Following the national trend of restricting employment-based non-compete covenants, Washington has effectively banned all non-competes effective June 30, 2027. Governor Bob Ferguson recently signed Engrossed Substitute House Bill 1155 (“SB 1155”), which bans non-compete agreements for virtually all employees and independent contractors in Washington.
While Washington previously limited restrictive covenants through legislation (discussed here), SB 1155 eliminates the old wage-threshold approach entirely and deems virtually all non-compete agreements void and unenforceable regardless of when they were signed. The key requirements and implications of the new law are as follows:
Broad Definition of Non-Compete
The law defines a non-compete broadly. It covers any written or oral agreement that prohibits or restrains an employee or independent contractor from engaging in a lawful profession, trade, or business. The definition also captures agreements that prohibit a worker from accepting or transacting business with a customer, as well as any agreement that requires a worker to return, repay, or forfeit compensation or benefits as a penalty for engaging in lawful work. Such an expansive definition means employers should scrutinize not just their standalone non-compete agreements, but also ancillary provisions in offer letters, equity agreements, and contractor agreements that could be construed as non-competes.
What Remains Permissible
The following categories of agreements...
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