Washington Supreme Court limits duty of loyalty exception to anti-moonlighting law

The Washington Supreme Court recently limited when an employer can restrict low-wage workers from moonlighting. The court ruled such agreements are presumptively invalid for low-wage workers unless they are reasonable and narrowly tailored.

Washington’s anti-moonlighting law

Since 2020, Washington has restricted employers from prohibiting their low-wage workers from moonlighting—having an additional job, supplementing their income by working for another employer, working as an independent contractor, or being self-employed. Low-wage workers are those earning less than twice the state’s minimum wage. In 2025, the threshold is $33.32 per hour—i.e., approximately $68,000 annually (assuming 2,040 hours annually).

The law doesn’t ban all anti-moonlighting agreements for low-wage workers. It allows three exceptions if the outside work (1) raises a safety issue; (2) interferes with the employer’s “reasonable and normal scheduling expectations”; or (3) alters the employee’s obligations under existing law, including “the common law duty of loyalty and laws preventing conflicts of interest and any corresponding policies addressing such obligations.”

Many employers rely on the third exception—the duty of loyalty exception—to prevent employees from working for competitors. The duty requires employees to act in their employer’s best interest and to avoid conflicts of interest. Before the recent decision, no published caselaw provided guidance on how Washington’s noncompete law related to the duty of loyalty.