February 26, 2021

Volume XI, Number 57

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Washington Raises Income Thresholds for Workers Subject to Noncompetition Covenants

 

In May 2019, Washington enacted restrictions on noncompetition covenants, which we wrote about in our article, “Washington State Governor Signs Legislation Restricting Noncompetition Covenants,” and which took effect on January 1, 2020.

One of Washington’s new restrictions, contained in Chapter 49.62 of the Revised Code of Washington (RCW), prohibits “noncompetition covenants” (as defined in RCW 49.62.010) for employees earning less than $100,000 in annualized income, adjusted each year for inflation by the Washington State Department of Labor and Industries (L&I). The law similarly prohibits noncompetition covenants for independent contractors who earn less than $250,000.

As required by RCW 49.62.040, L&I on September 30 of each year must adjust for inflation the income thresholds for noncompetition covenants for employees and independent contractors. Effective January 1, 2021, the adjusted amount for employees is $101,390 (as reported in Box 1 of the federal Form W-2), and the adjusted amount for independent contractors is $253,475.

Employers may draft noncompetition covenants to become effective once a worker earns a sufficient amount to satisfy the income threshold.

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© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.National Law Review, Volume X, Number 281
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About this Author

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