The Changing Future of Non-Compete Agreements in Washington

In Washington, many employers use non-compete agreements to protect their businesses.  While Washington courts have always imposed limits on their validity, they are frequently enforced by the courts.  In Olympia, there are two bills currently under consideration that would impose further restrictions on the use of non-competes in Washington.

House Bill 2406 would amend the current statute to specify that non-competes are void and unenforceable against employees who work 1) as a hair designer, barber, manicurist, or esthetician, as defined by statute, 2) as a drywall applicator, 3) as a musician, or 4) in a fast-food establishment.  The House Committee on Labor & Workplace Standards held a public hearing on the proposed bill on February 1, 2016.  The proposed bill received a do pass and the majority report was signed by five members of the committee.  On February 5, 2016, the bill was passed to the Rules Committee for review.

House Bill 2931 is significantly broader and specifies that non-competes are void and unenforceable against employees who are 1) temporary or seasonal employees, or 2) who are terminated without just cause or laid off by action of the employer.  The proposed bill would also consider non-competes involving independent contractors to be unreasonable and void and unenforceable as a matter of law.  Finally, the proposed bill creates a rebuttable presumption that a non-compete is unreasonable, void and unenforceable if its duration is for more than one year or the employee is not an executive employee, as defined by statute.  The House Committee on Labor & Workplace Standards held a public hearing on the proposed bill on February 1, 2016.  The proposed bill received a do pass and the majority report was signed by four members of the committee.  On February 5, 2016, the bill was passed to the Rules Committee for review.

If you have questions about how either of these proposed bills may impact your business, please contact Holmquist & Gardiner, PLLC to discuss further.