Washington bans non-compete agreements

On March 23, 2026, Washington Governor Bob Ferguson signed House Bill 1155 (HB 1155) into law, effectively banning nearly all non-compete agreements for employees and independent contractors in Washington. The law takes effect June 30, 2027, making Washington one of a growing number of states that prohibit these restrictive covenants.

Beginning June 30, 2027, all non-compete agreements will be void and unenforceable and entering into or attempting to enter into new non-competes with any employee or independent contractor will violate the statute. Employers will also be prohibited from enforcing, threatening to enforce, or even claiming that a worker is bound by a non-compete. This ban applies retroactively to agreements already in place if they are enforceable as of June 30, 2027.

Specified definition of “Non-Competition Covenant”

The law broadly defines what counts as a non-compete. Beyond traditional non-competes, the definition now includes:

• Agreements between performers and performance venues (or third-party schedulers) that restrict lawful performances
• Provisions that directly or indirectly prohibit a worker from accepting or doing business with customers
• Any clause requiring a worker to return, repay, or forfeit compensation or benefits as a consequence of working in a lawful profession or business

Non-solicitation agreements

The law does not ban non-solicitation agreements, but it does limit them. Non-solicitation agreements are permitted but must be “narrowly construed.” A permissible non-solicitation agreement may prohibit a former employee from:

• Soliciting co-workers to leave the employer
• Soliciting customers, clients, patients, or prospects, but only when the employee developed the relationship during employment, and only for up to 18 months after separation.

However, a permissible non-solicitation agreement may not prohibit a former employee from accepting business from customers who reach out on their own.

Exceptions to the ban

In addition to non-solicitation agreements, the sweeping ban on non-competition provisions does not apply to:

• Confidentiality, non-use, or non-disclosure provisions protecting inventions or trade secrets
• Non-competes in connection with the sale of a business or ownership interest if the seller holds more than one percent of the business
• Franchise covenants that comply with Washington franchise law (RCW 19.100.020(1))
• Training repayment agreements for out-of-pocket educational expenses, provided: (a) the agreement expires within 18 months of the employee’s start date; (b) repayment is prorated for the remaining time in that 18-month period; and (c) the obligation is waived if the employee leaves for “good cause” under RCW 50.20.050

By October 1, 2027, employers must make reasonable efforts to notify all current and former employees and independent contractors whose non-competes would otherwise still be in effect, informing them in writing that their agreements are now void and unenforceable.

For now, employers should review their existing agreements, prepare for the October 1, 2027, notice deadline, and prior to June 30, 2027, contact their McDonald Hopkins attorney to ensure compliance with this sweeping ban on non-competition agreements in Washington.