Washington Lawmakers Send Employee Noncompete Ban to Governor

Washington state is poised to ban employee noncompetes and related repayment agreements under a bill that’s headed to Gov. Bob Ferguson (D) for his signature.

The legislation (HB 1155) would replace the state’s current income-based restrictions on contracts that prevent an employee from leaving their job to go work for a competing business, adding Washington to a short list of states that prohibit nearly all noncompetes.

It also would define noncompetes to include requirements that employees repay any benefit or compensation if they take a different job or start their own business. The bill won final approval Monday, when the House approved Senate changes to its previously passed legislation.

States have served as the hub of regulation over noncompetes since courts blocked the Federal Trade Commission’s effort to ban them nationwide in 2024. The policies vary including a handful of outright state bans, several states that shield low-income or hourly workers from noncompetes, and many more that restrict the contracts for some medical professions.

An existing Washington statute declares noncompetes void and unenforceable for lower- and middle-income workers, using some of the highest thresholds among similar state laws. The current thresholds, which adjust annually based on inflation, are $126,859 for employees and $317,147 for independent contractors.

The legislation heading to Ferguson’s desk clarifies that nonsolicitation agreements are permissible, to the extent they ban employees from recruiting away their employers’ customers or other staff. Noncompetes for people selling their ownership in a business also remain enforceable.