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ARTICLE · 23 MAY 2019

Washington State Governor Signs Legislation Restricting Noncompetition Covenants

Ogletree, Deakins, Nash, Smoak & Stewart
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On May 8, 2019, Washington State Governor Jay Inslee signed new restrictions on noncompetition covenants for Washington employees.

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On May 8, 2019, Washington State Governor Jay Inslee signed new restrictions on noncompetition covenants for Washington employees. The new restrictions are effective January 1, 2020. Key elements of this new law include the following:

Income Threshold Only employees earning more than $100,000 (or inflation-adjusted amounts) in box 1 of the W-2 or independent contractors earning more than $250,000 (also adjusted for inflation) may have noncompetition covenants. NOTE: Employers may draft noncompetition covenants to become effective once a worker earns a sufficient amount to satisfy the income threshold.
Duration Noncompetition covenants with a duration of 18 months or less are enforceable. Noncompetition covenants with a duration longer than 18 months are presumed unreasonable and unenforceable absent clear and convincing evidence of the necessity for the longer term.

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