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Governor Inslee signed a non-compete bill into law, which imposes new restrictions on non-compete agreements.
New Washington State Non-Compete Law: What is a non-compete agreement?
Under the law, a non-competition agreement is any written or oral agreement that prohibits an employee or independent contractor from “engaging in a lawful profession, trade, or business of any kind.”
New Washington State Non-Compete Law: How does this new law restrict non-compete agreements?
These restrictions are substantial and will likely require any business using a non-compete agreement to evaluate their agreements.
A few highlights under the new law, non-compete agreements will only be enforceable if:
An Employee earns more than $100,000 per year (this will be adjusted on a cost of living adjustment each year);
An independent contractor earns $250,000 or more from the Company seeking enforcing if the agreement;
The Employer discloses the terms of the non-compete when making an offer of employment (or earlier);
The Employer compensates Employees that are laid off, but still subject to a non-compete agreement;
The non-compete agreement does not cover a period of more than eighteen months.
For existing Employees who are asked to sign a non-compete, the Employer must provide consideration above and beyond continued employment.
New Washington State Non-Compete Law: What remedy is offered for a violation of this new law?
This new law also provides new remedies for violation. If a court or arbitrator determines that a covenant of a non-compete agreement violates this new law, the violator must pay the aggrieved person a penalty of $5,000 (plus attorney’s fees and costs) or actual damages (plus attorney’s fees and costs).
New Washington State Non-Compete Law: When does this new law go into effect?
The law goes into effect on January 1, 2020.
New Washington State Non-Compete Law: What might I do to prepare for this new law?
Many businesses use non-compete agreements and this new law will likely have an impact on these agreements and businesses’ ability to use them.
The attorneys at Leos & Gilkerson, PLLC advise on business issues and would be happy to discuss this new law with you, feel free to email or call us.
Disclaimer: The information in this blog post (“post”) is provided for general informational purposes only and should not be construed as legal advice from Leos & Gilkerson, PLLC or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a licensed lawyer.