Earlier this year, Governor Jay Inslee signed a new bill into law that severely limits the ability of employers to impose non competition requirements on their employees and independent contractors. Previously, parties were free to enter into non-competition agreements as long as they were reasonable in time and geographic scope.
Under the new law, non-competition covenants are unenforceable against employees unless:
- The employer discloses the covenant terms no later than the employment offer’s acceptance;
- There is independent consideration for a covenant entered into after the employment starts;
- The employee’s annualized earnings exceed $100,000, adjusted for inflation; and
- For a laid off employee, the employee must receive compensation equal to their base salary minus subsequent compensation earned during the non-compete enforcement period.