Washington Bans Non-Competes

Washington has enacted one of the most sweeping non‑compete bans in the United States, joining a growing list of states that have declared most non‑competition covenants void and unenforceable. On March 23, 2026, Governor Ferguson signed Engrossed Substitute House Bill 1155, which eliminates the use of non‑compete agreements for virtually all workers in Washington. The law takes effect June 30, 2027, and applies retroactively, meaning existing non‑competes will also become void on that date.

For companies with workers in Washington, this marks a major shift as Washington previously allowed non‑competes for higher‑earning workers under strict conditions.

What the New Law Covers

Washington defines a non‑compete broadly. Under the new statute, a non‑compete includes any agreement that restricts a worker from:

• Engaging in a lawful profession, trade, or business
• Accepting work with a competitor
• Conducting business with a customer or client
• Retaining compensation or benefits unless they refrain from competitive activity

This definition is intentionally expansive. Many provisions that companies previously viewed as “safe” restrictive covenants may now be treated as prohibited non‑competes.

What Remains Permissible

Washington did preserve a few limited tools that companies can still rely on, even as most non‑competes become unenforceable. However, these exceptions are narrow and come with strict conditions.

• Non‑solicitation agreements remain allowed, but only for active solicitation. Companies may restrict a departing worker from poaching colleagues or encouraging customers to leave, but they cannot prohibit the worker from accepting business from a customer who reaches out independently. Any customer‑related restriction must be tied to relationships the worker actually developed and must end within eighteen months.
• Confidentiality, trade secret, and invention assignment agreements are still enforceable and will become increasingly important as companies shift away from traditional non‑competes.
• Sale‑of‑business non‑competes are permitted only when the individual signing the agreement owns or is selling at least one percent of the business.
• Franchise‑related restrictions continue to be governed by franchise law and remain unaffected by the new ban.
• Educational expense repayment agreements are allowed if the repayment period ends within eighteen months, the amount is prorated, and the worker is released from repayment when separating for “good cause.”

These allowable restrictions are far more limited than traditional non‑competes. Companies will need to rely on carefully tailored agreements that protect legitimate business interests without violating Washington’s new restrictions.

New Obligations for Companies

Beginning June 30, 2027, companies may not:

• Enter into new non‑compete agreements
• Enforce or attempt to enforce an existing non‑compete
• Suggest to a worker that they are bound by a non‑compete

One of the most consequential aspects of the law is its retroactive effect. All existing non‑compete agreements, regardless of when they were signed, become void on June 30, 2027. The only exception applies to legal actions already underway before that date.

Additionally, companies must make reasonable efforts to provide written notice to all current and former workers with non‑competes by October 1, 2027, informing them that their agreement is now void. Failure to send this notice is itself a violation.

Penalties for Violations

Washington’s penalties for non-compliance are substantial. A company that violates the law must pay the affected worker either actual damages or a statutory penalty of $5,000, whichever is greater, along with attorneys’ fees and costs. Both workers and the Washington Attorney General may bring enforcement actions.

How to Prepare—and How TCWGlobal Can Help

Companies should begin preparing to comply with these requirements now. This includes reviewing existing agreements to identify any provisions that may be considered non‑competes under the new broad definition, updating related verbiage disclosed to workers at the time of onboarding, strengthening confidentiality and trade secret protections, and having the proper workflows in place to ensure the October 2027 notice is sent out in a timely manner.

Washington’s move reflects a broader national trend. Several states have already enacted full bans, while others have adopted wage‑threshold restrictions or narrow exceptions. As these laws continue to evolve, businesses face increasing compliance complexity, especially when managing workers across multiple states or operating internationally. That’s where TCWGlobal’s services become invaluable.

We help companies maintain compliance within a constantly changing legal landscape, manage required notices, and reduce administrative burden. Washington’s new law is one of the most stringent in the country, but you don’t have to navigate it alone.

For more information on the various non‑compete rules across the U.S., check out our State‑by‑State Non‑Compete Resource.