What makes a Washington noncompetition covenant void before anyone reaches reasonableness?
Until June 30, 2027: a noncompetition covenant is void and unenforceable unless the employer disclosed its terms in writing to the prospective employee no later than the time of the initial oral or written acceptance of the offer of employment, and, where the covenant was entered into after employment began, unless the employer provided independent consideration for it. It is also void unless the employee's earnings from the party seeking enforcement, annualized, exceed the statutory figure of one hundred thousand dollars per year, which RCW 49.62.040 requires to be adjusted annually for inflation (so the figure in force on any given day is the statutory figure as adjusted under RCW 49.62.040, not the figure printed in the section, and is not stated here); 'earnings' is the compensation in box one of the employee's W-2 for the prior year, annualized, and for an independent contractor it is the payments reported on form 1099-MISC (this definition is in the version in force today; the June 30, 2027 text of RCW 49.62.010 carries no "Earnings" definition at all). What counts as a noncompetition covenant is defined broadly ("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", plus any agreement that "directly or indirectly prohibits the acceptance or transaction of business with a customer"), but it excludes a nonsolicitation agreement, a confidentiality agreement, a covenant against use or disclosure of trade secrets or inventions, a covenant given on the sale of business goodwill or of an ownership interest of one percent or more, and a franchisee's covenant where the franchise sale complies with RCW 19.100.020(1). A covenant is void against an employee terminated in a layoff unless enforcement includes compensation equivalent to base salary for the period of enforcement, less what the employee earns elsewhere in that period; and a duration longer than eighteen months after termination is presumed unreasonable and unenforceable, rebuttable only by clear and convincing evidence. A fourth threshold void stands apart from all of these: under RCW 49.62.050 a provision in a covenant signed by an employee or independent contractor who is Washington-based is void and unenforceable if it requires adjudication of the covenant outside this state, to the extent it deprives the worker of the protections or benefits of the chapter, or if it allows or requires the application of choice of law principles or the substantive law of any jurisdiction other than Washington state. FROM JUNE 30, 2027 the same section reads: 'all noncompetition covenants are void and unenforceable regardless of when the parties entered into the noncompetition covenant', it is a violation of the chapter to enforce, attempt to enforce, threaten to enforce or even represent the existence of one, and by October 1, 2027 an employer must make reasonable efforts to notify current and former employees and independent contractors in writing that their covenant is void. The chapter also prices a bad covenant, and names who may collect: on a violation of the chapter the attorney general may pursue any and all relief on a person's behalf, and a person aggrieved by a noncompetition covenant may bring a cause of action for the relief in subsections (2) and (3) of RCW 49.62.080. If a court or arbitrator finds a covenant violates the chapter, the violator pays the aggrieved person "the greater of his or her actual damages or a statutory penalty of five thousand dollars, plus reasonable attorneys' fees, expenses, and costs", and the same sum is owed by the party seeking enforcement whenever a court or arbitrator "reforms, rewrites, modifies, or only partially enforces" a covenant (RCW 49.62.080(2)-(3)); no action lies on a covenant signed before January 1, 2020 that is not being enforced or explicitly leveraged (49.62.080(4)). Against an independent contractor the earnings floor is two hundred fifty thousand dollars, inflation-adjusted the same way, and the duration of a covenant between a performer and a performance space, or a third party scheduling the performer for one, "must not exceed three calendar days" (RCW 49.62.030). An employee earning less than twice the applicable state minimum hourly wage may not be restricted from an additional job, from working for another employer, from working as an independent contractor or from being self-employed: subject to RCW 49.62.070(2), which withholds that protection where the specific additional services "raise issues of safety for the employee, coworkers, or the public, or interfere with the reasonable and normal scheduling expectations of the employer", and which leaves the employee's existing obligations, "including the common law duty of loyalty", untouched.
The trap
These are threshold defects, not balancing factors: a covenant that is perfectly reasonable in duration and geography is still void if the disclosure was late or the earnings floor is not met. The floor is a statutory figure that is adjusted annually for inflation, so the number in the statute text (one hundred thousand dollars) is NOT the number in force: the adjusted amounts are published by the department of labor and industries, not in the code text, so the chapter cannot tell you which figure applied on a given day (its own dates (RCW 49.62.900's "This act takes effect January 1, 2020" and RCW 49.62.100's application rules) fix which version governs, not which dollar figure). The bigger trap is the calendar: a covenant drafted today to run two or three years is planned into a regime that voids it outright on June 30, 2027, retroactively as to when it was signed, and makes attempting to enforce it a violation of the chapter. Note also what Washington does NOT treat as a noncompetition covenant: RCW 49.62.010(4) carves out nonsolicitation agreements, confidentiality agreements, covenants against use or disclosure of trade secrets or inventions, goodwill and one-percent-or-more ownership-sale covenants, and complying franchisee covenants, so the same page of a contract can survive while the noncompete on it does not. The carve-out is itself narrow: a "nonsolicitation agreement" is defined in RCW 49.62.010(5) as reaching only solicitation of the employer's employees to leave and of its CURRENT customers to cease or reduce business (until June 30, 2027, when the same definition moves to subsection (4) and reaches "any current or prospective customer, patient, or client" the employee "established or substantially developed a direct relationship with", expiring "no later than 18 months following termination"), so a clause drafted wider than that is a noncompetition covenant wearing a nonsolicitation label. The remedies section is the trap inside the trap: because RCW 49.62.080(3) charges the enforcing party the $5,000-or-actual-damages penalty plus fees whenever a court merely REFORMS or PARTIALLY enforces the covenant, an over-broad covenant that a court trims is a losing proposition for the employer even when it wins the trimmed version: draft to the floor, not to the ceiling. From June 30, 2027 the same section's remedy attaches to any violation of the chapter, including entering into or representing the existence of a covenant at all.
16 authorities
- statuteRCW 49.62.020enactment date not established
The words that state the rule
(1) A noncompetition covenant is void and unenforceable: (a)(i) Unless the employer discloses the terms of the covenant in writing to the prospective employee no later than the time of the initial oral or written acceptance of the offer of employment and, if the agreement becomes enforceable only at a later date due to changes in the employee's compensation, the employer specifically discloses that the agreement may be enforceable against the employee in the future; or (ii) If the covenant is entered into after the commencement of employment, unless the employer provides independent consideration for the covenant; (b) Unless the employee's earnings from the party seeking enforcement, when annualized, exceed one hundred thousand dollars per year. This dollar amount must be adjusted annually in accordance with RCW 49.62.040; (c) If the employee is terminated as the result of a layoff, unless enforcement of the noncompetition covenant includes compensation equivalent to the employee's base salary at the time of termination for the period of enforcement minus compensation earned through subsequent employment during the period of enforcement. (2) A court or arbitrator must presume that any noncompetition covenant with a duration exceeding eighteen months after termination of employment is unreasonable and unenforceable. A party seeking enforcement may rebut the presumption by proving by clear and convincing evidence that a duration longer than eighteen months is necessary to protect the party's business or goodwill. [ 2024 c 36 s 3; 2019 c 299 s 3.]
- statuteRCW 49.62.020enactment date not established
The words that state the rule
(1) Beginning on June 30, 2027, all noncompetition covenants are void and unenforceable regardless of when the parties entered into the noncompetition covenant. (2) It is a violation of this chapter for an employer to enforce, attempt to enforce, or threaten to enforce against an employee or worker any noncompetition covenant, to represent that the employee or worker is subject to a noncompetition covenant, or to enter into or attempt to enter into a noncompetition covenant with an employee or worker. (3) By October 1, 2027, an employer must make reasonable efforts to provide written notice to all current and former employees and independent contractors whose noncompetition covenant is still within its effective time period, that their noncompetition covenant is void and unenforceable. [ 2026 c 149 s 4; 2024 c 36 s 3; 2019 c 299 s 3.]
- statuteRCW 49.62.040enactment date not established
The words that state the rule
The dollar amounts specified in RCW 49.62.020 and 49.62.030 must be adjusted annually for inflation. Annually on September 30th the department of labor and industries must adjust the dollar amounts specified in this section by calculating to the nearest cent using the consumer price index for urban wage earners and clerical workers, CPI-W, or a successor index, for the twelve months prior to each September 1st as calculated by the United States department of labor. The adjusted dollar amount calculated under this section takes effect on the following January 1st. [ 2019 c 299 s 5.]
- statuteRCW 49.62.010enactment date not established
The words that state the rule
(1) "Earnings" means the compensation reflected on box one of the employee's United States internal revenue service form W-2 that is paid to an employee over the prior year, or portion thereof for which the employee was employed, annualized and calculated as of the earlier of the date enforcement of the noncompetition covenant is sought or the date of separation from employment. "Earnings" also means payments reported on internal revenue service form 1099-MISC for independent contractors.
- statuteRCW 49.62.010enactment date not established
The words that state the rule
(4) "Noncompetition covenant" 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. A "noncompetition covenant" also includes an agreement that directly or indirectly prohibits the acceptance or transaction of business with a customer. A "noncompetition covenant" does not include: (a) A nonsolicitation agreement; (b) a confidentiality agreement; (c) a covenant prohibiting use or disclosure of trade secrets or inventions; (d) 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 person signing the covenant purchases, sells, acquires, or disposes of an interest representing one percent or more of the business; or (e) a covenant entered into by a franchisee when the franchise sale complies with RCW 19.100.020(1). (5) "Nonsolicitation agreement" means an agreement between an employer and employee that prohibits solicitation by an employee, upon termination of employment: (a) Of any employee of the employer to leave the employer; or (b) of any current customer of the employer to cease or reduce the extent to which it is doing business with the employer. (6) "Party seeking enforcement" means the named plaintiff or claimant in a proceeding to enforce a noncompetition covenant or the defendant in an action for declaratory relief. [ 2024 c 36 s 2; 2019 c 299 s 2.]
- statuteRCW 49.62.080enactment date not established
The words that state the rule
(1) Upon a violation of this chapter, the attorney general, on behalf of a person or persons, may pursue any and all relief. A person aggrieved by a noncompetition covenant may bring a cause of action to pursue any and all relief provided for in subsections (2) and (3) of this section. (2) If a court or arbitrator determines that a noncompetition covenant violates this chapter, the violator must pay the aggrieved person the greater of his or her actual damages or a statutory penalty of five thousand dollars, plus reasonable attorneys' fees, expenses, and costs incurred in the proceeding. (3) If a court or arbitrator reforms, rewrites, modifies, or only partially enforces any noncompetition covenant, the party seeking enforcement must pay the aggrieved person the greater of his or her actual damages or a statutory penalty of five thousand dollars, plus reasonable attorneys' fees, expenses, and costs incurred in the proceeding. (4) A cause of action may not be brought regarding a noncompetition covenant signed prior to January 1, 2020, if the noncompetition covenant is not being enforced or explicitly leveraged. [ 2024 c 36 s 5; 2019 c 299 s 9.]
- statuteRCW 49.62.080enactment date not established
The words that state the rule
(1) Upon a violation of this chapter, the attorney general, on behalf of a person or persons, may pursue any and all relief. A person aggrieved by a violation of this chapter may bring a cause of action to pursue any and all relief provided for in subsection (2) of this section. (2) If a court or arbitrator determines that a person has violated this chapter, the violator must pay the aggrieved person the greater of his or her actual damages or a statutory penalty of five thousand dollars, plus reasonable attorneys' fees, expenses, and costs incurred in the proceeding. [ 2026 c 149 s 5; 2024 c 36 s 5; 2019 c 299 s 9.]
- statuteRCW 49.62.030enactment date not established
The words that state the rule
(1) A noncompetition covenant is void and unenforceable against an independent contractor unless the independent contractor's earnings from the party seeking enforcement exceed two hundred fifty thousand dollars per year. This dollar amount must be adjusted annually in accordance with RCW 49.62.040. (2) The duration of a noncompetition covenant between a performer and a performance space, or a third party scheduling the performer for a performance space, must not exceed three calendar days. [ 2019 c 299 s 4.]
- statuteRCW 49.62.070enactment date not established
The words that state the rule
(1) Subject to subsection (2) of this section, an employer may not restrict, restrain, or prohibit an employee earning less than twice the applicable state minimum hourly wage from having an additional job, supplementing their income by working for another employer, working as an independent contractor, or being self-employed. (2)(a) This section shall not apply to any such additional services when the specific services to be offered by the employee raise issues of safety for the employee, coworkers, or the public, or interfere with the reasonable and normal scheduling expectations of the employer. (b) This section does not alter the obligations of an employee to an employer under existing law, including the common law duty of loyalty and laws preventing conflicts of interest and any corresponding policies addressing such obligations. [ 2019 c 299 s 8.]
- statuteRCW 49.62.100enactment date not established
The words that state the rule
This chapter applies to all proceedings commenced on or after January 1, 2020, regardless of when the cause of action arose. To this extent, this chapter applies retroactively, but in all other respects it applies prospectively. [ 2019 c 299 s 11.]
- statuteRCW 49.62.100enactment date not established
The words that state the rule
(1) RCW 49.62.010, 49.62.020, 49.62.080, and 49.62.090 apply to all proceedings commenced on or after June 30, 2027, regardless of when the cause of action arose. (2) Legal proceedings commenced before June 30, 2027, will be governed by this chapter as amended prior to June 30, 2027. [ 2026 c 149 s 7; 2019 c 299 s 11.]
- statuteRCW 49.62.900enactment date not established
The words that state the rule
This act takes effect January 1, 2020. [ 2019 c 299 s 13.]
- statuteRCW 49.62.005enactment date not established
The words that state the rule
Effective date—2026 c 149: "This act takes effect June 30, 2027." [ 2026 c 149 s 9.]
- statuteRCW 49.62.005enactment date not established
The words that state the rule
(3) The provisions in this chapter facilitating workforce mobility and protecting employees and independent contractors need to be liberally construed and exceptions narrowly construed. [ 2024 c 36 s 1; 2019 c 299 s 1.]
- statuteRCW 49.62.050enactment date not established
The words that state the rule
A provision in a noncompetition covenant signed by an employee or independent contractor who is Washington-based is void and unenforceable: (1) If the covenant requires the employee or independent contractor to adjudicate a noncompetition covenant outside of this state; (2) To the extent it deprives the employee or independent contractor of the protections or benefits of this chapter; or (3) If it allows or requires the application of choice of law principles or the substantive law of any jurisdiction other than Washington state. [ 2024 c 36 s 4; 2019 c 299 s 6.]
- statuteRCW 49.62.010enactment date not established
The words that state the rule
(3)(a) "Noncompetition covenant" includes every written or oral covenant, agreement, or contract that prohibits or restrains an employee or independent contractor from engaging in a lawful profession, trade, or business of any kind. (b) "A noncompetition covenant" also includes a covenant, agreement, or contract between a performer and a performance space, or a third party scheduling the performer for a performance space, that prohibits or restrains the performer from engaging in a lawful performance. (c) A "noncompetition covenant" also includes an agreement that directly or indirectly prohibits the acceptance or transaction of business with a customer. (d) A "noncompetition covenant" also includes 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. (e) A "noncompetition covenant" does not include: (i) A nonsolicitation agreement; (ii) a confidentiality agreement; (iii) a covenant prohibiting use or disclosure of trade secrets or inventions; (iv) 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 person signing the covenant purchases, sells, acquires, or disposes of an ownership interest representing one percent or more of the business; (v) a covenant entered into by a franchisee when the franchise sale complies with RCW 19.100.020(1); or (vi) a written agreement to repay out-of-pocket educational expenses if the agreement: (A) Expires within 18 months of the employee's start date for employment; (B) limits repayment to the pro rata portion of the remaining time of the 18-month period; and (C) releases the employee from the obligation to repay if the employee's separation from employment is based on "good cause" under RCW 50.20.050. (4) "Nonsolicitation agreement" means an agreement between an employer and employee that prohibits solicitation by an employee, upon termination of employment: (a) Of any employee of the employer to leave the employer; or (b) of any current or prospective customer, patient, or client of the employer to shift business away from *with [((with))] the employer if the employee established or substantially developed a direct relationship with the customer, patient, client, or prospect through the employee's work for the employer and the prohibition expires no later than 18 months following termination of employment. An agreement that directly or indirectly prohibits the acceptance or transaction of business with a customer, patient, or client is not a "nonsolicitation agreement." (5) "Party seeking enforcement" means the named plaintiff or claimant in a proceeding to enforce a noncompetition covenant or the defendant in an action for declaratory relief. [ 2026 c 149 s 3; 2024 c 36 s 2; 2019 c 299 s 2.]
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.