Non-Compete Agreements in Washington State: Income Thresholds Apply

Washington State enacted significant non-compete restrictions in 2020, including income thresholds that are adjusted annually for inflation. The law reflects Washington's tech-heavy economy and concerns about employee mobility.

Income Thresholds (2024)

Non-compete agreements are void and unenforceable for:

• Employees: Earning less than $116,594/year (2024 threshold)
• Independent contractors: Earning less than $291,484/year

These thresholds adjust annually based on the Consumer Price Index.

Duration Limits

Even for workers above the income threshold:

• Non-competes longer than 18 months are presumptively unreasonable
• Employer bears burden of proving longer periods are necessary

Layoff Protection

Non-competes are unenforceable unless the employer pays compensation during the restriction period when:

• The employee is laid off
• Unless the layoff was for employee misconduct

Disclosure Requirements

Employers must:

• Disclose the non-compete terms in writing before the employee accepts the job
• Provide additional consideration if presented after employment begins

Penalties for Violation

If an employer tries to enforce a non-compete in violation of the law:

• The employee may recover actual damages or $5,000 (whichever is greater)
• Plus reasonable attorney's fees and costs
• Employer may face Department of Labor investigation

Franchisor Restrictions

Washington also restricts non-competes by franchisors against franchisees, protecting small business owners from being locked out of their industry.

Practical Advice for Washington Workers

• Check your income against the current threshold—it changes annually
• Verify the non-compete was disclosed before you accepted
• Document any layoff circumstances—you may be entitled to compensation
• Know you may be entitled to $5,000+ if employer violates the law