OLYMPIA, Wash. — Legislation that seeks to protect employees from unfair non-compete agreements will go into effect starting Jan. 1.
Non-compete agreements are a contract between an employee and an employer where the employee agrees not to enter into professions or markets that are in direct competition with their employer. These agreements can apply during employment and even years after.
A central goal of House Bill 1450 is to prevent non-competes from being used for low-level employees. These agreements would be void for employees making less than $100,000.
"Workforce mobility is important to economic growth and development and agreements limiting competition or hiring may be contracts of adhesion that may be unreasonable. Addresses restraints, including non-competition covenants, on persons engaging in lawful professions, trades, or businesses," the legislation reads.
Earlier this year, the King County coffee chain, Mercury's Coffee, was forced to void non-compete agreements it required all employees to sign following an investigation by the Washington State Attorney General's Office.
Mercury's Coffee had all their employees, some hourly and low-income, sign restrictive non-compete agreements that prevented them from working at any coffee shop within 10 miles of a Mercury's Coffee location.
According to AG Bob Ferguson’s complaint, Mercurys’ non-compete agreements violated the Washington Consumer Protection Act, which prohibits companies from engaging in “unfair methods of competition.”
The new law specifically indicates that it does not displace current law on nonsolicitation agreements or trade secret laws, and that except as explicitly provided, it does not revoke, modify, or impede the development of the common law.
