Non-compete Agreements Become Almost Worthless (in Washington State)

This is a little different than our regular memos, but I feel it’s an important subject for Washington business owners.

I recently sent past and present clients a fantastic summary of Washington State’s new non-compete law, taking effect January 1, 2020, which I received from Jeanette Adams Gorman with Socius Law Group in Seattle.

I received a lot of “thank you” and “interesting” comments but the best was, “Wow! this is distressing.” I was a bit surprised so many business owners hadn’t heard much about this.

I won’t get into the details (and I’m glad to send you Jeanette’s report) but will give you my top takeaways.

  • Non-competes will only be applicable to people earning $100,000 or more with the threshold for independent contractors is at $250,000.
  • Non-solicitation agreements and non-disclosure agreements, including sharing of trade secrets, are not affected.
  • Non-competes when the business is sold are still valid (the seller is bound by it).
  • There may have to be compensation to a terminated employee if the company wants to enforce a non-compete.

I encourage business owners to get professional advice on this, so you’re prepared for 2020. Advisors, make sure your clients are aware of this.

“An ounce of prevention is worth a pound of cure.” Benjamin Franklin

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