Earlier this month, we reported on the Federal Trade Commission’s (FTC) proposed regulation that, if adopted, would essentially abolish employee non-competes across the United States. While we await (and will promptly report on) further developments on that regulation, we note that the FTC’s proposed regulation did not occur in a vacuum.
Instead, as part of a nationwide trend to restrict non-compete agreements, many states have already taken the mantle of imposing income thresholds prohibiting non-competes for low-earning employees. We have written about such restrictions here and here. In several states, the threshold increases annually. Specifically, thresholds in Colorado, Washington, Maine, Rhode Island, Oregon, and Virginia increase each year. So, as we ring in 2023, we also ring in higher income thresholds in those states.
Because it is questionable whether the proposed FTC regulation will become law—and even if it does, it will take several months—employees should continue to monitor and comply with state-by-state non-compete laws as the proposed regulation works through the legislative process.
Two states have already published their new non-compete income thresholds. Washington’s non-compete statute, RCW 49.62.020, originally established an income threshold of $100,000. The Washington State Department of Labor & Industries adjusts the threshold annually to account for inflation. According to its website, the 2023 threshold for employees is $116,593.18....
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