This week, the Washington legislature passed a bill, HB 1155, that effectively bans workplace noncompete agreements. If signed by the governor, this new law will take effect on June 30, 2027. As of that date, all noncompete agreements inconsistent with the provisions of the bill are void and unenforceable, regardless of when the parties entered into the agreement. The bill would apply retroactively insofar as its provisions would govern any legal proceeding commenced on or after its effective date, regardless of when the claim arose.

Washington law currently allows employees and independent contractors to enter into noncompete agreements if their earnings exceed certain statutory thresholds. 

HB 1155 eliminates this income-based approach and bans noncompete agreements, regardless of earnings. It also expands the definition of prohibited noncompete agreements to ban provisions that require workers to repay or forfeit any right, benefit, or compensation for choosing to engage in a particular business or trade. Agreements between an employer and a potential or current employee requiring repayment of educational expenses remain permissible, as long as the agreement terminates within 18 months of the employee’s start date.

HB 1155 would also require employers to make reasonable efforts to notify current and former employees and independent contractors that any noncompete still technically within its effective period is void and unenforceable. Employers would be required to provide this written notification to affected employees and independent contractors by October 1, 2027.

While less drastic, HB 1155 also makes changes to what is considered a “nonsolicitation agreement.” The bill clarifies that agreements directly or indirectly prohibiting an individual from accepting or transacting business with a customer are not considered nonsolicitation agreements. Under HB 1155, employers can still require nonsolicitation agreements that prohibit employees from actively soliciting current employees and current and prospective customers, patients, and clients. Such agreements, however, must not exceed 18 months following termination of employment.

Stoel Rives will provide status updates through the World of Employment blog as HB 1155 moves through the legislative process.