On March 23, 2026, Washington Governor Bob Ferguson signed ESHB 1155 into law, enacting a near-total ban on noncompetition covenants in Washington state. Effective June 30, 2027, all noncompetition covenants are void and unenforceable, regardless of when the parties entered into the covenant.

Employers will be prohibited from enforcing, attempting to enforce, or threatening to enforce any noncompetition covenant, representing that an employee or worker is subject to one or entering into or attempting to enter into a noncompetition covenant with an employee or worker. By October 1, 2027, employers must also make reasonable efforts to provide written notice to any current or former employees and independent contractors who remain subject to a noncompetition covenant that it is void and unenforceable.

This is a significant departure from Washington’s existing framework, under which noncompetes were only prohibited for employees earning below a certain earnings threshold. The new law contains no earnings threshold. The ban applies to all employees and independent contractors, regardless of their earnings, seniority, or role.

Even employers without a Washington workforce should view this development as a reminder of the rapidly evolving noncompete landscape and consider reviewing their existing restrictive covenant agreements for compliance and alignment with emerging trends.

What Is a “Noncompetition Covenant” Banned Under the New Law?

The amended statute defines “noncompetition covenant” broadly to include “every written or oral covenant, agreement, or contract that prohibits or restrains an employee or independent contractor from engaging in a lawful profession, trade, or business of any kind,” including agreements “that directly or indirectly prohibit[] the acceptance or transaction of business with a customer.”

The new law further expands this definition to encompass:

• Forfeitures and clawbacks: Any provision that threatens, demands, requires, or otherwise effectuates that an individual return, repay, or forfeit any right, benefit, or compensation as a consequence of the individual engaging in a lawful profession, trade, or business of any kind.
  • As a result, provisions that impose financial consequences (such as repayment or forfeiture of compensation or benefits) for engaging in lawful competitive activity may now be treated as prohibited noncompetition covenants.
• Performer agreements: A covenant, agreement, or contract between a performer and a performance space, or a third party scheduling the performer for a performance space, that prohibits or restrains the performer from engaging in a lawful performance.

What Is Still Permitted?

The amended statute expressly excludes the following from the definition of noncompetition covenant—these covenants remain permissible under the new law, subject to specified conditions:

• Narrowly tailored nonsolicitation agreements: An agreement between an employer and an employee that prohibits the employee, upon termination of employment, from: (a) soliciting any employee of the employer to leave the employer; or (b) soliciting any current or prospective customer of the employer to shift business away from the employer, provided the employee established or substantially developed a direct relationship with that customer through their work for the employer. Such customer nonsolicitation restriction must expire no later than 18 months following termination of employment.
  • Critically, the statute requires that the definition of nonsolicitation agreement be narrowly construed. Agreements that directly or indirectly prohibit the acceptance or transaction of business with a customer do not qualify as nonsolicitation agreements and instead remain prohibited noncompetition covenants.
• Confidentiality agreements: Agreements prohibiting disclosure of confidential information remain permissible.
• Trade secret and invention covenants: Covenants prohibiting the use or disclosure of trade secrets or inventions are still allowed. The legislature expressly noted that businesses have more specific and effective legal means to protect intellectual property, trade secrets, and clients without the use of noncompetition covenants.
• Contracts related to the sale of a business: Covenants entered into in connection with the purchase or sale of the goodwill of a business, or the acquisition or disposition of an ownership interest, are permitted, provided that the person signing the covenant purchases, sells, acquires, or disposes of an ownership interest representing at least one percent (1%) of the business.
• Franchise agreements: Covenants entered into by a franchisee remain permissible when the franchise sale complies with RCW 19.100.020(1).
• Educational expense repayment agreements: The new law also permits written agreements requiring repayment of out-of-pocket educational expenses, provided that the agreement: (1) expires within 18 months of the employee’s start date; (2) limits repayment to the pro rata portion of the remaining 18-month period; and (3) releases the repayment obligation if the employee separates for “good cause” under RCW 50.20.050.

Enforcement: Serious Consequences for Violations

It is a violation of the statute for an employer to: (1) enforce, attempt to enforce, or threaten to enforce any noncompetition covenant against an employee or worker; (2) represent that the employee or worker is subject to a noncompetition covenant; or (3) enter into or attempt to enter into a noncompetition covenant with an employee or worker.

Upon a violation, the Attorney General may pursue all available relief on behalf of aggrieved persons. In addition, any aggrieved person may bring a private cause of action and recover the greater of actual damages or a statutory penalty of $5,000, plus reasonable attorneys’ fees, expenses, and costs.

The statute’s reach is retroactive: the enforcement provisions apply to all proceedings commenced on or after June 30, 2027, regardless of when the underlying cause of action arose. Legal proceedings commenced before June 30, 2027, however, will be governed by the prior version of Washington’s noncompete law.

What Should Washington Employers Do Now?

With the June 30, 2027, effective date approaching, Washington employers should take the following steps:

• Audit existing agreements” Identify all employees and independent contractors subject to noncompetition covenants, including any compensation agreements with clawback or forfeiture provisions that could be triggered by lawful competitive activity.
• Update onboarding and template agreements: Remove noncompetition covenants from offer letters, employment agreements, and independent contractor agreements. Ensure your templates are updated before June 30, 2027.
• Assess nonsolicitation agreements: The law continues to permit narrowly tailored nonsolicitation agreements. Confirm that your existing nonsolicitation agreements comply with the new statutory definition, including the 18-month durational limit for customer nonsolicits and the requirement that the employee have a direct relationship with the solicited customer.
• Review educational expense repayment agreements: Ensure any educational reimbursement agreements comply with the statutory safe harbor—i.e., that they expire within 18 months of the employee’s start date, provide for prorated repayment, and are waived for “good cause” separations. Agreements that do not meet these requirements should be revised before June 30, 2027.
• Prepare for the October 1, 2027, notice requirement. Employers must make reasonable efforts to provide written notice to all current employees, former employees who remain subject to a noncompetition covenant, and independent contractors that their noncompetition covenant is void and unenforceable. Employers must undertake efforts to provide this notice by October 1, 2027.

If you have any questions about these changes, please contact Kevin Koronka, Craig Kovarik, Chengzhuo Ho, Catarina Colón, or your Husch Blackwell attorney.

Written with the assistance of Eleanor Wiltanger, a summer associate in Husch Blackwell’s Kansas City office.