Washington Non-Compete Law in 2026: RCW 49.62 and the 2027 Near-Total Ban

Are non-competes enforceable in Washington? Through June 29, 2027, only in narrow cases. A non-compete is void unless the worker's annualized earnings clear the indexed threshold ($126,858.83 for employees, $317,147.09 for independent contractors in 2026), the employer gave the terms in writing no later than the worker accepted the job (or, for a covenant signed after hire, gave independent consideration), and, after a layoff, the employer pays base salary for the enforcement period. A duration over eighteen months is presumed unreasonable. Starting June 30, 2027, the answer is mostly no: ESHB 1155 voids almost all employee and contractor non-competes regardless of pay, including ones already signed.

Reviewed and corrected on 11 October 2026. This is general information, not legal advice; check the cited statute or opinion before relying on it.

Through June 29, 2027 Washington is still a threshold state. On June 30, 2027 it becomes a ban state. That two-step shift, from pay thresholds to a near-total ban, is the multi-state drafting lesson.

Chapter 49.62 RCW took effect January 1, 2020. ESHB 1155 (Chapter 149, Laws of 2026), approved March 23, 2026, takes effect June 30, 2027. A covenant signed today can be enforced for under nine months before the ban applies, and a suit filed before June 30, 2027 is still decided under the current rules (RCW 49.62.100(2)).

Employers with Washington-based workers should stop drafting employee non-competes for that population now and build the protection plan around trade secrets, narrow non-solicits, and confidentiality before the 2027 date arrives.

Every state sorts into one of five enforceability buckets; darkest is most restrictive. The map shows 2026: Washington sits in the second bucket until its ban takes effect on June 30, 2027.

Official text, as of 11 October 2026

RCW 49.62.020, in the version effective June 30, 2027 (read on the Washington Legislature's code site):

"Beginning on June 30, 2027, all noncompetition covenants are void and unenforceable regardless of when the parties entered into the noncompetition covenant."

What changed in 2026: ESHB 1155 (Chapter 149, Laws of 2026) replaced the wage-threshold rule with this ban, repealed the threshold sections (RCW 49.62.030 and 49.62.040), and added a notice duty due October 1, 2027. The code site shows both the version "effective until June 30, 2027" and the June 30, 2027 version of each amended section.

TL;DR

• Washington's RCW 49.62, effective January 1, 2020, makes a non-compete void unless the worker's annualized earnings exceed an indexed threshold. The Department of Labor and Industries set it at $126,858.83 for employees and $317,147.09 for independent contractors for 2026.
• ESHB 1155, signed by Governor Bob Ferguson on March 23, 2026, voids all noncompetition covenants from June 30, 2027, whenever they were signed. A violator owes the aggrieved person the greater of actual damages or $5,000, plus reasonable attorneys' fees, expenses and costs (RCW 49.62.080(2)). Suits filed before June 30, 2027 follow the old rules (RCW 49.62.100(2)).
• RCW 49.62.050 has voided out-of-state forum and choice-of-law terms for Washington-based workers since 2020. SB 5935 (Chapter 36, Laws of 2024, effective June 6, 2024) changed one word in that section, "and" to "or", so each ground applies on its own.
• The Washington Supreme Court's decision in David v. Freedom Vans LLC, No. 102566-1 (Wash. Jan. 23, 2025), held that the common-law duty of loyalty exception in RCW 49.62.070 is narrow and that a covenant restricting low-wage workers must be reasonable.
• For multi-state employers, treat Washington non-competes as a short-lived asset. Move protection into trade-secret programs, customer non-solicits that fit the statutory definition, and confidentiality.

The RCW 49.62 framework: current law through June 29, 2027

RCW 49.62.010 (definitions). "Earnings" means the compensation on box one of the employee's W-2 that was paid over the prior year, annualized and calculated as of the earlier of the date enforcement is sought or the date the employment ended. For independent contractors, earnings means payments reported on form 1099-MISC. The definition of "noncompetition covenant" is in subsection (4): it "includes every written or oral covenant, agreement, or contract by which an employee or independent contractor is prohibited or restrained from engaging in a lawful profession, trade, or business of any kind," and it "also includes an agreement that directly or indirectly prohibits the acceptance or transaction of business with a customer."

RCW 49.62.020(1)(b) (employee threshold). A covenant is void unless the employee's earnings from the party seeking enforcement, annualized, exceed the statutory figure. The statute states a $100,000 base that must be adjusted yearly. Under RCW 49.62.040, the Department of Labor and Industries recalculates each September 30 using the consumer price index for urban wage earners and clerical workers (CPI-W), and the new figure takes effect the next January 1.

For 2026 the figure is $126,858.83. The Department of Labor and Industries lists $120,559.99 for 2024 and $123,394.17 for 2025.

RCW 49.62.030 (independent contractors). The parallel rule for independent contractors starts from a $250,000 base, indexed the same way. For 2026 the figure is $317,147.09.

RCW 49.62.020(1)(a)(i) (pre-employment disclosure). A covenant is void unless the employer discloses its terms in writing to the prospective employee no later than the time of the initial oral or written acceptance of the offer. If the agreement becomes enforceable only later because of changes in pay, the employer must also specifically disclose that it may be enforceable in the future. A covenant first presented after the worker has accepted the offer but before employment begins fails this test. One entered into after employment begins is tested under the next paragraph instead.

RCW 49.62.020(1)(a)(ii) (mid-employment consideration). If the covenant is entered into after employment begins, it is void unless the employer provides independent consideration. The Washington Supreme Court reached the same rule in Labriola v. Pollard Group, Inc., 152 Wn.2d 828, 100 P.3d 791 (2004), where an at-will employee who signed a non-compete nearly five years into the job received no new benefit and the employer took on no new obligation; the court held continued employment did not serve as consideration on those facts.

RCW 49.62.020(1)(c) (layoff rule). If the employee is terminated in a layoff, the covenant is void unless enforcing it includes compensation equal to base salary at termination for the period of enforcement, minus pay earned in later employment during that period. Most employers asked to fund that drop the covenant.

RCW 49.62.020(2) (duration). A court or arbitrator must presume that a covenant lasting more than eighteen months after termination is unreasonable and unenforceable. The party seeking enforcement may rebut the presumption by proving, by clear and convincing evidence, that a longer duration is necessary to protect its business or goodwill. Eighteen months is a presumption line, not a cap, but a longer covenant carries a heavy burden.

RCW 49.62.050 (choice of law and forum). A provision in a covenant signed by a Washington-based employee or independent contractor is void and unenforceable if it requires adjudication outside Washington, to the extent it deprives the worker of the chapter's protections or benefits, or if it allows or requires the substantive law or choice-of-law principles of any other jurisdiction. These forum and choice-of-law bars come from the 2019 act (2019 c 299 s 6) and have applied since January 1, 2020. SB 5935 (2024) replaced the "and" between the first two grounds with "or", so each ground applies independently.

Because the statute says "Washington-based," a national template that names Delaware law or an out-of-state court does not avoid the chapter for a worker who is based in Washington.

RCW 49.62.070 (second jobs). An employer may not restrict an employee earning less than twice the applicable state minimum hourly wage from having an additional job, supplementing income with another employer, working as an independent contractor, or being self-employed. The exceptions are services that raise safety issues or interfere with the employer's reasonable and normal scheduling expectations, and subsection (2)(b) preserves the common-law duty of loyalty and conflict-of-interest rules. This is a separate, lower pay line than the .020 threshold. The Supreme Court construed the statute's protection for low-wage workers liberally and the duty-of-loyalty exception narrowly in David v. Freedom Vans LLC, No. 102566-1 (Wash. Jan. 23, 2025), discussed below.

Non-solicits and the line to non-competes. A "nonsolicitation agreement" under RCW 49.62.010(5) is one that prohibits a departing employee from soliciting (a) any employee of the employer to leave, or (b) any current customer of the employer to cease or reduce its business. Nonsolicitation agreements are outside the definition of a noncompetition covenant. A clause that bars accepting or transacting business with a customer, by contrast, is a noncompetition covenant under subsection (4). The word to watch is "any current customer": a restriction that reaches prospects, or that stops the worker from accepting a customer's business, is not within the text of the non-solicit definition.

Remedies today. If a court or arbitrator determines a covenant violates the chapter, the violator pays the aggrieved person the greater of actual damages or a $5,000 statutory penalty, plus reasonable attorneys' fees, expenses and costs (RCW 49.62.080(2)). The same payment is owed if a court or arbitrator reforms, rewrites, modifies or only partially enforces a covenant (RCW 49.62.080(3)). The attorney general may also pursue relief (RCW 49.62.080(1)).

ESHB 1155: the 2027 near-total ban

The legislature's own findings (2026 c 149 s 1) say the 2019 law "did not go far enough," that covenants suppress wages and job mobility "across all sectors," and that "even among supposed high-wage earners, the suggestion that these covenants are bargained is largely a legal fiction." ESHB 1155, signed by Governor Bob Ferguson on March 23, 2026 and effective June 30, 2027, removes the wage-threshold approach and voids noncompetition covenants outright, with narrow exceptions.

Scope. The 2027 definition in RCW 49.62.010(3) reaches written and oral covenants that prohibit or restrain a worker from engaging in a lawful profession, trade, or business; agreements that directly or indirectly prohibit accepting or transacting business with a customer; covenants between a performer and a performance space; and "any provision in an agreement that threatens, demands, requires, or otherwise effectuates that an individual return, repay, or forfeit any right, benefit, or compensation, as a consequence of the individual engaging in a lawful profession, trade, or business of any kind." That last item reaches forfeiture and clawback terms tied to competing.

Retroactivity. RCW 49.62.020(1) voids covenants "regardless of when the parties entered into" them, so agreements signed before the effective date are covered. One limit matters in practice: under RCW 49.62.100(2), legal proceedings commenced before June 30, 2027 are governed by the chapter as amended before that date. A suit filed in 2026 or early 2027 is therefore decided under the current rules, while proceedings commenced on or after June 30, 2027 follow the ban (RCW 49.62.100(1)).

Whether the retroactive voiding will draw a constitutional challenge is untested as far as we found. We did not search court dockets in this review.

What counts as a violation. From June 30, 2027 it is a violation for an employer "to enforce, attempt to enforce, or threaten to enforce" a noncompetition covenant against an employee or worker, to represent that the worker is subject to one, or to enter into or attempt to enter into one (RCW 49.62.020(2)).

Notice. By October 1, 2027, an employer must make reasonable efforts to give written notice to all current and former employees and independent contractors whose covenant is still within its effective time period, telling them it is void and unenforceable (RCW 49.62.020(3)). The statute does not say in terms that a missed notice is a violation under subsection (2). RCW 49.62.080(2) penalizes a person who "has violated this chapter," so a missed notice may be pleaded as one, but no court has addressed the point as far as we found.

Remedies. The violator must pay the aggrieved person the greater of actual damages or a $5,000 statutory penalty, plus reasonable attorneys' fees, expenses and costs (RCW 49.62.080(2)). The fee award runs to the aggrieved person.

Exceptions. The 2027 definition in RCW 49.62.010(3)(e) leaves out:

• nonsolicitation agreements, as redefined in subsection (4);
• confidentiality agreements;
• covenants prohibiting use or disclosure of trade secrets or inventions;
• a covenant entered into by a person purchasing or selling the goodwill of a business or otherwise acquiring or disposing of an ownership interest, but only if the interest is one percent or more of the business;
• franchisee covenants where the franchise sale complies with RCW 19.100.020(1); and
• a written agreement to repay out-of-pocket educational expenses that expires within 18 months of the employee's start date, limits repayment to the pro rata portion of the remaining time, and releases the employee if separation is for "good cause" under RCW 50.20.050.

The 2027 non-solicit definition in RCW 49.62.010(4) covers employees and also current or prospective customers, patients or clients, but only if the employee established or substantially developed a direct relationship with the customer through work for the employer and the restriction expires no later than 18 months after employment ends. An agreement that bars accepting or transacting business with a customer is not a non-solicitation agreement.

After June 30, 2027 the threshold sections (RCW 49.62.030 and 49.62.040) are repealed, and the statement in current RCW 49.62.090(2) that the chapter "does not revoke, modify, or impede the development of the common law" is removed from the 2027 version. The legislature's findings also state that the act does not intend to interfere with the sovereignty of tribal nations over employees working in Indian country for a tribally owned business.

Recent appellate authority

David v. Freedom Vans LLC, No. 102566-1 (Wash. Jan. 23, 2025), is the main Washington Supreme Court decision applying RCW 49.62.070. Jeremy David, a shop assistant later promoted to foundations manager, and Mark Springer, an electrician, never earned more than twice the minimum wage at Freedom Vans, a van-conversion company. Freedom Vans required all employees to sign an agreement barring them from "directly or indirectly engag[ing] in any business that competes" with the company during employment, and the workers said they turned down side work because they feared being fired or sued.

The superior court and the Court of Appeals sided with the employer, reading RCW 49.62.070(2)(b) to preserve the common-law duty of loyalty. The Supreme Court, en banc, reversed. It stated that "the legislature requires this duty to be narrowly construed" and that the statute's protections are construed liberally under RCW 49.62.110. It held that "the kinds of competition prohibited must be narrow in the context of chapter 49.62 RCW and noncompete agreements must be reasonable," and remanded to the superior court to decide whether Freedom Vans' agreement was reasonable and to assess damages and fees. Reasonableness is decided case by case, looking at the need to protect the business or goodwill, whether the restraint is reasonably necessary, and public policy.

The drafting consequence: a handbook clause that says "while employed, you may not work for any competitor" is exposed when applied to a worker paid under twice the minimum wage. Policies for hourly and below-threshold roles should rest on conflict-of-interest and confidentiality rules that fit the facts, not a blanket loyalty restriction on outside work. The opinion concerned a restriction during employment, not after it.

Inventory before the window closes

The practical work before June 30, 2027 follows from the statute.

1. Build an inventory of every Washington-based worker with a covenant: location, pay, signing date, duration, choice-of-law and forum terms.
2. Sort each covenant against today's tests: written disclosure at acceptance or independent consideration, earnings over the threshold, duration, and Washington law and forum.
3. Identify who must be notified by October 1, 2027, and draft the notice that the covenant is void and unenforceable.
4. Decide which suits, if any, are worth filing before June 30, 2027, knowing that a covenant that fails today's tests also brings the RCW 49.62.080 remedy.

Industry-specific notes

Tech. Protection after June 30, 2027 has to live elsewhere: a documented trade-secret program (access controls, document classification, exit interviews that list the materials the worker touched), a customer non-solicit that fits the statutory definition, and confidentiality agreements. The statute leaves trade-secret and confidentiality covenants outside the ban.

Healthcare. Chapter 49.62 RCW has no health-care-specific section, so physician and clinician covenants run through the general framework now and the ban after June 30, 2027. We did not search other titles of the RCW for a health-care-specific rule; check app.leg.wa.gov before relying on that.

Financial services. The Protocol for Broker Recruiting is a voluntary agreement among signatory brokerage firms, not Washington statutory law (law-firm summaries describe it this way; we did not read the protocol itself). Non-broker financial-services roles fall under the general framework and lose non-compete protection on June 30, 2027.

Choice-of-law strategy for Washington-based workers

A foreign choice-of-law clause does not solve the problem. RCW 49.62.050 voids the forum, the other-state law and any term that deprives a Washington-based worker of the chapter's protections.

The chapter does not define "Washington-based." A worker who lives and works in Washington is plainly covered. Edge cases, such as a Vancouver, Washington resident who commutes to an Oregon office, or a remote employee who reports to an out-of-state office, are unsettled in the text we read, and we did not find a case that resolves them.

The statute is keyed to the worker's being Washington-based, not to the employer's headquarters.

A national template therefore has to apply Washington's rules to any worker who may be Washington-based. After June 30, 2027 the covenant is void whatever law or forum it names.

Drafting checklist for the covenant that survives current law

A covenant signed now can be enforced for under nine months before the ban applies, and a suit filed before June 30, 2027 is decided under the current rules. The drafting question is mostly about not creating liability. The pitfalls that catch national templates:

1. Test the threshold on actual pay, not projected pay. Earnings means W-2 box 1 compensation paid over the prior year, annualized and measured as of the earlier of the date enforcement is sought or the date employment ended (RCW 49.62.010(1)). A worker who is just above $126,858.83 on base salary can fall below it in a soft year, and projections made at signing do not protect the covenant.
2. Draft non-solicits to the statutory definition. Through June 29, 2027 the statutory non-solicit definition covers only soliciting employees and current customers (RCW 49.62.010(5)). A clause that bars accepting or transacting business with a customer is a noncompetition covenant under RCW 49.62.010(4). From June 30, 2027 a non-solicit may also reach prospects with whom the employee developed a direct relationship, for up to 18 months.
3. Be careful with garden leave. Whether paid leave during employment counts as a noncompetition covenant is not addressed in the text we read. Any term that makes the worker forfeit or repay pay for competing falls inside the 2027 definition (RCW 49.62.010(3)(d)). We found no Washington authority on garden leave under the new text.
4. Do not use equity forfeiture or clawback as a non-compete proxy. The 2027 definition reaches provisions that require an individual to return, repay or forfeit a right, benefit or compensation as a consequence of engaging in a lawful profession, trade, or business. A grant that vests only if the worker does not compete is the pattern it targets. Use time-based vesting tied to continued service.
5. Keep the duration short, because reformation costs the employer. The eighteen-month presumption is the legal line, but the money risk is RCW 49.62.080(3): if a court reforms or only partly enforces a covenant, the employer owes the worker the greater of actual damages or $5,000, plus fees. A covenant that needs trimming is a liability, not a starting position.
6. Use Washington choice of law and a Washington forum. For a Washington-based worker, any other choice is void under RCW 49.62.050.
7. For mid-employment covenants, document independent consideration. A signing bonus, equity or restricted unit grant tied to the covenant, with a contemporaneous letter that names it. See RCW 49.62.020(1)(a)(ii) and Labriola.
8. Build the ESHB 1155 affected-worker list and notice template now. The covenant is void on June 30, 2027 and notice is due by October 1, 2027.

The harder work is the protection plan that replaces the covenant. An employer that spends the months before the ban on trade-secret programs, customer-relationship documentation and statute-fit non-solicits has less to unwind than one that papers more non-competes, which end June 30, 2027 void and, if enforced, carry the RCW 49.62.080 remedy.

FAQ

Are non-competes enforceable in Washington in 2026?

Only narrowly. Through June 29, 2027, a Washington non-compete is void unless the worker's earnings exceed the indexed threshold ($126,858.83 for employees, $317,147.09 for independent contractors in 2026), the employer disclosed the terms in writing by the time the worker accepted the job (or provided independent consideration if the covenant was signed after hire), and, after a layoff, the employer pays base salary for the enforcement period. A duration over eighteen months is presumed unreasonable, though the employer can rebut that with clear and convincing evidence (RCW 49.62.020).

What is the income threshold for a Washington non-compete?

For 2026, $126,858.83 for employees (RCW 49.62.020(1)(b)) and $317,147.09 for independent contractors (RCW 49.62.030). The Department of Labor and Industries adjusts both figures each year for inflation using the CPI-W (RCW 49.62.040), and the new figure takes effect January 1. The 2025 employee figure was $123,394.17.

When does Washington's non-compete ban take effect?

June 30, 2027. ESHB 1155, signed by Governor Bob Ferguson on March 23, 2026, voids all noncompetition covenants from that date (RCW 49.62.020(1), 2027 version), regardless of pay or industry, subject to the exceptions in RCW 49.62.010(3)(e).

Does Washington's 2027 ban apply to non-competes signed before the law passed?

Yes, with one limit. RCW 49.62.020(1) voids covenants "regardless of when the parties entered into" them, and employers must make reasonable efforts to notify affected current and former workers by October 1, 2027. But under RCW 49.62.100(2), legal proceedings commenced before June 30, 2027 are governed by the chapter as amended before that date, so a suit filed earlier is decided under the current rules.

Can my employer enforce a non-compete after laying me off in Washington?

Usually not without paying you. Under RCW 49.62.020(1)(c), if you were terminated in a layoff the covenant is void unless enforcing it includes pay equal to your base salary at termination for the period of enforcement, minus what you earn elsewhere in that period. After June 30, 2027 the covenant is void either way.

Does a non-compete signed with out-of-state choice of law hold up in Washington?

No. For a Washington-based worker, RCW 49.62.050 voids a covenant provision that requires adjudication outside Washington, that deprives the worker of the chapter's protections, or that applies another jurisdiction's law. The forum and choice-of-law bars have been in the statute since 2020, and SB 5935 (effective June 6, 2024) made each ground apply independently.

Are non-solicitation and confidentiality agreements still allowed in Washington?

Yes, within the statutory definitions. Confidentiality and trade-secret agreements are outside the definition of a noncompetition covenant. Employee non-solicits are allowed, and customer non-solicits are allowed in the 2027 version only where the employee established or substantially developed a direct relationship with the customer and the restriction expires within 18 months. An agreement that bars accepting or transacting business with a customer is a noncompetition covenant (RCW 49.62.010(4)).

Related reading

For the broader map, see Non-Compete Enforceability by State: A 2026 Map. For neighboring regimes, compare California's near-total ban under Section 16600 and the Texas drafting playbook. On the choice-of-law trap that voids out-of-state clauses, see Choice-of-Law Clauses That Quietly Fail. Part of our state law reference series.

For the US statutes, regulations and court rules these laws sit in, see the US primary law API.

Arshita Anand

Co-Founder & CEO · Attorney

Arshita leads product and strategy at Vaquill AI, the US primary law data API. As an attorney, she decides which law we carry, how each section is sourced and cited, and what legal AI and compliance teams need from the data.