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Five Fast Facts about Washington’s New Noncompetition Law

On May 8, 2019, Washington Governor Jay Inslee signed into law a bill that prohibits employers from entering into noncompetition covenants with employees whose W-2 earnings are less than $100,000, and with independent contractors paid less than $250,000 per year.

In addition to the above, employers should be aware of the following five provisions in the new law:

  • The law creates a presumption that any covenant longer than 18 months is unreasonable and unenforceable as a matter of law.  A party to the covenant may rebut the presumption by showing through clear and convincing evidence that a duration longer than 18 months is necessary to protect the party’s business or goodwill.

  • A covenant will be unenforceable unless the employer discloses its terms to a prospective employee in writing.

  • If a covenant is entered into after employment begins, the employer must provide consideration in addition to employment to support the covenant.

  • If an employee subject to a noncompetition covenant is terminated in a layoff, the covenant is void unless the employer pays the terminated employee base salary for the remainder of the covenant’s terms, less compensation earned through subsequent employment.

  • If a court determines a noncompetition covenant violates the new law, the party seeking enforcement must pay the aggrieved person the greater of the actual damages or $5,000, plus reasonable attorneys’ fees and costs.

The new law will take effect January 1, 2020.  Employers with questions regarding Washington’s new law – or that wish to review or implement noncompetition covenants – would do well to consult with competent counsel.

© Polsinelli PC, Polsinelli LLP in California

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About this Author

Cary Burke, Polsinelli PC, Atlanta, Workplace Regulation Lawyer, Employment Compliance Attorney
Associate

Cary Burke takes pride in bringing an assertive and strategic brand of representation to clients as a member of Polsinelli's employment litigation team. He partners with employers to address employment-related problems ranging from the day-to-day questions to workplace investigations employers may face in an increasingly regulated workplace. Cary's practice focuses on assisting employers in litigating claims involving trade secrets, restrictive covenants, and tortious interference. Cary also has litigated issues arising under the Civil Rights Statutes and the National...

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