April 15, 2026 | Posted By: Emma Doull
Noncompete agreements are under siege across the country, and Washington State just became the latest state to ban them almost entirely. On March 23, 2026, Washington Governor Bob Ferguson signed Engrossed Substitute House Bill 1155 into law. When it takes effect on June 30, 2027, nearly all noncompetition covenants in Washington will be void and unenforceable, regardless of when they were signed.
Even if your business is not based in Washington, this law matters. It is part of a rapidly accelerating national trend that is reshaping how employers can protect their competitive interests. If you have employees in multiple states, or if you rely on noncompetes as a standard part of your hiring and separation practices, now is the time to take a hard look at your approach.
Where Washington Already Stood
Washington was not starting from scratch. In 2019, the state passed legislation limiting noncompete agreements to workers earning more than $100,000 annually. That law was already among the more restrictive in the country. ESHB 1155 goes the rest of the way, eliminating noncompetes for virtually all workers regardless of compensation level and making the prohibition retroactive. Agreements already in place will become unenforceable on the effective date.
What the New Law Covers
The statute defines “noncompetition covenant” broadly, and employers should not assume that creative contract drafting will allow them to sidestep the prohibition. The definition covers any provision that threatens, demands, or requires an individual to return, repay, or forfeit any right, benefit, or compensation as a consequence of engaging in a lawful profession, trade, or business. That language is designed to capture clawback provisions and forfeiture clauses that function like noncompetes, even if they are not labeled as such.
The law also reaches two categories that employers may not have considered. First, contracts between performers and performance venues, or third-party scheduling intermediaries, that prevent performers from working elsewhere are covered. Second, and importantly for many businesses, any agreement that directly or indirectly prohibits accepting or transacting business with a customer is treated as a noncompetition covenant under this law and is therefore banned. That second point has significant implications for how customer non-solicitation agreements are drafted going forward.
Compliance Obligations and Penalties
The law does not simply make future noncompetes unenforceable. It also imposes affirmative obligations on employers regarding existing agreements. By October 1, 2027, employers must make reasonable efforts to provide written notice to current employees, former employees, and independent contractors who were subject to a noncompetition covenant, informing them that the covenant is void and unenforceable.
The penalties for noncompliance are real. The law creates a private right of action allowing anyone aggrieved by a violation to recover the greater of their actual damages or a $5,000 statutory penalty, plus attorneys’ fees and costs. The statute applies to proceedings commenced on or after the effective date, regardless of when the underlying conduct occurred. That means attempting to enforce an existing noncompete after June 30, 2027, or even representing to an employee that they remain bound by one, could expose an employer to liability.
What Employers Can Still Use
Understanding what survives is just as important as understanding what does not.
Confidentiality agreements remain fully enforceable. Employers can still protect genuinely confidential business information and trade secrets through properly drafted agreements, and those protections are not affected by this legislation.
Nonsolicitation agreements are still permitted under the new law, subject to new limits. Post-termination nonsolicits are capped at 18 months and may only prohibit two things: soliciting current employees to leave the company, and soliciting current customers to stop or reduce doing business with the employer. Critically, an agreement that goes further and prohibits a former employee from accepting business from a customer, rather than merely soliciting that customer, is treated as a prohibited noncompete. That is a meaningful distinction that will require careful attention in drafting.
Covenants entered into in connection with the sale of a business are also preserved, provided the seller holds at least a one-percent ownership interest. Franchise agreements and invention assignment provisions similarly survive.
The Bigger Picture for Employers Nationwide
Washington is not an outlier. California has banned noncompetes for decades. Minnesota, Colorado, North Dakota, and Oklahoma have all enacted similar restrictions in recent years. The Federal Trade Commission attempted to enact a nationwide ban on noncompetes in 2024, but the rule was struck down by a federal court. However, the regulatory appetite for restricting these agreements has not disappeared, and state-level momentum continues to build.
For employers with multi-state workforces, this patchwork of laws creates real complexity. An agreement that is perfectly enforceable in Florida may be void in Washington or California. National employers need to think carefully about which state’s law applies to each worker and whether their standard agreement templates are tailored accordingly.
Even in states where noncompetes remain enforceable, the law is clear. Courts and legislatures are increasingly skeptical of broad restrictions on workers’ ability to earn a living. Employers who continue to rely on boilerplate noncompetes without regularly reviewing them for enforceability are taking on unnecessary risk.
What Employers Should Do Now
Whether you have employees in Washington or not, this is a good moment to reassess your restrictive covenant strategy. Here are the questions every employer should be asking:
Are your noncompete agreements tailored to the specific state law that applies to each worker? A one-size-fits-all template is a recipe for unenforceability in today’s legal environment.
Are you relying on noncompetes when other tools would serve you better? Trade secret protections, well-drafted confidentiality agreements, customer non-solicitation provisions within current legal limits, and garden leave arrangements can all serve important protective functions without the legal vulnerability that noncompetes increasingly carry.
Do your HR teams and managers understand the current limits on restrictive covenants? Misrepresenting the enforceability of an agreement, even informally during an exit conversation, can expose you to liability.
For employers navigating noncompete agreements and other restrictive covenants, the stakes are too high to rely on outdated templates or assumptions. The law is changing fast, and a proactive review now can prevent costly disputes later. Hoyer Law Group’s HR consulting services can help employers build a comprehensive approach that protects legitimate business interests while staying ahead of the evolving legal landscape.
Contact Hoyer Law Group
If your business uses noncompete agreements, now is the time to review your approach. Contact Hoyer Law Group for a confidential evaluation or call us at (844) 531-0082.
This blog is for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please consult a qualified attorney.