As the saying goes, another one bites the dust. As of June 30, 2027, Washington will become the latest state to ban workplace non-compete agreements. The new ban represents a significant shift in Washington's approach to post-employment restrictive covenants, moving the state from a framework that permitted non-competes subject to certain conditions to one that prohibits them outright. Employers with operations or workers in Washington should begin reviewing their existing agreements and practices now to ensure compliance well ahead of the law's effective date.

Key provisions of House Bill 1155

Specifically, House Bill 1155, which was signed into law by Governor Bob Ferguson on March 23, 2026, provides that:

• Effective as of June 30, 2027, businesses in Washington will be barred from entering into non-compete agreements with workers, regardless of pay, title, or any other factor.
• Also, as of the bill's effective date, all then-existing non-compete agreements will be deemed void and unenforceable.
• Further, on and after the effective date, employers cannot enforce, attempt to enforce, or threaten to enforce a non-compete agreement; represent that a worker is still subject to a non-compete agreement; or enter into or attempt to enter into a non-compete agreement with any worker.
• By October 1, 2027, businesses must undertake reasonable efforts to provide written notice to all current and former Washington-based employees and independent contractors whose non-compete agreement is still within its effective time period, that their agreement is void and unenforceable.

Definition of a non-compete agreement

Under HB 1155, a non-compete agreement is defined to include any written or oral covenant that prohibits or restrains an employee or an independent contractor from engaging in a lawful profession, trade, or business of any kind. The law goes on to further provide that a non-compete agreement 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."

Exclusions and carve-outs

That said, the definition of a non-compete agreement does include a few exclusions. For one thing, non-solicitation agreements, confidentiality agreements, and agreements prohibiting the use or disclosure of trade secrets or inventions all fall outside the scope of what is considered a non-compete agreement (though more below on the narrowing of the definition of non-solicitation agreements).

Additionally, consistent with other states that have implemented non-compete bans (such as California and Minnesota), HB 1155 permits non-compete agreements entered into in connection with the sale or acquisition of a business, so long as an ownership interest of at least 1% of the business is being transacted.

And finally, the law also carves out written agreements requiring repayment of out-of-pocket educational expenses, so long as the agreement expires within 18 months of the employee's start date, limits repayment to a pro rata portion of the remaining 18-month period, and releases the employee from the repayment obligation if the employee's separation is based on "good cause" under RCW 50.20.050.10.

Non-solicitation agreements

As noted, HB 1155 does still permit employers to require workers to enter into non-solicitation agreements – however, the bill narrows the permitted scope of such agreements. To that end, under the law, non-solicitation agreements will be permissible only insofar as they bar solicitation of (i) any employee of the employer or (ii) any current or prospective customer, patient, or client of the employer to shift business away from the employer "if the employee established or substantially developed a direct relationship with the customer, patient, or prospect through the employee's work for the employer."

As to prong (ii), the agreement's temporal scope also cannot exceed 18 months following the subject employee's separation from employment.

Next steps for employers

Washington's ban on non-compete agreements underscores a growing nationwide trend toward restricting or eliminating such covenants. Employers operating in Washington should act promptly to audit their existing restrictive covenant agreements, update template agreements and offer letters, and train human resources personnel on the new requirements to ensure full compliance by the June 30, 2027, effective date.