December 3, 2021

Volume XI, Number 337

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December 03, 2021

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December 02, 2021

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December 01, 2021

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Washington Raises Income Thresholds for Employees, Contractors Subject to Noncompetition Covenants Nearly 6 Percent for 2022

In May 2019, Washington State enacted restrictions on the enforceability of noncompetition covenants. The law, which took effect on January 1, 2020, requires the state to annually adjust the income thresholds for workers who are subject to noncompetition covenants.

The noncompetition law, codified under Chapter 49.62 of the Revised Code of Washington (RCW), prohibits “noncompetition covenants” with Washington-based employees and independent contractors who earn less than a certain amount adjusted annually for inflation by the Washington State Department of Labor and Industries (L&I) on September 30 of each year. Currently, employers may not enter into noncompetition covenants with employees who earn less than $101,390 in annualized income or with independent contractors who earn less than $253,475.

Effective January 1, 2022, the adjusted amount for employees in 2022 will be $107,301.04 (as reported in Box 1 of the federal Form W-2) and the adjusted amount for independent contractors in 2022 will be $268,252.59. L&I’s adjusted amounts are calculated based on the federal Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which calculated a 5.83 percent increase in the CPI-W. Employers may want to draft noncompetition covenants to become effective once a worker’s annualized earnings satisfy the income threshold.

© 2021, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.National Law Review, Volume XI, Number 295
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About this Author

Adam Pankratz, Ogletree Deakins Law Firm, Labor and Employment Litigation Attorney
Shareholder

Mr. Pankratz represents corporations and management in a myriad of employment-related and complex commercial matters, including litigation involving discrimination, retaliation, harassment, wage and hour, wrongful termination, ADA and FMLA leave issues, and other matters in state and federal courts and administrative agencies. Mr. Pankratz has experience successfully representing employers in executive termination, non-compete and unfair competition disputes.  Mr. Pankratz has extensive experience representing employers both locally and nationally on various employment...

206-693-7053
Associate

Kyle is an advisor and employment litigator in Ogletree Deakins' Seattle office. He represents employers in state and federal courts, as well as before administrative agencies.

Kyle has experience handling employers against alleged claims for discrimination, harassment, retaliation, constructive discharge, and wrongful termination. 

Kyle also has experience in employee non-compete, non-disclosure, non-solicitation, and misappropriation of trade secret claims. Prior to joining Ogletree Deakins, Kyle practiced at a...

206-693-7057
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