Employers in Washington State will no longer be able to utilize non-compete agreements in the workplace following a new law just signed by Governor Ferguson on March 23. The law broadly prohibits the use of non-compete agreements between businesses and workers starting in June 2027 and requires employers to issue special notices by October 2027. This Insight will cover everything you should know about the new law and how to get in compliance before next year’s deadlines.
What’s Changed
Washington’s existing law prohibits non-competes except for higher paid workers meeting a minimum annual salary set by law. Current law also imposes nearly automatic damages payable to employees for offending agreements, among other remedies. House Bill 1155, which takes effect in June 2027, keeps the remedies but bans non-competes entirely, with only limited exceptions, as set out below. Lawmakers who supported the bill said non-competes have a negative impact on innovation, entrepreneurship, wages, and job mobility, and they felt the state’s existing regulatory scheme did not go far enough.
Understanding the New Law
Starting on June 30, 2027, essentially all existing non-compete agreements in the state will be null and void for all Washington-based workers, including independent contractors. An exception will continue to exist for agreements made in connection with the sale of a business, so long as the person signing the non-compete purchases, sells, acquires, or disposes of an ownership...
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