Washington State Noncompete Ban

Ed. Note:  We note that this new law is part of a national trend and, in some ways, expands the scope of what is prohibited, as well as imposing new penalties.

Washington state has enacted a new law that renders nearly all noncompete agreements void and unenforceable for Washington-based workers. It becomes effective in 2027.

Washington law already prohibits noncompete agreements for employees earning less than $126,858.83 in 2026 and independent contractors earning less than $317,147.090 in 2026. The new law bans noncompete agreements for all employees and independent contractors, with limited exceptions.

The most significant aspects are:

• It considerably expands the definition of noncompetition covenant to include:

• A covenant that prohibits or restrains an employee or independent contractor from engaging in a lawful profession, trade, or business of any kind.

  
  

• An agreement between a performer and a performance space, or between a third party and a performance space that schedules the performer, that prohibits or restrains the performer from engaging in a lawful performance.

• An agreement that directly or indirectly prohibits the acceptance or transaction of business with a customer.

• The ban also now applies to any provision in an agreement that would require an employee, as a consequence of engaging in a lawful profession, trade, or business, to return, repay, or forfeit any right, benefit, or compensation.

• The broad noncompete ban applies regardless of when the agreement was entered into, including agreements entered into before the enactment of the new law, if those provisions remain in effect as of June 30, 2027.

• The new law excludes certain types of restrictions from the definition of a noncompetition covenant, which employers may continue to use to protect their interests. No solicitation agreements are not prohibited outright; however, they are to be narrowly construed and have a maximum postemployment duration of 18 months.

• Permissible no solicitation provisions include:

  
  

  • Employers may prohibit former employees from soliciting current employees.

    
    

  • Employers may prohibit solicitation designed to shift business away from the employer—but only if the employee had substantially developed direct relationships with those prospective and current customers through their work.

    
    

  • Employers may restrict the solicitation of prospective customers, but only if the employee had direct contact with that customer.

    
    

  • No solicitation agreements do not include provisions directly or indirectly prohibiting employees from accepting or transacting business from an employer’s customers.

• Employers may still enter into and enforce:

  
  

  • Confidentiality agreements

    
    

  • Covenants prohibiting the use or disclosure of trade secrets; certain covenants entered into in connection with the sale of a business involving at least a 1% ownership interest

    
    

  • Franchise agreements that comply with Washington state law

    
    

  • Certain education-expense repayment agreements that satisfy specified statutory conditions.

Notice Obligations for Existing Noncompete Agreements

The new law requires employers to make reasonable efforts to provide written notice by 1 October 2027 to current and former workers whose covenants remain in effect, advising them that those provisions are void and unenforceable.

Consequences

Employers violate the new law not only by enforcing a noncompete covenant but also by

• Attempting to enforce a noncompete covenant

  
  

• Threatening to enforce a noncompete covenant

  
  

• Entering into or attempting to enter into such an agreement

  
  

• Representing that a worker remains subject to one.

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The law permits any person aggrieved by a violation to bring a cause of action against the employer. Violations may result in the greater of actual damages or a statutory penalty of $5,000, plus attorneys’ fees and costs.