Washington Governor Jay Inslee Signed Bill Wednesday that Substantially Reforms Washington State’s Approach to Noncompetition Covenants
May 8, 2019
Washington Governor Jay Inslee signed a bill today that substantially reforms Washington State’s approach to noncompetition covenants. The new law, Engrossed Substitute House Bill 1450, becomes effective on January 1, 2020.
The bill was sponsored in the House by Representative Derek Stanford and in the Senate by Senator Marko Liias. The legislators were troubled by the increasing use of noncompetition covenants and the breadth of covenants signed by employees and independent contractors. Thus, the new law begins with a finding that workforce mobility is important to economic growth.
The law outlaws various practices the legislature deemed to be unfair or unreasonable and applies to employers, employees, and independent contractors.
- If an employee earns less than $100,000 annually yet signs a noncompetition covenant, the covenant is unenforceable.
- If an independent contractor earns less than $250,000 annually, yet signs a noncompetition covenant, the covenant is unenforceable.
- Regardless of an individual’s earnings, noncompetition covenants longer than eighteen months are presumed unreasonable.
- If an employer tries to enforce an overly broad noncompete and the court rewrites it, the ex-employee receives a $5,000 statutory penalty plus his or her attorney fees.
- The ability of low wage workers to hold a second job is better protected and fast food and other franchise workers are protected from prohibitions on being hired by other franchisees.
Attorney Lawrence Cock at Corr Cronin law firm worked on this bill over the span of the last four years. “All employers who use noncompetition covenants with Washington based employees will need to scrutinize their agreements and effectuate needed changes before January 1, 2020.”
Corr Cronin is recognized as one of the premier trial law firms in the Pacific Northwest and offers sophisticated litigation strategies in a full range of practice areas. To learn more about our firm and the bill visit us at www.corrcronin.com or contact Lawrence Cock at (206) 812–0836 or by email at firstname.lastname@example.org.