Washington State Enacts Law Restricting Non-Compete Agreements

Two businessmen shaking hands

The new law goes into effect on January 1, 2020.

September 23, 2019
Ellie Perka - Ahlers Cressman & Sleight PLLC

Washington State has enacted a new law that means big changes for employers. The new law, in effect on January 1, 2020, will dramatically limit the enforcement of non-compete agreements in our state and imposes tough penalties on employers found to be in violation.

While the new law does not take effect for many months, businesses should nonetheless act quickly and before year’s end to evaluate practices and, if necessary, revise existing and future non-compete agreements to ensure compliance. Under the new law, if an employee successfully proves a company’s non-compete agreement is unenforceable, then the employer will be required to pay the greater of $5,000 or an employee’s actual damages, plus the employee’s attorneys’ fees (and its own, in defending the non-compete), expenses and costs incurred in challenging the agreement.

Brief Summary of Changes

Washington Courts have typically disfavored restrictive covenants but usually enforced a non-competition agreement that protected an employer’s legitimate business interests and was reasonable in scope, geographic reach, and duration. The Legislature halted this trend through passage of Engrossed Substitute House Bill 1450.

Ms. Perka may be contacted at ellie.perka@acslawyers.com



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