Key Takeaways

• Washington has enacted legislation effectively banning all non-competes under Engrossed Substitute House Bill 1155 (SB 1155), which was signed into law on March 23, 2026.
• Beginning June 30, 2027, the law renders nearly every non-compete (for both employees and independent contractors), past or future, void and unenforceable, regardless of compensation level, industry or duration, with limited exceptions. 
• Employers¹ may not enforce or threaten to enforce existing non-competes against employees or independent contractors working in Washington after June 30, 2027, no matter when they were signed, and must notify current and certain former workers no later than October 1, 2027, that their non-competes are void.
• The statute permits non-solicits and confidentiality agreements, but defines them narrowly and requires careful drafting to ensure compliance.

Overview of the New Law

On March 23, 2026, Washington Governor Bob Ferguson signed Engrossed Substitute House Bill 1155 (SB 1155) into law, dramatically expanding Washington’s existing non-competition agreements (“non-compete”) restrictions and rendering all non-compete covenants void and unenforceable, regardless of income or when the agreement was entered into. The law takes effect June 30, 2027.

Near Complete Non-Compete Ban

Until now, Washington took a more limited approach, restricting non-competes for low-wage workers. In enacting SB 1155, the legislature concluded that those reforms “did not go far enough,” finding that non-competes suppressed wages and job mobility, even for high-earners. The new law, effective June 30, 2027, prohibits employers from enforcing, attempting to enforce or threatening to enforce a non-compete; representing that a worker is subject to a non-compete; or entering into or attempting to enter into any non-compete covenant with a Washington-based employee or independent contractor. In doing so, the law eliminates the prior framework that permitted non-competes for high-earning employees and independent contractors and repeals industry-specific carve-outs.

The law adopts an expansive definition of “noncompetition covenant” to include any provision that restrains someone from working. This includes provisions that directly or indirectly prohibit the acceptance of or transaction of business with a customer, as well as clauses that require an individual to repay, forfeit, or return compensation or benefits as a consequence of engaging in lawful post-employment work. The statute also includes certain agreements involving performers and performance venues or third-party schedulers.

Clarified Exceptions and Narrowed Non-Solicit Agreements

SB 1155 maintains limited exceptions for confidentiality agreements, covenants protecting trade secrets or inventions, properly structured non-solicitation (“non-solicit”) agreements, covenants entered into in connection with the sale of at least one-percent ownership interest in a business and narrowly defined agreements requiring repayment of out-of-pocket educational expenses that meet specific statutory conditions.

While non-solicits also remain permissible, the statute emphasizes they must be narrowly construed. A lawful non-solicit agreement may prohibit a departing employee, for up to 18 months following termination, from soliciting other employees to leave the employer or from soliciting customers, patients (in the case of medical providers) or clients with whom the employee had a direct relationship through their work for the employer, for the purpose of shifting business away from the employer. Importantly, any provision that directly or indirectly prohibits the acceptance of business, rather than the act of solicitation, will be treated as an unenforceable non-compete covenant.

Enforcement and Remedies

SB 1155 also significantly strengthens enforcement mechanisms. Any person aggrieved by a violation of the statute may bring a private action and recover the greater of actual damages or a statutory penalty of $5,000, as well as reasonable attorney’s fees and costs. The Washington Attorney General is also expressly authorized to enforce the statute. The amended provisions apply to all non-competes, even those entered into prior to that date, as well as legal proceedings commenced on or after the effective date.

What Employers Should Do Now

While the law does not take effect until June 30, 2027, employers with Washington-based employees or independent contractors should begin preparing and be sure to consult with counsel to help navigate the new law. Among other measures, it will be prudent to conduct an inventory of existing agreements such as employment agreements, equity and incentive plans, bonus or severance agreements, and repayment or forfeiture provisions, to identify restrictive covenants or language that may function as a non-compete under the expanded statutory definition.

Employers should also be aware of the statute’s notice requirement. By October 1, 2027, employers must make reasonable efforts to provide written notice to current employees, former employees, and current and former independent contractors whose non-competes remain within their stated duration, informing them that those provisions are void and unenforceable.

In addition, employers should consider updating form employment agreements, offer letters, and contractor agreements applicable to Washington-based workers to comply with the new law.

Finally, employers should explore lawful alternatives to non-competes, including carefully drafted confidentiality and trade-secret protection agreements, narrowly tailored non-solicits that comply with the statute and appropriate retention and incentive strategies.

Need Guidance?

Our team is available to advise on practical steps for compliance with this new law. We invite you to reach out to us if you have any questions or would like to discuss how these changes may impact your business.

^{1 SB 1155 defines “employer” as “any person, firm, corporation, partnership, business trust, legal representative, or other business entity which engages in any business, industry, profession, or activity in this state and employs one or more employees or who contracts with one or more persons, the essence of which is the personal labor of such person or persons and includes the state, counties, cities, and all municipal corporations, public corporations, political subdivisions of the state, and charitable organizations: PROVIDED, That any person, partnership, or business entity not having employees, and who is covered by the industrial insurance act must be considered both an employer and an employee.”}