Bill > SB5437

This bill, titled "Prohibiting noncompetition agreements and clarifying nonsolicitation agreements," aims to foster economic growth and competition by broadly banning noncompetition agreements for all workers and businesses in Washington state, building upon a previous law that only protected lower-wage earners. A noncompetition agreement, defined as any contract that prohibits or restrains an individual from engaging in lawful work, is now void and unenforceable, regardless of when it was signed or the individual's earnings. The bill also clarifies that nonsolicitation agreements, which prevent employees from actively soliciting current customers or employees away from their former employer, are still permissible but must be narrowly interpreted. Employers are prohibited from enforcing, attempting to enforce, or even threatening to enforce noncompetition agreements, and must provide written notice to current and former employees by October 1, 2027, stating that any such agreements are void. Violations of this chapter can result in penalties for the employer, including actual damages or a statutory penalty of five thousand dollars, plus attorney's fees. The bill repeals existing laws related to noncompetition agreements for independent contractors and specific industries, and takes effect on June 30, 2027.

Business and Industry

https://app.leg.wa.gov/billsummary?BillNumber=5437&Year=2025&Initiative=false