NONCOMPETE AGREEMENTS

Noncompetition agreements are common in employment contracts, but Washington law places strict limits on how and when they can be enforced.

 If you’re an employee being asked to sign a noncompete, it is critical to understand the issues that may arise and the rules involved.

What Is a Noncompete Agreement?

A noncompete agreement is a clause or contract that restricts an employee from working for a competitor or starting a competing business for a period of time after leaving their job.

Washington law allows these agreements, but only under certain conditions. In fact, Washington has greatly restricted noncompetition agreements since 2020 by restricting their use and enforceability.

Washington’s Noncompete Laws

The applicable statute that sets forth Washington’s noncompete laws is RCW 49.62. Here’s what you need to know:

1. Income Threshold Requirement

Noncompetes are enforceable only if the employee earns more than:

• $123,394.17 per year as of 2025 (adjusted annually for inflation) in W-2 wages or equivalent earnings.
• For independent contractors, the threshold is $308,485.43 per year.

If the employee or contractor earns less than the threshold, the noncompete is void and unenforceable.

Please also note that the above dollar amounts are for 2024, and they are adjusted annually.

2. Time Limit

Noncompetition agreements lasting longer than 18 months are presumed unreasonable and unenforceable, unless the employer can prove a legitimate business need for the extended duration.

3. Advance Notice Required

Employers must:

• Disclose the noncompete before or at the time of the job offer, and
• Provide separate compensation if the noncompete is introduced after employment begins.

It is against the law for your employer to condition your continued employment by signing a noncompete after you are hired.

4. Layoff Protections

If you entered into a valid noncompete and then subsequently get laid off, the noncompete agreement is only enforceable if your employer continues to pay your base salary during the restricted period.

5. Penalties for Violations

In general, employers who violate any of the above laws may have to:

• Pay the employee $5,000 or actual damages (whichever is greater), and
• Pay your attorney’s fees and legal costs.

Please note that employees can sue to have an invalid noncompete declared void and seek damages.

What About Non-solicitation Agreements?

A non-solicitation agreement is a type of restrictive covenant where an employee agrees not to solicit a company’s clients, customers, or employees after leaving the company. Washington law permits these agreements within certain limits.

In general, non-solicitation agreements are legal in Washington provided that they are reasonable and not overbroad.

Washington courts will typically enforce a non-solicitation agreement if it:

• Protects a legitimate business interest, such as trade secrets or customer relationships,
• Is limited in scope, geography, and duration, and
• Does not function as a disguised noncompete agreement, especially if it restricts you from doing business with customers who voluntarily reach out.

If you are being asked to sign a non-solicitation agreement (or a noncompete agreement for that matter) it is a good idea to consult with an employment attorney. Your rights and protection come before your employer’s interests.

Contact Nolan Lim Law Now

At Nolan Lim Law, we advise employees on Washington’s noncompete and non-solicitation laws. Whether you need help reviewing, negotiating, or challenging these agreements, we are here to guide you.