Washington State Law Non Compete Agreements

One of the central objectives of the law is to prevent competition bans from being used for low-level employees. To this end, the Act removes non-compete agreements for any employee who earns $100,000 or less per year. “I`ve heard the exact opposite from the startup community, people who say non-competitors are a big pain to be able to recruit people,” Stanford told GeekWire. “In California, non-competitors have been banned for a century, and that hasn`t hindered their tech startup world.” It is useful to set an income threshold for the use of non-competition rules. There is rarely a good reason why a low-level worker should be subject to a non-competition clause, as ESSB Senate Report 5478 states: competition bans are controversial in some quarters. Proponents believe they protect trade secrets, while many critics argue that they stifle innovation and workers` opportunities. Michael Schutzler, CEO of the Washington Technology Industry Association, said he was pleased to see “some progress in reforming non-compete rules for the benefit of workers that should not be subject to these restrictions.” Although the new law does not come into force on January 1, 2020, the wording of the law suggests that agreements entered into before the date of entry into force of the law could still become invalid and unenforceable by the retroactive application of the law. We`ll also see if this challenge goes to the ninth circuit. As we have already described in this blog, the Ninth Circle has not hesitated to apply state law, which goes against restrictive agreements. However, the ninth circle has also shown that it will apply the contractual clause when confronted with the laws of states that significantly affect the obligations of contracts.

In fact, he did so against an earlier Washington law in Continental Illinois National Bank & Trust v. Washington, D.C., 696 F.2d 692, 699 (1983) (with the conclusion that if a state law modifies pre-existing contracts, the court must report it as a breach of the contractual clause). The new non-competition clause has an answer to this problem – a mandatory “garden holiday” for employers who have been made redundant. Note: The law also provides for a 3-day period for non-competitors who refer to artists such as musicians. Senate Bill ESSB report 5478 highlights the reasons for this, noting that “in the music industry, non-compete clauses or blackout dates paralyze the ability to cobble together their livelihoods every year.” Any action or proceeding initiated after 1 January 2020 will be subject to the requirements of the new law, regardless of the date on which the non-competition agreement was concluded between the parties. Thus, unlike “new laws” passed elsewhere (such as Massachusetts), there is no “pass” for agreements signed before the new law went into effect. .

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