The laws regarding non-compete agreements in Washington State changed too drastically in 2020 for a single blog post. Previously, we covered some basic changes regarding salary and compensation, but there were other changes to non-compete agreement laws regarding enforcement periods, termination of employment and location of dispute resolution.
The enforcement period for a non-compete agreement is now limited to a maximum of 18 months. Non-compete agreements in effect before 2020 that include an enforcement period longer than 18 months will be presumed unreasonable. The new laws will simply reduce the duration to 18 months, unless the employer can clearly show that a longer time period is necessary to protect their interests. If an employer fails to meet this burden of proof, then they will be subject to an automatic penalty, including paying the employee’s attorney’s fees and costs.
Historically, some employers chose not to enforce non-compete agreements against employees who had been terminated or laid off. As of 2020, an employer choosing to enforce a non-compete agreement in these situations must pay the former employee his or her wage throughout the duration of the non-compete enforcement period. If, on the other hand, the termination resulted from employee misconduct, then the employee may not be eligible wage payments during the enforcement period of the non-compete agreement.
If any employer seeks to enforce a non-compete agreement against a Washington State employee, the new law requires any dispute be resolved in Washington State. This effectively prevents employers from requiring employees to litigate any disputes in a far away location or venue, which can decrease the chances that an employee will challenge the non-compete agreement.
Employers and employees should take a close look at their existing non-compete agreements. If the non-compete agreement conflicts with this new legislation, contact our office. We can help.