This week, Washington signed a new law banning noncompete agreements, marking a significant change in how employers manage post-employment restrictions. Once the law takes effect on June 30, 2027, noncompete agreements will be unenforceable for Washington-based workers, regardless of compensation level. Employers will no longer be permitted to enter into new noncompete agreements, and existing agreements will become void as of that date. The ban is far-reaching, broadening the definition of a noncompete agreement, and includes only limited exceptions for agreements tied to the sale of at least a one percent ownership interest in a business and a narrow exception for certain educational expense repayment arrangements.
Nonsolicitation agreements are not banned by the new law, but they are more restricted. To be enforceable, nonsolicitation agreements must be limited to customers, patients, clients, or prospects with whom the employee established or substantially developed a direct relationship through their work. In addition, nonsolicitation periods are capped at 18 months. Employers may need to revise existing nonsolicitation language to ensure compliance with these new requirements.
The law also creates a new compliance obligation. By October 1, 2027, employers must make reasonable efforts to provide written notice to all current and former employees and independent contractors whose noncompete agreements are still in effect, informing them that those agreements are void and unenforceable. Employers should begin planning now for how they will identify impacted individuals and distribute the required notices.
This new legislation builds on Washington’s prior restrictions on noncompete agreements and reflects a broader shift toward limiting their use. The new law will require a reevaluation of how to protect business interests, including customer relationships, confidential information, and workforce stability.
The Employment Law Advising & Employer Defense Litigation group at Ryan Swanson is closely monitoring these developments and is available to assist with reviewing and updating employment agreements, post-employment restrictions, advising on compliant alternatives, and developing strategies to protect your business under the new law. Please contact our team with any questions or to discuss how this change may impact your organization.
