Effective June 30, 2027, virtually all noncompetion agreements with Washington‑based workers will be void and unenforceable, regardless of compensation level or when the agreement was signed. Employers have until October 1, 2027, to provide written notice to any current or former employees or independent contractors who previously signed a noncompetition agreement that is still within its effective time period, informing them that those provisions are no longer valid or enforceable.

Overview of the New Law

On March 23, 2026, Governor Bob Ferguson signed House Bill 1155, significantly expanding existing restrictions on noncompetition covenants and turning the statute into a near-categorical ban on noncompetes. The new law represents one of the most sweeping state‑level prohibitions on noncompetes in the country and requires employers to reassess a wide range of employment and independent contractor agreements, regardless of when they were signed.

Elimination of High‑Earner Exceptions. Prior law allowed noncompetition agreements for workers whose compensation exceeded thresholds set annually by the Washington Department of Labor & Industries (currently $126,858.83 for employees and $317,147.09 for independent contractors). H.B. 1155 removes these thresholds, prohibiting noncompetes for all Washington‑based workers, regardless of income.

Retroactive Invalidation of Existing Agreements. The statute expressly voids noncompetition covenants regardless of when they were signed, meaning that employers may no longer rely on existing agreements.

Expanded Definition of “Noncompetition Covenant.” H.B. 1155 broadens what qualifies as a prohibited noncompete. In addition to traditional post‑employment restrictions, the law now bans provisions that threaten, demand, require, or otherwise effectuate 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. This expanded definition reaches certain repayment, forfeiture, or clawback provisions that operate as de facto restraints on competition.

Customer Nonsolicitation Agreements Are Narrowly Construed. While customer nonsolicitation agreements remain enforceable, H.B. 1155 further limits their scope and imposes an 18-month temporal restriction. Nonsolicitation provisions must focus on current or prospective customer, patient, or client relationships that the employee established or substantially developed for the employer.

Application to Performers and Venues. The prohibition expressly applies to agreements between performers and venues or scheduling entities, extending the law’s reach beyond conventional employment relationships.

New Carveout for Repayment of Educational Expenses. The bill adds a new carveout for written agreements requiring an employee to repay out-of-pocket educational expenses if the agreement expires within 18 months of the employee’s start date, limits repayment to the pro rata portion of the remaining time of the 18-month period, and releases the employee from the obligation to repay if the employee’s separation is based on “good cause.”

What the Law Does Not Prohibit

As discussed above, customer nonsolicitation agreements remain enforceable, provided that they apply only to customers, patients, or clients with whom the worker had a direct relationship and do not exceed 18 months following the end of employment. Employee nonsolicitation agreements and confidentiality agreements likewise remain enforceable.

Noncompetition covenants entered into in connection with a person purchasing or selling the goodwill of a business or otherwise acquiring or disposing of an ownership interest remain valid, provided that the person signing the covenant purchases, sells, acquires, or disposes of an ownership interest representing 1% or more of the business.

Notice Requirement

Employers have until October 1, 2027, to provide written notice to any current or former employees or independent contractors who previously signed noncompetition agreements, informing them that those provisions are no longer valid or enforceable.

Increased Class Action Exposure

Washington law imposes statutory penalties of $5,000 per aggrieved employee or independent contractor, plus reasonable attorneys’ fees, costs, and potential injunctive relief for violations. Because liability is assessed on a per‑worker basis, employers with standardized agreements face significant class action risk, even if the noncompetition provision was never enforced or caused actual harm. These claims are already a popular claim in class action lawsuits in Washington, and H.B. 1155 is expected to accelerate filings.

What Employers Should Do Now

Washington employers—and out‑of‑state employers with Washington‑based workers—should take proactive steps to prepare for compliance:

  • Review existing agreements to identify noncompetition, forfeiture, repayment, or clawback provisions that may now be unenforceable. This includes reviewing confidentiality and nonsolicitation agreements, as well as employment policies, such as those contained in the employee handbook.
  • Revise template agreements and policies to remove prohibited language for Washington‑based workers.
  • Evaluate alternative protections, including confidentiality, trade secret, and narrowly tailored nonsolicitation provisions.
  • Plan for required notice to affected current and former workers ahead of the October 1, 2027 deadline.
  • Train HR and management teams on the new limitations to avoid inadvertent violations.