Non-Compete Agreements in Washington: Are They Enforceable?

Federal law does not directly prohibit or regulate non-compete agreements; they are governed primarily by state law under the Supreme Court's principle that employment regulation falls within state authority. The Federal Trade Commission has authority under Section 5 of the FTC Act to challenge unfair methods of competition, including non-competes that substantially harm consumer competition, but this is narrowly applied.

Federal law does provide some indirect protection through the Defend Trade Secrets Act (18 U.S.C. § 1836), which allows employers to protect legitimate trade secrets and confidential business information without imposing restrictive non-competes. Additionally, the National Labor Relations Act protects certain workers' rights to organize and bargain collectively, which can conflict with broad non-compete provisions.

At the federal level, the enforceability of non-competes depends on whether they are reasonable in scope, duration, and geographic territory. Courts apply a reasonableness standard, but without federal statutory limits, standards vary dramatically by state. Federal employees and federal contractors may face different rules depending on agency policy and contract terms.

Washington law is among the most restrictive on non-competes in the nation. Under RCW 19.86.140, non-compete agreements are declared to be unfair methods of competition and are therefore void and unenforceable as a matter of public policy—with limited statutory exceptions.

The three exceptions under Washington law are: (1) non-competes ancillary to the sale of a business or substantially all of its assets; (2) non-competes ancillary to the dissolution or dissociation of a partnership, limited liability company, or similar business entity; and (3) non-competes ancillary to employment termination, but only if the employee receives compensation or other substantial consideration beyond continued employment. Even within these exceptions, Washington courts impose a strict reasonableness requirement.

For a non-compete to be enforceable in Washington, it must: identify a legitimate business interest (trade secrets, confidential information, substantial relationships with prospective or existing customers, or substantial relationships with prospective or existing employees); impose reasonable time restrictions (typically no more than two years for employment-related non-competes, though this is not statutorily defined); define a reasonable geographic area; and be limited to a reasonable line of business. Washington courts have consistently held that vague, overly broad, or indefinite restrictions are unenforceable.

Crucially, Washington law applies to all employers, regardless of size, and all employees, regardless of employment type or salary level. The burden of proving a non-compete is enforceable falls on the employer. Unlike some states, Washington does not carve out exceptions for executives, at-will employees, or independent contractors.

Washington law contains very few exceptions to the non-compete ban, and courts interpret these narrowly. The first exception applies to non-competes ancillary to the sale of a business or substantially all of its assets; in these cases, the seller can restrict competition from the buyer, provided the restriction is reasonable in time, territory, and scope. This exception does not apply to employee sales of their shares or equity; it applies only to the sale of the business itself.

The second exception covers non-competes ancillary to partnership dissolution or dissociation, allowing partners to restrict each other's competition upon departure, again subject to reasonableness. This is narrower than many states and applies only to actual business entity dissolutions, not informal arrangements.

The third and most litigated exception involves employment termination with substantial consideration. This exception requires that the non-compete be tied to the termination and that the employee receive something of value beyond continued employment—severance, stock options, promotion, salary increase, or other tangible benefit. Continued employment alone is insufficient. Washington courts have been extremely skeptical of this exception, often finding that employers failed to provide adequate consideration or that the restriction was unreasonable.

Common defenses employers raise include that the non-compete protects trade secrets (though the Uniform Trade Secrets Act and injunctive relief provide adequate protection without restricting employment), that it is necessary to protect customer relationships, or that it is necessary to protect confidential business information. However, none of these defenses create an automatic exception; they must fall within one of the three statutory categories.

Additionally, Washington courts have held that a non-compete is unenforceable if it is unconscionable, if it was procured through fraud or misrepresentation, if it conflicts with public policy (such as restriction of professional licensing), or if it is so vague that the employee cannot reasonably understand the restrictions. Non-competes imposed as a condition of employment without prior negotiation or legitimate purpose are frequently struck down.

STEP 1: DOCUMENT THE NON-COMPETE AND SURROUNDING CIRCUMSTANCES Keep a copy of the non-compete agreement as signed, with the date you signed it and any email or written communication about it. Document whether you received consideration beyond continued employment (severance, raise, promotion, stock) or whether it was presented as a condition of hire without negotiation. Record dates you were told to sign it, who required it, and any verbal representations about what it meant. Preserve any written communications from your employer explaining the non-compete's purpose or scope. Take screenshots or photos of any online agreements. If you are currently employed and believe a non-compete is being enforced against you illegally, document any threats or restrictions placed on your employment or business activities.

STEP 2: ASSESS WHETHER YOU HAVE AN INTERNAL REMEDY AND PURSUE IT IF APPLICABLE If you are still employed, consult with your HR department in writing asking whether the non-compete is being enforced and requesting clarification on permissible activities. This creates a paper trail. If your employer is threatening to enforce an illegal non-compete, send a written request to HR stating that RCW 19.86.140 renders the agreement unenforceable and ask for written confirmation that you will not be penalized for competing. Request a written response within 10 business days. Internal complaints rarely result in non-enforcement, but they document that you raised the issue before filing external claims and protect you against retaliation claims. Keep copies of all correspondence.

STEP 3: FILE A COMPLAINT WITH THE WASHINGTON ATTORNEY GENERAL OR FILE LITIGATION You have two main options: (A) File a consumer protection complaint with the Washington Attorney General's Consumer Protection Division at www.atg.wa.gov or call 1-800-551-4636. The Attorney General can investigate whether the non-compete violates RCW 19.86.140 (the Consumer Protection Act) and take enforcement action. This is free and does not require an attorney. Provide your name, contact information, the date you signed the non-compete, a copy of the agreement, and a detailed explanation of how the non-compete restricts your employment or business. There is no formal deadline, but file as soon as you know the non-compete is being enforced or threatened. (B) File a civil lawsuit in Washington Superior Court (state court) seeking a declaration that the non-compete is void and unenforceable under RCW 19.86.140, plus damages if the employer has already taken action against you (terminated you, withheld pay, threatened legal action). You have four years from the date of the violation to file suit under Washington's general statute of limitations for contract claims.

STEP 4: UNDERSTAND THE INVESTIGATION AND LITIGATION PROCESS If you file with the Attorney General, the office will investigate at no cost to you. The process typically takes 2-6 months. The Attorney General may contact the employer for a response, request copies of documents, and interview you. If the Attorney General finds a violation, it may send a demand letter to the employer or file a civil action on behalf of consumers. You will not be a party to this action but may benefit if the employer is ordered to cease enforcement.

If you file civil litigation, the process is longer: complaint filing (30 days), defendant response (20 days), discovery (information exchange, typically 3-6 months), potential summary judgment motion (60 days), and trial (if the case is not settled, 6-24 months). Courts can issue temporary restraining orders or preliminary injunctions if you demonstrate a likelihood of success on the merits and irreparable harm. In most Washington non-compete cases, courts grant summary judgment in favor of the employee because the non-compete is void on its face under RCW 19.86.140. You can recover attorney's fees if you win, because RCW 19.86.140 is part of the Consumer Protection Act, which allows fee-shifting to prevailing plaintiffs.

STEP 5: WHEN TO CONSULT AN ATTORNEY Consult an employment attorney immediately if: (1) you have already accepted a competing job and your former employer has threatened legal action or demanded injunctive relief; (2) your employer has fired you and cited the non-compete as the reason; (3) the non-compete is vague or overly broad and you need help arguing it is unenforceable; (4) you are a high-level executive or have access to genuine trade secrets and the non-compete falls within the business sale exception (in which case you need a specialist); (5) you want to pursue civil litigation and recover damages or attorney's fees; or (6) you want to challenge the non-compete before it is enforced (declaratory judgment action). Choose an employment law attorney licensed in Washington with experience in non-compete disputes. Most offer free initial consultations. Many work on contingency if you have a strong case, since you can recover fees if you win.