Employment-based noncompete agreements are void and unenforceable in Washington State as of June 30, 2027, under the recently passed HB1155 (the Act). The Act applies retroactively to all agreements challenged in proceedings that commence on or after June 30, 2027.

The Act defines prohibited noncompete agreements broadly, to include covenants or provisions:

• that prohibit or restrain an employee or independent contractor “from engaging in a lawful profession, trade, or business of any kind”;
• that prohibit the acceptance or transaction of business with a customer (sometimes called “no-accept” agreements); and

The Act does not apply to the following agreements:

• Non-solicitation agreements (however, such agreements must be limited in time to 18-months after termination and limited in scope to current or prospective clients, customers, or patients with whom the employee “established or substantially developed a direct relationship”);
• Agreements to repay out-of-pocket education expenses, if the agreement expires within 18 months of the date the employee started employment, limits repayment to the pro rata portion of the remaining time of the 18-month period, and releases the employee from the obligation to repay if the employee terminates the employment relationship for “good cause” (defined here); and
• Agreements entered by a franchisee, subject to the franchise sale meeting certain legal requirements.

The Act also includes a sale-of-business exception, but the exception...

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