On March 9, 2026, the Washington House approved ESHB 1155, and establishes a statewide ban on noncompetition covenants, making all noncompete agreements void and unenforceable in Washington.

This update applies to all Washington employers that engage Washington‑based workers (employees and independent contractors), regardless of employer size, and takes effect on June 30, 2027.

What Employers Need to Do

• Stop Using Noncompetes: no new agreements; do not enforce, attempt to enforce, threaten, or represent that anyone is bound by a noncompete as of the effective date.

• Inventory and Purge Restrictive Language across offer letters, independent contractor (IC) agreements, equity/bonus plans, and handbooks; flag “no accept/no transaction” and repayment/forfeiture‑on‑competition clauses. Both are treated as noncompetes.

• Send Written Notices Soon After June 30, 2027 (no later than October 1, 2027) to current employees, former employees still within any covenant period, and independent contractors whose agreements include noncompetes, stating the noncompete is void and unenforceable (retain delivery records).

• Redraft Non-solicitations to: (1) prohibit active solicitation only; (2) limit the restriction to accounts with a direct relationship; (3) avoid any ban on accepting or transacting business; and (4) set a reasonable duration (commonly cited at up to 18 months).

• Rely on Other Protections: confidentiality, trade secrets, Uniform Trade Secrets Act, intellectual property (IP)/assignment, return of property, and security measures.

• Assess Risk and Train Managers/Recruiters: post‑effective‑date enforcement or misstatements can trigger the greater of actual damages or $5,000, plus attorneys’ fees and costs—exposure multiplies quickly with multiple affected workers.

Overview

• What Changed: Washington bans noncompetition covenants statewide; prior wage‑threshold rules no longer apply.

• Expanded Definition: A noncompete includes any agreement (written or oral) that restrains lawful work; performer–venue restrictions; “no accept” / “no transaction” clauses; and repayment‑ or forfeiture‑on‑competition provisions (including equity forfeiture tied to joining a competitor).

• What is Not a Noncompete: Narrow nonsolicitation, confidentiality, and trade‑secret or invention covenants; sale of business when at least 1% ownership transfers; certain franchisee covenants; and bona fide educational‑expense agreements (not used as de facto noncompetes).

• Repeals: RCW 49.62.030, RCW 49.62.040, and RCW 49.44.190.

• Applicability: The amended sections apply to proceedings commenced on or after June 30, 2027, even if the cause arose earlier; cases filed before that date proceed under prior law.

Why this matters

• Legal Exposure: Any enforcement (or threat/representation) after the effective date can trigger the greater of actual damages or $5,000, plus fees and costs—including when a court partially enforces or reforms an agreement.

• Scope is Broad: “Noncompete” now captures “no accept/no transaction” and repayment/forfeiture‑on‑competition terms—common in equity/bonus plans.

• Policy Direction: The Legislature’s stated goals are mobility, wages, and innovation, while acting without waiting for federal outcomes; the act confirms no change to the UTSA and no impact on tribal sovereignty.

Key Risks for Employers

• Misdrafted Nonsolicits (for example, banning acceptance/transactions or lacking a direct‑relationship limit) will be treated as noncompetes and are void.

• Repayment/Forfeiture Traps (including equity clawbacks triggered by going elsewhere) are non-competes under the statute.
  • A clawback is a contractual provision that allows an employer to recover compensation or benefits already paid to an employee if specified conditions occur.

• Communications Risk: telling a worker they are bound by a noncompete after the effective date is itself a violation.

• Missed Notice Deadline (October 1, 2027) increases litigation and penalty exposure.

Additional information

• Non-competes are Often One‑sided and Depress Mobility/Wages: lawmakers found these covenants are frequently imposed without meaningful negotiation and harm workers’ ability to move and earn more.

• Other Tools are Enough to Protect Businesses: the Legislature points to confidentiality, IP, and trade‑secret protections as adequate alternatives to noncompetes.

• No Change to Washington’s Trade‑secret Law: the act does not amend the UTSA (chapter 19.108 RCW).

• No Change to Tribal Sovereignty: the act does not alter tribal sovereignty or jurisdiction over employment on tribal lands.

Source Reference

• Washington HB 1155 – Prohibiting noncompetition agreements and clarifying nonsolicitation agreements.

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