Non-Competition Agreements in Washington

Non-competition agreements, also known as covenants not to compete or restrictive covenants, are employment contracts used by employers to limit the ability of an employee to compete with the employer by stealing customers or trade secrets. Enforceable agreements must strike a balance between protecting the employer's legitimate business interests from an unfair competitive advantage with the employee's right to work in a field for which he or she is trained.  In general, courts decide what is considered reasonable or not reasonable by examining the type and size of the business, how long and over what geographic area the restrictions apply and whether adequate consideration, or benefit, was given the employee at the time the agreement was signed.

The Law In Washington

Washington courts have determined that restrictive covenants are enforceable if the terms are reasonable and necessary to protect information or relationships which peculiarly pertain to its operation such as customer contacts and trade secrets. Factors considered when determining reasonableness include the hardship an agreement puts on the former employee, its effect on the general public and the restrictions placed on time, territory and activity of the former employee.

Consideration

With any contractual arrangement, both parties must be giving and receiving something of value, also known as consideration. Washington courts have determined that the offer of initial employment or a change in the terms and conditions of employment is sufficient consideration or benefit to the employee in exchange for agreeing to not compete with the employer should the employment relationship terminate. An agreement signed after the employment has begun generally will not have the requisite consideration if there are no benefits other than continued employment.

Reasonableness in Time and Geographic Scope

Agreements may be deemed unenforceable if a court finds that they are unreasonable in terms of duration, geographic scope and the type of employment or line of business being restricted. If a court finds an agreement is unreasonable, it may modify the agreement so that it does not unduly infringe on the former employee's ability to work.

Examples of non-compete agreements that Washington courts have found to be reasonable include:

  • A 1-year restriction against an insurance and investment broker.
  • A 2-year restriction against a senior engineering employee from "directly or indirectly" contacting the former employer's customers.
  • A 1-year, 10-mile radius restriction against a former management employee from competing with a temporary manual labor staffing company.

The courts have found restrictive covenants unreasonable or used the "blue pencil" rule to modify agreements in these situations:

  • A 36-month, 50-mile radius restriction against a photocopier repair person from competing with his former employer.
  • A 5-year 100-mile restriction against a horseshoer.

Employers need to keep these issues in mind when asking employees to sign restrictive covenants. It is also important to know if potential new hires have a non-compete agreement with a former employer. In some cases, the new employer can be liable to the former employer if hiring the employee would put him or her in violation of the agreement. Different rules may apply to situations in which all or part of a business is being sold and a restrictive covenant is agreed to by the buyer and the seller.

Questions & Answers: Non-Competition Agreements in Washington

I manage a temporary staffing firm and a particular employee that we just hired was hired on with a competitor 10 months before and signed a non-compete. The competitor and our co...
I worked for a retail store as store manager, and when i was hired I signed a non compete form, I was recently fired due to as they put it store sale are down and my store was brin...
If I've been in the media & publishing industry for 25+ years & I signed a non-compete & they let me go prior to my probationary period was complete with no just cause can I go to ...
I worked for an event company for 6 years. I resigned a month ago. A year and 1/2 into my employment I was told I had to sign a 2 yr non-compete in the state of Washington. I was ...
I would like to create a fair and binding non-compete agreement for my employees, can you offer guide lines?...
There's no such thing as a fair non-compete agreement. Try creating a moonlighting disclosure policy - to moonlight the employee has to disclose it. If it is a problem for you, tel...
Comments (43)add comment
Mark Davis: ...
I have a non-compete agreement in a professional field that is 36 months and 50 miles from my former employer. In addition, I can compete in the area if I pay them $5000.00/month. Is there any precedent as to how the WA courts would view this arrangement?
1

July 12, 2012
Steven Daily: ...
Mark,
It is very hazardous trying to rely on other cases, because the results of these cases are inconsistent, and the details of case differ significantly. It is better to look the facts of your case and look at the factors described in the article. But Washington courts have a reputation for upholding non-competes more often than not. They often enforce them against accountants for as long as 25 years.
Steve Daily, LawServer
2

July 13, 2012
Chris: ...
We are a Washington state company involved in distribution of industrial raw materials nationwide and to some customers overseas. Our suppliers are both domestics and overseas. We want to restrict our Delaware sales manager, or others we may hire in Washington or other states, from competing. the way we want to write our clause is to protect our "supply lines" that we sell to "our customers". We think the ex-employee can touch those supply lines via any manner for 2 years after leaving our company. He could do so with other supply lines to that same customer base. could be upheld in court? Thanks.
3

August 09, 2012
Steven Daily: ...
Chris,
It is impossible to predict with any certainty whatsoever how a court might rule in your situation, since these cases require an in-depth factual analysis of each industry, how customers/suppliers are identified, how their identities are protected within the company, and more. As mentioned above, Washington courts tend to be on the side of upholding these agreements, but each case is decided on its own particular merits. Two years is common for non-competes, but again, whether this length of time is "reasonable" is quite subjective. Consulting an experienced employment lawyer would be your best bet.
Steve Daily
LawServer
4

August 09, 2012
Holly: ...
I just received a letter from a former employer that laid me off last summer due to lack of work. I was a part-time admin in house at a staffing company. I worked there a total of 9 mos. I am now a part-time admin at a recruiting company. They want me to sign this letter saying I will discontinue contacting customers and employees. I am not doing that and I would not do that. What do you suggest I do?
5

October 10, 2012
Steven Daily: ...
Holly,

Did you sign a non-compete with your former employer that prohibits you from doing these things? If so, does the letter just repeat what is prohibited under the non-compete? Is there an expiration (e.g., 1-2 years)?

Steve Daily
LawServer.com
6

October 11, 2012
Daniel Larsen: ...
I am an architect, a 1 person firm. A custom builder wants to hire me to act as his "in house" designer for his homes. He wants a non-compete agreement. I don't see how I would make a living if I can't work in my area, and something didn't work out. What should I do?
7

October 30, 2012
Steven Daily: ...
Daniel,
These are very legitimate concerns about the non-compete. Have you discussed them with the builder? Sometimes the employer will simply back off if they are faced with objections. In addition, give some thought to what protections you would be willing to offer the builder as a compromise. For example, perhaps you would agree to a non-compete that ended when your full-time employment with the builder ends, or a very short time thereafter. Or perhaps there are really only certain competing builders that are a concern, and those could be specified as off-limits.

Good luck to you and please post how you resolved this. Thanks.

Steve Daily
LawServer.com
8

November 03, 2012
Dan C.: ...
I am a bail bond agent in the state of washington. I was never laid off for any length of time and have had steady employment for the past three years. About a year ago, my employer made me sign a non-compete. The compensation, according to the agreement, was 2 sick days and continued employment. The length and distance is 24 months after employment and 10 miles or any geographical market in WA state. I am just curious because I am licensed through the Dept of Licensing and this is in essence my chosen profession, how likely is it that this agreement would stand up in court if I chose to work for another company, say that was outside the ten miles from my current office location. Thank you.
9

November 07, 2012
John: ...
Hi, I am an independent contractor sales rep working WA state territory for a company based in Florida. The non-compete language includes "Sales Representative hereby covenants and agrees that for a period of one (1) year from the termination of this Agreement, Sales Representative shall not enter into any agreement or engage in the research, manufacture and/or sale of any product or product line which may compete with the products in the United States. During the one (1) year period immediately following the termination of this Agreement, Sales Representative shall notify Company in writing by U.S. Mail, return receipt requested, within five days of accepting employment or an independent contractor position. Said notice shall include the name, address, and telephone number of the new employer or contracting party, the date employment or the contract began, and the duties to be performed by Sales Representative." Does this look enforceable in WA state? The contract specifies Florida jurisdiction for a case. Wouldn't they have to move it to WA eventually? The prospective new employers are based in NH and TX, I'd be working the same WA state territory. Thanks a bunch!!
10

November 29, 2012
Randall: ...
I was handed a "NonDisclosure with a No Compete Clause after working for a company for 9 years. If I sign this I will not be able to engage in any activity involved in the resale of precious metals, coins, antiques, art, used goods. I have dealt in these goods for 16 years. If I sign I will receive $100, that is not even a days wage. I dropped out of college to work with this solproprietor. This business is all I know as it is the only real job I have had since I was 16, now I'm 26. It states a no compete for 18 months and a 50 mile radius after the fact. I have spent my whole life in this town trading in goods. I feel trapped as I was told those who declined to sign would be terminated. Is $100 enough compensation, can I be legally fired for not signing it? Thanks!
11

December 18, 2012
Randall: ...
One more thing. I was hired because of my dealings in coins, antiques, collectibles, ect. My boss met me at an antique, coin auction.
12

December 18, 2012
Angie: ...
I have a brother-in-law who owns a carpet cleaning franchise. Unfortunately the new restrictions of the franchise are making it unprofitable to continue his business. However, he has a no compete franchise clause stating that he cannot clean carpets for 2 years anywhere in this state. He and my sister have spent years building their business and this is their livelihood. Is this non-compete clause enforceable in Washington State?
13

January 01, 2013
Steven Daily: ...
Dan,
The duration of your non-compete seem reasonable on their face, and it is clear that you received some consideration for signing, so without knowing much about your line of work the non-compete would seem likely to be upheld. I am unclear about the geographic scope, however. How does it compare to the territory for which you had responsibility, or the employer's sales market? That might make a big difference.

John,
The geographic scope of this non-compete seems unreasonable since it applies throughout the country. But a court might simply rewrite it to apply within Washington.

Randall,
It does indeed sound like a trap for you in such a small market. $100 would indeed probably be upheld as valid consideration by a court (that's exactly why it is being offered). And unless you have some contract guaranteeing employment for a specified time, you can be fired for not signing.

Angie,
I wonder about the validity of the geographic scope of this agreement, since presumably your brother-in-law did not clean carpets throughout the state. I can't predict how a court would rule in a dispute over this, but how likely is it that your brother-in-law would have the financial resources to litigate with the franchisor over this?

Steve Daily
LawServer.com
14

January 02, 2013
Bryan: ...
I worked for a large national Dry Ice company for 14 years as a branch manager. I signed a non-compete contract when the large company cought out the company I was working for. I believe it was for 1 year. Last June (2012) I was terminated from my position. I have been unemployed for 7 months and have been offered a job as salesman for a smaller regional company. Do I have to wait before taking the new job? Can a company who terminated an employee keep them from providing for their family? I do not want to wait any longer to begin my new career. What can I do and does the state of Washington have to say about these con-compete contracts? I have requested a copy of the contract and should receive them on monday January 7th, 2013.
15

January 06, 2013
Melanie: ...
I started working in ad sales for a company in DE on September 2nd. They had me sign a non compete agreement on September 11, after I had been working for over a week. I resigned on December 26 to work for an ad sales company in Philly, and they are holding me to a 100 mile 90 day non compete. I have tried to negotiate down where I will not call on any of my previous clients if I can go back to work asap. Are there any grounds for me to the fact that I signed to document after working for 9 days?
16

January 10, 2013
Clarissa: ...
My husband is considering changing dental offices within our mid sized town. For the past 1 1/2 years, he has worked in a clinic 45 minutes away. Prior to that he worked in our town for 2 years. His contract included a 3 year no compete that restricts working as a dentist in either town. We are wondering if Washington state would typically enforce working in our town. He's had no contact with patients here for awhile. Any thoughts are appreciated.
17

January 27, 2013
Daniel: ...
I have not yet started a business, but I will be moving to Seattle soon to create a balloon animal entertainment company. I will be training artists and sharing my trade secrets so that they can work for me, but want to avoid their competition when they have been taught. What is a reasonable amount of time on that contract? Ideally, I would be able to sign them for 2-4 years, as they would have no way of succeeding in the industry without my instruction.
18

January 28, 2013
Joshau: ...
I am working in Software Sales for a company based in Washington State, where I cover territory along the eastern seaboard. I did sign a non-compete at the start of my employee that simply states I cannot "compete" against the company for a period of 12 months after my employment is terminated. I am currently looking into an employment opportunity in software sales for another Washington based company that sells a similar type of solution, however I expect to be focusing on an entirely different type of client base. Should I be worried?
19

February 14, 2013
Kitty: ...
I was terminated from my job this month in Washington state, they tell me I can not work with my previous client or they will sue me but he fired their company before asking for me with another company. Would this be competition if I didn't ask him to leave that company? They also tell me I can not work for him for a year or even go visit him for a year or they will sue me, this has me very distressed because any time I try to work for a company they wont hire me in fear of being sued. Is there anything I can do to at least see my old client? Are they able to control my personal life like this?
20

February 21, 2013
Michael J: ...
I am creating a new website for myself but I have decided to enlist the assistance of an individual through Craigslist.. To me it is very important to protect the information and purpose / how it will operate. One of the web developers said he would gladly sign a non compete form - should I also have him sign a non disclosure? is a non compete enough to protect my idea??

thanks
21

February 27, 2013
Stephen J.: ...
I sold a computer shop in Oak harbor Wa over a year ago. And as such signed a no comp. cluase, but as I reread it says I can not work at all period for the entire time the buisness is in buisness. They have also since changed the buisness name and lisc. Since the contract says while "PIONEER COMPUTERS" is in buisness does this still apply?
22

March 25, 2013
Alex: ...
I am approaching the end of my 10 year franchise agreement with my franchisor. The brand did not exist in my area of the country before I brought it there. Currently, there are no other franchises in my area. I want to exit from the franchise and re-brand. I own the relationships in the community and the only thing that is tying me to the franchise is my royalty payment. Their support is minimal at best. I have a 2 year non-compete and they want to enforce non-compete within a 40 mile radius of my location. In the state of WA is this type of non-compete enforcable?
23

April 09, 2013
Selena: ...
I was told when I signed my non compete " it's just in case you start your own business" there are several ex employees who said that's what they were told also. So I quit recently and joined my local union. The union put me to work for a contractor at the same site doing the same work. They bid on these jobs and the lowest bidder gets the work. Both companies have contracted there for years. I received a letter saying they will sue if I continue to work there. I was laid off. The non compete states I can not solicit work from his old customers, (I don't) and further states I can't work for any company performing the same or similar work in a 75 mile radius for a year. Now I'm an 06 electrician this means all companies doing 06 work? And that's most of Washington state. The local union I joined said these agreements are illegal in the state of Washington. They are sending out a letter requesting they drop it or they will file a countersuit. I also hired a personal attorney.
24

May 04, 2013
Selena: ...
Any advice?
25

May 04, 2013
Mike Irwin: ...
I am retireing after 35 years in the Laborers union in Seattle, WA.The paperwork is almost completed and I recieved one sheet that states I can not work In the Industry in the Geografic area covered by the agreement. I have taken a job as a Saleried Superintendent in Bellevue, WA. If I proceed with the Retirement It will be suspended due to me working. That suspention will also cause me to loose my medical benefits forever. Is this a Non Disclosure case, and can I fight it?
Mike
26

May 20, 2013
Spekter: ...
I signed a non-compete/non-disclosure form that was actually both on one page. I was asked to agree to a 5 year restriction from working in the sign making business. I don't actually make the signs I am a designer. The geographic restriction were two entire counties Skagit and Island. One of the counties (Skagit) my former employer doesn't even operate in. He has a bitter rival there he personally doesn't care to much for. So, what kind of lawyer do I need, if any, to get my restrictions changed to more reasonable two years? It has been almost three years.
27

May 26, 2013
Jakob: ...
I work in the IT field in Washington state and am currently contracted to a vendor agency. I recently found a new agency that can offer me a better pay rate and benefits so I looked into making the switch to the new agency. Once I informed my current agency they got upset and told me that I was under a non compete agreement which I signed in my contract with them. I couldn't find an NCA clause anywhere in my contract so I asked them to send me a copy of it. Apparently there is a one sentence clause titled Restricted Period. This is how it reads. "Restricted Period:
The Restricted Period shall be the period of one year following the termination of Employee’s employment with Employer for any reason."
That is all there is in my contract, nothing else. As you can see it is very brief and quite vague so I never saw that and thought that it was an NCA. Is this enough for my current agency to force me to stay with them on this job? It just doesn't seem like that clause is enough for them to have an enforceable NCA.
28

June 03, 2013
Kelly : ...
I signed a no compete agreement with my former employer that I couldn't start my own house cleaning business and solicit her clients when I left. I started my own business but have not solicited any of her clients & all my clients are new that I found when I placed my ad. She is now suing me for breach of contract. Does her lawsuit have merit?
29

June 15, 2013
KMV: ...
I have a professional line of work and when got hired signed the non-compete agreement which said about 200 miles radius and for 12 months I can't work in the same setting. Now the company is moving very far from my home and will take very long to commute and I really enjoy the line of my work and want to look for a job in the same line of work. Since the company is relocating against my will, do I have freedom to ignore the non-compete agreement I've signed a few years ago and can work in the same setting (which will be within 200 miles) or will the court still be on the side of my company that I'm with currently? I wouldn't have had to think of switching my job though if it didn't relocate to such a far distance from my house. And what's usually the penalty for bridging the contract if I still want to go and work at the other "competing" place? There's no "secrets" and I wouldn't reveal whatever they consider as "secrets."
30

June 17, 2013
David N: ...
I work for a company based in CA. I live and work in a branch office in Washington State. If I sign a non-compete given to me by my corporate office, where is the presiding law governing the contract WA, or CA?
Knowing that CA doesn't recognize non-compete contracts, if it is enforcable by CA court only, would it stand?
31

June 25, 2013
Josh: ...
I was a outside sales for a hood cleaning company. I signed a no compete contract but I don't have a copy or know how long it is for. Is there a legal limit in Washington state of how long it can be? Also is my previous employer obligated to provide a copy of it if I request it?
32

June 29, 2013
Tiffany Leigh: ...
I was going to go with a company as a1099 employee and had to sign a non compete before training both parties agreed it was not a goog fit and I never went to training, never received trade secret or made privy to company information ,price list,customer list ect. But now that I am with another company as 1099 doing the same type of business. The company is now trying to inforce a non compete when I officially never started with them to begin with. Can this non compete actually be inforced in the state of WA ? I also never received a copy of the non compete I signed it and faxed it but never received a copy with the company's chief executive officers signature ...would it even be valid to begin with?
33

July 06, 2013
Connie: ...
In Washington state- is a non-compete agreement valid if signed by a minor?
34

July 15, 2013
AJ: ...
I currently work in the Telecommunications field as a Contractor, providing my services on projects for Vendors.
My Contracting company, merged with a new Contracting company, based out of Maryland.
All contractors/employees, had to signed a Non-Compete Agreement, through the New Contracting company.

Verbally, I was told that the Non-Compete agreement, only applied to the Vendor company that I was doing Project Work for.

I left this Contracting company, to work on a new project with a new Vendor, through a different Contracting company.

I want to take on a new Project opportunity with my previous Vendor company, but I do not want to go back to the Contracting company, from Maryland.
They were a terrible company, to work for.

Is the Non-Compete, enforceable in the State of WA?

Will I get into any legal trouble, if I choose to go with a new Contracting company... different from the one, that I signed the non-compete form with?
35

July 23, 2013
Becky: ...
I am a professional dog groomer and have signed a non-compete form at my current salon. I do not hold any kind of management position there. The non-compete restrictions are I cannot take another position within a 7-mile radius for a period of one year. I am considering leaving this salon, but have been warned that my employer is very prone to tracking down former employees, almost to the extent where it seems she uses the non-compete in order to harass former employees. She also enforces the 7-mile radius, not as how far one drives, but as the bird flies. I'm wondering if she can legally keep me from finding gainful employment this way, if I happen to apply somewhere within the radius, especially if it is actually outside of 7-miles by car.
36

August 16, 2013
MGC: ...
After years of employment, I was asked to sign a non-compete. At one point, I was threatened to be fired if I did not sign the agreement. I ended up signing the agreement. They fired me 12 days later. Is the agreement still valid in WA?
37

August 21, 2013
caleb: ...
I manage a temporary staffing firm and a particular employee that we just hired was hired on with a competitor 10 months before and signed a non-compete. The competitor and our company share many of the same clients and this employee worked at a shared client through the other company. This employee no longer works for the competitor company because they were not being treated fairly but we are unsure if this employee can work at the same client through our company. We have done business with this client on a continual basis so can our new employees non-compete be upheld?
38

September 05, 2013
gigster: ...
I worked for a retail store as store manager, and when i was hired I signed a non compete form, I was recently fired due to as they put it store sale are down and my store was bringing the rest of the franchise stores numbers with it.both insidesales and outside sales were down although I did not have a full time outside salesperson for over 8 months. Am i still bound by the non compete agreement? I live and worked in the state of washington.
39

September 16, 2013
Lisa fleek: ...
If I've been in the media & publishing industry for 25+ years & I signed a non-compete & they let me go prior to my probationary period was complete with no just cause can I go to work in the industry for a competitor?
40

September 28, 2013
Jamey: ...
I worked for an event company for 6 years. I resigned a month ago. A year and 1/2 into my employment I was told I had to sign a 2 yr non-compete in the state of Washington. I was laid off by this employer in 2011 and received unemployment. Since I did not sign a new agreement upon returning to this employer a month later isn't the non compete expired now?
Also, can it stop me from working in my field for 2 yrs? Shouldn't the company have to compensate me for having to take a lower paying job not in my field? And what about consideration since I didn't sign it until 21 months after my employment with them began?
41

October 23, 2013
George: ...
I would like to create a fair and binding non-compete agreement for my employees, can you offer guide lines?
42

December 31, 2013
Rich: ...
There's no such thing as a fair non-compete agreement. Try creating a moonlighting disclosure policy - to moonlight the employee has to disclose it. If it is a problem for you, tell them that they have a choice of doing that job or their current one. If you're smart, though, you'll have a policy of unlimited moonlighting allowed with disclosure so long as it doesn't affect the employee's work quality. You'll have happier employees and less need for them to go elsewhere.
43

February 20, 2014

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