As our readers know, in 2024 the Federal Trade Commission’s (FTC) proposed regulation to eliminate almost all noncompete agreements did not come to fruition — at least for now. As we reported earlier this month, however, the failure of the FTC ban has not stopped states from sharpening their hostility toward employer non-compete agreements.
One method many states use to restrict noncompete agreements is income thresholds, which prohibit employers from entering into noncompete agreements or other restrictive covenants with employees who earn below a certain wage. We previously wrote about these restrictions here. In several states, the threshold increases annually. Specifically, thresholds in Washington, Colorado, Maine, Rhode Island, Oregon, Virginia, and Washington D.C. increase each year. So, as we ring in 2025, we also ring in higher income thresholds in those states.
Washington: Washington’s noncompete 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 2025 threshold for employees is $123,394.17. Washington maintains a higher income threshold for independent contractors, which increases to $308,485.43 in 2025.
Colorado: Colorado’s new noncompete law established a noncompete income threshold and a non-solicitation income threshold. The noncompete threshold is based on the Colorado Department of...
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