Washington bans noncompete agreements beginning June 30, 2027

On March 23, 2026, Governor Bob Ferguson signed Engrossed Substitute House Bill (HB) 1155 into law. The new law, which takes effect June 30, 2027, bans virtually all noncompete agreements with employees and independent contractors in Washington state, with few, limited exceptions. Washington will join a growing number of states that have banned noncompetes. The limited exceptions include contracts related to the sale of a business, franchise agreements, and a few specific scenarios pertaining to nonsolicitation and private information. Washington employers will need to account for various effective dates and analyze how their employment and contracting agreements may need to change.

What is banned?

Washington law already restricts the use of noncompete agreements but allows employers to enter and enforce such agreements with high-income earners and in certain other narrow circumstances. But beginning June 30, 2027, “all noncompetition covenants [will be] void and unenforceable, regardless of when the parties entered into the noncompetition covenant.” This is significant: All existing noncompete agreements will become void regardless of when they were signed.

The current law defines a “noncompetition covenant” as an agreement “by which an employee or independent contractor is prohibited or restrained from engaging in a lawful profession, trade, or business of any kind,” including agreements “that directly or indirectly prohibit[] the acceptance or transaction of business with a customer.”