3/25/26 Washington State Bans Noncompete Agreements

March 25, 2026

On March 23, 2026, Washington Governor Bob Ferguson signed Engrossed Substitute House Bill 1155 (the “Bill”) into law. The Bill, which will go into effect on June 30, 2027, largely prohibits noncompetition agreements, further defines nonsolicitation agreements, and amends or repeals several sections of the Revised Code of Washington (“RCW”).

What Is Changing?

The Bill states that noncompete agreements limit workplace mobility by hindering competition and employees’ ability to be hired elsewhere, restraining trade and commerce, and may be considered unreasonable contracts of adhesion. For these reasons, the Bill makes all noncompetition covenants affecting any Washington-based worker or business void and unenforceable. This ban does not extend to employment contracts involving federally recognized Native tribes or their members, or to individuals purchasing or selling one percent or more of an ownership interest in a business.

The nullification applies to all noncompete contracts regardless of when they were executed; therefore, even agreements entered into prior to the effective date will be deemed void. Employers have until October 1, 2027, to make reasonable efforts to provide written notice to all employees and independent contractors that their noncompete agreements are void and unenforceable. Lawsuits filed prior to the effective date will not be subject to the new amendments.

Additionally, the Bill further clarifies what differentiates a nonsolicitation agreement from a noncompete by amending the RCW to revise their definitions. The new definitions establish clearer boundaries to help determine when a purported nonsolicitation agreement functions as a noncompete, and to identify which types of agreements will no longer be enforceable after the effective date. Nonsolicitation agreements are now more narrowly defined to target employees who attempt to divert other employees or business away from their prior employer where the relationship with the customer, patient, client, or prospect was established or developed through their employment. 

After the effective date, employees, or the Attorney General on their behalf, may bring an action against any employer that fails to comply with the Bill. A violation may result in the employer being required to pay the greater of the employee’s actual damages or a penalty of $5,000, plus attorneys’ fees to the aggrieved worker.

Implications for Employers

Although the Bill will not take effect until June 30, 2027, employers should start planning now if they use noncompetes in Washington. Early preparation may assist with compliance, including the obligation to provide written notice to all applicable employees and contractors by October 1, 2027. Failure to issue the required notices or otherwise comply with the amendments will constitute a violation of the law and may expose employers to the penalties described above.

Please contact Andrew Schpak at 503-276-2156 or aschpak@barran.com or Winslow Robinson at 503-276-2103 or wrobinson@barran.com with any questions or for assistance in determining your employment compliance.