Washington recently adopted a major shift in its approach to employee restrictive covenants. Engrossed Substitute House Bill 1155 (ESHB 1155), approved by the Legislature in March 2026 and signed by the Governor this week, eliminates the use of noncompetition agreements in employment and independent contractor relationships beginning June 30, 2027 in specified situations including notices to existing agreement holders by October 1, 2027.
For employers with operations or employees in Washington, the law will require planning and careful contract review—but it does not leave businesses without tools to protect legitimate business interests.
A Shift from “Limited Use” to Near‑Prohibition
Since 2020, Washington has regulated noncompete agreements through income thresholds and reasonableness requirements. Those rules permitted noncompetes for higher‑earning employees if specific statutory conditions were met.
ESHB 1155 replaces that framework with a far more restrictive model. The new law voids nearly all noncompetition agreements, regardless of employee compensation level, job title, or industry. After the effective date, employers may not enter into new noncompetes, attempt to enforce existing ones, or represent that workers remain subject to them.
In practical terms, noncompetes will cease to be a viable post‑employment restriction in Washington outside of narrow sale‑of‑business situations.
Broad Definition of Prohibited “Noncompetition Covenants”
ESHB 1155 expands the...
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