Recent Changes to Washington’s Noncompete Law

Noncompete agreements are commonplace in many employment relationships, but recent changes to Washington’s Noncompetition Covenants statute may provide greater protection for employees who are bound by those agreements. Between 2020 and 2024, the Washington State Legislature amended the noncompete statute to narrow the scope of enforceable agreements while broadening the definition of noncompete agreements to protect employees bound by less traditional agreements. In doing so, the Legislature has given employees greater financial clarity and freedom in making employment decisions, which works to create more fair and equitable employment relationships. 

The amendments to the noncompete statute work to protect a greater number of employees from excessive noncompete agreements. The statute now enforces a salary threshold for enforceable agreements, which increases on a yearly basis. RCW 49.62.020(1)(b). In 2025, noncompete agreements will be unenforceable against employees making less than $123,394.17 per year. Non-Compete Agreements, Wash. Dep’t Lab. & Indus. https://www.lni.wa.gov/workers-rights/workplace-policies/non-compete-agreements (last visited January 2, 2024).  The statute also limits the duration of noncompete agreements, finding agreements that exceed eighteen months post-termination to be “unreasonable and unenforceable.” RCW 49.62.020(2).  Further, the statutes now make noncompete agreements unenforceable if an employee is laid-off, unless “enforcement…includes compensation equivalent to the employee's base salary at the time of termination for the period of enforcement minus compensation earned through subsequent employment…” RCW 49.62.020(1)(c).  Finally, the Legislature has broadened the definition of noncompete agreements to include, “an agreement that directly or indirectly prohibits the acceptance or transaction of business with a customer.” RCW 49.62.010(4). This has the effect of protecting employees who are not working under explicit or traditional non-compete agreements.

The changes to Washington’s noncompete law not only include new restrictions on enforcement of excessive agreements, but also provide a larger population of employees with greater clarity and freedom in making employment-related decisions. Although noncompete agreements may be unavoidable in some employment relationships, employees should be aware of these recent changes and how they might affect the terms of their employment.