Share the encrypted .env file through git and the development key through your team's approved private channel.
$ dotenvx keypair DOTENV_PRIVATE_KEY
Your teammate saves the value in an ignored .env.keys file:
DOTENV_PRIVATE_KEY="your-shared-private-key"
They use the main compose.yaml:
$ docker compose --env-file .env.keys up --build
$ docker compose --env-file .env.keys down
Keep .env.keys out of git and Docker images. Anyone retaining the key can still decrypt the file after repository access is removed.