ENGROSSED SUBSTITUTE HOUSE BILL 1155
State of Washington
69th Legislature
2025 Regular Session
By House Labor & Workplace Standards (originally sponsored by Representatives Berry, Walen, Ramel, Reed, Ryu, Alvarado, Mena, Macri, Farivar, Fosse, Simmons, Peterson, Goodman, Pollet, Kloba, Ormsby, Salahuddin, and Hill)
READ FIRST TIME 02/11/25.
AN ACT Relating to encouraging competition and economic growth by prohibiting noncompetition agreements and clarifying nonsolicitation agreements; amending RCW 49.62.005 , 49.62.010 , 49.62.020 , 49.62.080 , 49.62.090 , and 49.62.100 ; creating a new section; repealing RCW 49.62.030 , 49.62.040 , and 49.44.190 ; and providing an effective date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. (1) The legislature finds that noncompetition covenants hinder innovation and entrepreneurship, suppress wages, reduce job mobility, and ultimately harm consumers and the economy. In 2019 the legislature took a critical step forward by banning the use of noncompetition covenants for lower-wage earners. This did not go far enough. Research shows that noncompetition covenants restrict workers' mobility, impede efforts to correct inequities, and significantly suppress workers' wages across all sectors, including for those not subject to covenants, or subject to covenants that are unenforceable under state law. Even among supposed high-wage earners, the suggestion that these covenants are bargained is largely a legal fiction. Noncompetition covenants are often unilaterally imposed by employers and businesses without meaningful negotiation. Businesses have more specific and effective legal means to protect intellectual property, trade secrets, and clients without harming workers, contractors, and the public.
(2) The evidence is clear. Banning noncompetition covenants will incentivize innovation and entrepreneurship, increase wages, and even reduce health care costs. To that end, in 2024 the federal trade commission adopted rules banning noncompetition covenants nationwide. Unfortunately, those rules have not been fully implemented. Washington's workers and businesses should not have to wait years for federal court rulings on a nationwide ban when the state has the authority to extend these protections.