Washington yesterday 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 yesterday, 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.
Washington yesterday 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 yesterday, 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...
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