Quick Hits
- On March 23, 2026, Washington Governor Bob Ferguson signed a bill into law that will ban noncompete agreements for employees and independent contractors.
- The law will declare all current employment-based and independent contractor-based “noncompetition agreements” to be void and unenforceable, and will prohibit employers from enforcing them.
- The law will prohibit entering into new employment-based and independent contractor-based noncompetition covenants.
- The ban will not apply to certain other restrictive covenants, including narrowly-drafted nonsolicitation agreements.
- The law takes effect on June 30, 2027, and it will require employers to notify employees, former employees, and independent contractors, in writing, by October 1, 2027, that any applicable noncompete agreements are no longer enforceable.
Banning Noncompetition Agreements
The signing of SHB 1155 comes two weeks after the Washington State Legislature passed the bill, and builds off the 2019 restrictions on noncompete agreements, which had limited their use to high-earning employees and even higher-earning independent contractors. Any “noncompetition covenant”—meaning any agreement “that prohibits or restrains an employee or independent contractor from engaging in a lawful profession, trade, or business of any kind”—will be unlawful in Washington starting June 30, 2027. The definition of “noncompetition covenant” is to be liberally construed.
SHB 1155 will further require employers to “make reasonable efforts to provide written notice” by October 1, 2027, to all current employees and independent contractors with noncompetition covenants that their noncompetition covenants are void and unenforceable. Employers must also inform all former employees and independent contractors who are within the restricted period of a noncompetition covenant that the noncompetition covenant is void and unenforceable.
The ban excludes certain other restrictive covenants from the definition of a noncompetition covenant, including narrowly drafted nonsolicitation agreements, confidentiality agreements, covenants prohibiting the disclosure of trade secrets or inventions, noncompetition covenants for individuals who are acquiring or disposing of at least one percent of the total ownership interest as part of the sale or acquisition of a business, noncompetition covenants as part of certain franchisee transactions, or “an agreement to pay for education expenses between an employer and a current or potential employee.”
The law adds Washington to the growing list of states that ban most employment-based noncompete agreements, including California, Minnesota, North Dakota, and Oklahoma.
More information on SHB 1155 can be found here.
Ogletree Deakins’ Seattle office and Unfair Competition and Trade Secrets Practice Group will continue to monitor developments and will provide updates on the Healthcare, Hospitality, Multistate Compliance, Sports and Entertainment, Unfair Competition and Trade Secrets, and Washington blogs as additional information becomes available.
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