A new Washington law wiping out nearly all non-compete agreements across the state has startup advocates cheering and employers scrambling to figure out what comes next.
The law, signed March 23 by Gov. Bob Ferguson, voids existing agreements and prohibits new ones regardless of salary level or company size, with minimal exceptions.
Set to take effect June 30, 2027, it’s the latest effort to restrict the use of non-compete deals. These clauses in employment agreements are often used to protect intellectual property and trade secrets, sometimes restricting job mobility and client relationships in the process.
Passed as House Bill 1155, the law has sparked debate across the state’s tech and business ecosystem. Supporters say it will unlock innovation and make it easier for startups to compete. Others argue the law goes too far, especially in its retroactive ban of agreements.
Expanding on past reforms: Washington previously passed reforms in 2019 that limited non-competes to higher earners and capped them to 18 months.
The new rules go further. Non-competes will only be enforceable if:
The ban is retroactive, meaning nearly all active non-competes will become void. The law also bans broad non-solicitation clauses that keep...
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