Overview
- Washington's ESHB 1155, which Gov. Bob Ferguson signed Monday, voids nearly all noncompete agreements for Washington-based workers starting June 30, 2027.
- The law applies retroactively, so existing noncompetes that would still be in effect on that date become unenforceable.
- Employers must make reasonable efforts to notify affected current and former workers in writing by October 1, 2027 or face at least a $5,000 penalty per worker plus attorneys’ fees, and violations also include threats or attempts to enforce banned terms.
- The statute defines a noncompete broadly to include bans on accepting business from customers and provisions that force workers to repay or forfeit compensation for taking lawful jobs.
- Limited restraints remain lawful, including confidentiality and trade secret protections, tightly drawn non-solicitation up to 18 months, sale-of-business covenants tied to at least a 1% ownership stake, certain franchise terms, and specific education-expense repayment agreements, prompting employers to audit and rewrite contracts now.