On March 23, 2026, Washington Governor Bob Ferguson signed into law the engrossed Substitute House Bill 1155 (ESHB 1155), a sweeping measure that bans nearly all non‑competition covenants for employees and independent contractors. The law takes effect on June 30, 2027.

Comprehensive Ban on Noncompetition Covenants

As enacted, the law renders all non-competition covenants void and unenforceable as of June 30, 2027, regardless of when the agreements were signed. Furthermore, the bill prohibits employers from enforcing, attempting to enforce, threatening to enforce, or entering into any non-competition covenant with any employee or independent contractor.

Expanded Definition of “Noncompetition Covenant”

The statute significantly expands the definition of prohibited non-competition covenants to include:

• Restrictions on performers
• Clauses that prohibit an employee or contractor from accepting or transacting business with customers
• Provisions requiring repayment or forfeiture of compensation triggered by competitive conduct.

Limited Carve-Outs

The bill contains some narrow exceptions:

• Customer non-solicitation agreements that are limited to active solicitation and capped at a term of 18 months post-employment
• Confidentiality agreements prohibiting the use or disclosure only of trade secrets.
• Covenants related to the purchase or sale of goodwill of a business, or in acquiring or disposing of an ownership interest, but only when the individual buying or selling holds more than...

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