Washington State Adopts Law Restricting Noncompete Agreements

May 07, 2019

Washington State has passed new legislation that will significantly limit the enforceability of noncompetition agreements under Washington law. Employers may not enter into or enforce a “noncompetition covenant” unless the restricted employee’s yearly earnings exceed $100,000. Noncompetition covenants exceeding 18 months are presumed to be unreasonable and unenforceable. Noncompetition covenants are unenforceable if the employee is discharged as a result of a layoff, unless the agreement requires that the employer pay the employee’s base salary during the period of enforcement. Distinct from the noncompete portions of the law, employers may not restrict supplemental or outside employment of current employees who make less than twice the applicable state minimum wage. We recommend employers have SESCO review non-compete agreements, or other agreements affecting the employment relationship, to ensure compliance with federal and state law.