What happened?

On January 23, 2025, the Washington Supreme Court ruled that non-compete agreements preventing employees from working for competitors during their employment may violate state law, as they could undermine protections for low-wage workers.

Overview:

The Washington Supreme Court ruled in Springer v. Freedom Vans LLC that non-compete agreements preventing employees from working for competitors during employment may violate state law. The court found that the employer’s interpretation of the duty of loyalty was too broad, potentially undermining protections for low-wage workers. This decision highlights the need to balance business interests with employee economic freedom and may influence similar laws in other states.

Highlights from the ruling include:

1. Protection for Low-Wage Workers: The court emphasized that employees earning less than twice the state minimum wage (currently $33.32 per hour) are broadly protected from unreasonable restrictions on obtaining supplemental employment.

2. Review Non-Competes: Companies with employees in Washington should review their non-compete agreements, especially those affecting low-wage workers, to ensure compliance with this ruling.

3. Legislative Intent: The court highlighted the legislature’s intent to promote workforce mobility and protect low-wage workers, requiring that any exceptions to these protections be narrowly construed.

4. Case-by-Case Basis: The reasonableness of non-compete agreements and duty of loyalty restrictions will be evaluated on a case-by-case basis, making it essential for employers to carefully consider the necessity and scope of such agreements.

Source References

• Springer v. Freedom Vans LLC, No.102566-1 (January 23, 2025)

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