When Governor Jay Inslee signs HB 1450, which is 100% expected, Washington State law governing non-competition agreements will shift significantly pro-employee and pro-independent contractor. Once signed by Governor Inslee, this law will become effective on January 1, 2020.
The very first section of HB 1450 sets the tone: "The legislature finds that workforce mobility is important to economic growth and development [and] that agreements limiting competition or hiring may be contracts of adhesion that may be unreasonable."
HB 1450 defines a non-competition covenant to include "every written or oral covenant, agreement, or contract by which an employee or independent contractor is prohibited or restrained from engaging in a lawful profession, trade, or business of any kind." (Note the inclusion of both written and oral agreements in this very broad definition; see exclusions at the Note below).
Under this upcoming law:
Under this new statute, employee non-competition agreements are void and unenforcible unless:
For Washington based employees and independent contractors, non-competition covenants are void if they require adjudication outside of Washington or deprive the person of the protections under the
This new law includes the following remedy provisions, which are very pro-employee and pro-independent contractor:
Thus, even in cases where the court or arbitrator modifies, or blue pencil's the agreement, the employer is still on the hook for paying statutory remedies.
Once signed, this law will become effective on January 1, 2020; however, it can be retroactively applied to non-competition agreements that were entered into before January 1, 2020, under two circumstances:
Note: The following are excluded from the definition of a non-competition covenant: