On March 9, 2026, Washington's legislature passed HB 1155, which effectively bans non-compete agreements for all workers in the state. Governor Ferguson signed the bill into law on March 23, 2026, and it takes effect on June 30, 2027.
Unlike current Washington law, which permits non-competes for
workers earning above certain income thresholds, HB 1155 eliminates
this income-based approach and bans all non-compete agreements
regardless of income. The ban applies retroactively to all
non-compete covenants, even those entered into before the effective
date. The law significantly broadens what constitutes a prohibited
"noncompetition covenant" to include any provision that
requires workers to return, repay, or forfeit rights, benefits, or
compensation as a consequence of engaging in lawful work. The
definition also explicitly covers agreements that directly or
indirectly prohibit accepting or transacting business with a
customer.
The law preserves narrowly drafted non-solicitation agreements,
confidentiality agreements, and trade secret protections.
Non-solicitation agreements may prohibit employees from soliciting
other employees to leave or from soliciting customers, patients, or
clients with whom the employee established or substantially
developed a direct relationship, the latter for up to 18 months
post-termination; however, they cannot prohibit accepting or
transacting business with customers. The law also exempts
non-competes entered in connection with purchasing or selling
goodwill or ownership interests of 1% or more and permits written
educational expense repayment agreements under specified
conditions.
By October 1, 2027, employers must make reasonable efforts to
notify current and former employees and independent contractors
whose non-competes are still within their effective period that
such agreements are void and unenforceable. Under the law, it is a
violation for employers to enforce, attempt to enforce, threaten to
enforce, represent that a worker is subject to, or enter into
non-compete covenants after June 30, 2027. Violators must pay
aggrieved persons the greater of actual damages or a $5,000
statutory penalty, plus attorneys' fees and costs. The law
applies to all legal proceedings commenced on or after June 30,
2027, regardless of when the underlying claim arose. Courts must
liberally construe the statute and narrowly construe its
exceptions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
