Washington State Non-Compete Law: Thresholds, Limits, and Remedies

Washington State non-compete law, set out in RCW Chapter 49.62, makes most non-competes hard to enforce. To bind an employee at all, the agreement has to cover a worker earning above an annual threshold that sits at $126,858.83 for 2026 ($317,147.09 for independent contractors), last no longer than 18 months after employment ends, be disclosed in writing by the time the job offer is accepted, and be backed by real consideration if signed mid-employment. Agreements that miss any of these marks are void, and employers who try to use them can be ordered to pay the worker a statutory penalty plus attorney fees.¹

The Earnings Threshold Comes First

A non-compete is void and unenforceable unless the worker’s annualized earnings exceed the figure the Department of Labor & Industries publishes each January. For 2026, the number is $126,858.83 for employees and $317,147.09 for independent contractors.² The base statutory amounts, before annual CPI adjustment, are $100,000 and $250,000.³

If your earnings fall below the line, the non-compete has no legal effect. You do not need a court order to establish that; the statute makes the agreement void by operation of law. For employees, earnings means total compensation from the employer seeking enforcement, annualized. For independent contractors, the earnings must come from the party trying to enforce the restriction, not from total income across all clients.⁴ A freelancer earning $400,000 across five clients cannot be bound by a non-compete from a client paying $60,000 a year.

What Actually Counts as a Non-Compete

The statute defines a “noncompetition covenant” broadly: any written or oral agreement that restrains a worker from engaging in a lawful profession, trade, or business. It also covers agreements that directly or indirectly prohibit doing business with a customer, so some customer-restriction clauses qualify even when the contract never uses the words “non-compete.”¹

Several categories of agreement sit outside the statute and are not subject to the earnings threshold or duration limits:

Nonsolicitation agreements that only restrict poaching specific coworkers or actively pursuing a former employer’s clients.
Confidentiality agreements that protect proprietary information.
Agreements restricting the use or disclosure of trade secrets or inventions.
Non-competes signed by someone buying or selling a business interest of at least one percent of the company.
Non-competes a franchisee enters into when the franchise sale complies with Washington’s franchise investment protection law.

The sale-of-business carve-out trips people up. If you sold an ownership stake and signed a non-compete as part of that deal, Chapter 49.62’s worker protections do not apply. If you are a regular employee without an ownership stake, they do, no matter what the contract calls itself.

Eighteen Months Is the Ceiling

Any non-compete lasting more than 18 months after the end of employment is presumed unreasonable and unenforceable. An employer can try to rebut that presumption, but only by clear and convincing evidence that a longer restriction is necessary to protect the business or its goodwill.³ That is a steep standard, and most employers settle for 12 or 18 months rather than risk the whole restriction being struck.

Performers get a much tighter rule. A non-compete between a performer and a performance venue, or a third party booking the performer, cannot exceed three calendar days.⁴

Disclosure Timing and Consideration

For a new hire, the employer must disclose all the terms of the non-compete in writing no later than the moment the applicant accepts the offer. If the agreement is written to become enforceable later (for example, once the employee’s pay crosses the threshold), the employer has to say so explicitly. Skip the disclosure and the agreement is void.³

For a current employee, the employer has to provide independent consideration: something of real, new value in exchange for the signature. A meaningful raise or genuine promotion qualifies. A vague promise of continued employment does not. Many agreements fail here, introduced during a routine policy refresh with nothing offered in return.

Out-of-State Employers Cannot Contract Around These Rules

Some employers headquartered elsewhere try to insert choice-of-law or forum-selection clauses pointing to a friendlier state. The statute blocks this. For any Washington-based employee or independent contractor, a non-compete provision is void if it:

Requires the dispute to be adjudicated outside Washington
Applies the law of another state
Deprives the worker of any protection in Chapter 49.62

A California-headquartered company cannot force a Seattle-based engineer to litigate a non-compete in California under California law.¹

If You Were Laid Off, the Employer Has to Pay

A non-compete is only enforceable against a laid-off worker if the former employer keeps paying compensation equal to the worker’s base salary at termination for the entire restricted period. Stop the payments and the non-compete dies.³

The employer can offset those payments by what the worker earns from new work that does not violate the agreement. If your prior salary was $150,000 and you take a non-competing consulting role paying $80,000, the employer owes only the difference. If the company lets you go without paying anything, you can compete immediately.

What Happens When an Employer Uses a Non-Compliant Agreement

RCW 49.62.080 gives the enforcement its bite. When a court or arbitrator finds that a non-compete violates the chapter, the employer owes the worker the greater of actual damages or a statutory penalty of $5,000 (adjusted annually for inflation), plus the worker’s reasonable attorney fees, expenses, and costs.⁵

The same penalty and fee-shifting apply even when the court merely rewrites, reforms, or partially enforces the non-compete rather than voiding it outright. An employer cannot escape consequences by arguing that part of the agreement was valid. If the court has to touch it, the employer pays. Fee-shifting is the practical key: without it, most workers would never challenge an overreaching agreement because the legal fees would swamp any recovery.

Do Not Count on a Federal Ban

In April 2024, the Federal Trade Commission issued a rule that would have banned most non-competes nationwide.⁶ A federal court enjoined the rule in August 2024, and in September 2025 the FTC abandoned the rulemaking, agreeing to vacate the rule and dismiss all pending appeals. The agency has said it will pursue case-by-case enforcement under Section 5 of the FTC Act instead, but there is no broad federal ban in place. For Washington workers, Chapter 49.62 is the protection that actually operates, and its choice-of-law provisions keep those protections in reach regardless of what the employer’s contract says.

1
Washington State Legislature. Washington Code 49.62 – Noncompetition Covenants
2
Washington State Department of Labor & Industries. Non-Compete Agreements
3
Washington State Legislature. Washington Code 49.62.020 – When Void and Unenforceable
4
Washington State Legislature. Washington Code 49.62.030 – When Void and Unenforceable Against Independent Contractors
5
Washington State Legislature. Washington Code 49.62.080 – Violation of This Chapter, Relief, Remedies
6
Federal Trade Commission. FTC Announces Rule Banning Noncompetes