injunctions.

How long is there to act?

Trade secret claims run 3 years from discovery under § 36–406, and a continuing misappropriation counts as a single claim, so delay does not reset the clock. Other theories run on their own periods under § 12–301. Do not calculate a deadline from this page.

Frequently asked questions

Are our old non-competes worthless now?

They are not necessarily worthless. The ban applies to agreements entered into on or after 1 October 2022 for covered employees, and highly compensated employees remain within § 32–581.03. But a restriction on confidential information is generally the stronger tool regardless.

Can we stop a competitor hiring our whole team?

Non-solicitation terms and trade secret claims are the usual routes, and tortious interference may lie against the competitor itself. How the terms are drawn matters more than what they are called.

Is a customer list protectable?

A customer list can be protected. The trade-secret definition at § 36–401(4) protects information with independent economic value that is the subject of reasonable efforts to keep it secret, and § 32–581.01 treats client lists as proprietary employer information.

Do we need to have sued the employee to sue the competitor?

No. A claim against a competitor for interference is a separate cause of action with its own elements.

Who can be sued when a competitor takes the business by improper means?

The person who used the improper means and, on the right facts, whoever used what they produced. D.C. Code § 36–401(1) defines improper means as theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means — so the question is the method, not the fact of competition.

Why does the underlying theory matter more than the label?

“Unfair competition” describes conduct rather than naming a single cause of action. Each available theory carries its own elements, its own remedy and its own limitation period, so identifying the theory early is what determines whether an injunction, damages or a fee award is on the table at all. See D.C. Code § 12-301.

Which court hears a claim against a competitor based outside the District?

The Superior Court of the District of Columbia can, where the long-arm statute reaches the defendant. D.C. Code § 13–423(a)(1) extends personal jurisdiction to a person, acting directly or by an agent, as to a claim arising from transacting any business in the District.

How is a case built where there is no enforceable non-compete?

On the information rather than the employment. D.C. Code § 36–401(4) defines a trade secret as information deriving independent economic value from not being generally known or readily ascertainable, and which is the subject of reasonable efforts to maintain its secrecy — so the evidence needed is what the business actually did to protect it.

Who pays if the claim itself turns out to be overreaching?

The company that brought it can end up paying. The fee provision runs both ways: the same section that rewards a business facing willful and malicious misappropriation also exposes one that brings a misappropriation claim in bad faith. That is a real constraint on using litigation simply to slow a departing team down. See D.C. Code § 36-404.

Sources and legal authorities

General information about D.C. law, not legal advice. Which rule applies depends on the entity, the agreement and the facts.