How Washington’s New Non-Compete Law Is Wearing after Three More Years of Mileage

How Washington’s New Non-Compete Law Is Wearing after Three More Years of Mileage

By Paul Beattie & Konrad Beattie

In Spring of 2019, Washington legislators proposed a bill fundamentally changing Washington non-compete law. On January 1, 2020 the new noncompete law came into effect replacing the earlier law, which is based on Washington common law. The new law has now been in effect for four years and it is time to assess how the new law is wearing.

The essence of the substantive change to the law was to make it more expensive and even risky to enforce a non-compete clause against an employee. Non-compete enforcement actions may not be brought against employees whose annual income with that employer is below, or equal to, one hundred thousand dollars per year.

Importantly, an employee’s annualized income with respect to its employer is readjusted each year to accommodate cost of living changes, so, an employee’s annual income against its employer should actually increase each year making it a classic moving target.

A couple more practice tips are worth keeping in mind. First, the new law does specifically allow non-solicitation clauses against the employee explicitly. Thus, while an employer may not be allowed to bring a non-compete clause against a particular employee, it can usually impose a non-solicitation clause prohibiting, for example, the employee from stealing clients or customers from the employer. That remains a viable remedy.

Nondisclosure agreements and IP confidentiality agreements can also provide additional tools for the employer. There thus remain a significant collection of tools in the employer toolbox. Learning to use a variety of such tools can help you craft a successful practice area.