Non Compete Law in Washington State

Undeclared work occurs when an employee has more than one job. The non-compete obligation ensures that some low-income employees will be able to leave their employer without restriction. It makes sense to set an income limit for the use of non-compete obligations. There is rarely a good reason why a low-level employee should be subject to a non-compete clause, as stated in the Senate Bill report for ESSB 5478: We can help you draft a non-compete or solicitation agreement that complies with applicable laws and protects your company from legal penalties. Contact us today for help with your non-compete obligations. In the future, whether solicitation prohibitions are enforced will continue to depend on their relevance, a vague standard typically influenced by (1) the geographic scope of the restriction and (2) the duration of the restriction. Although the “adequacy standard” continues to apply to some extent to non-compete obligations, it will become less important given the more specific restrictions imposed by the new non-compete obligation. Before the new law, many employers tried to persuade low-wage workers to ban competition. In order to create a level playing field, the legislator introduced a wage requirement for employees and independent contractors, who must be subject to a non-compete obligation. The WSHA has worked with the Association of Washington Business on this issue and welcomes the fact that the law, in its enacted form, recognizes the validity of non-compete obligations in certain circumstances and addresses the concerns expressed by the WSHA during the 2019 legislature. In general, the three-part test of the reasonableness of a duty not to compete asked (1) whether the restriction is necessary to protect the business or the employer`s goodwill, (2) whether it imposes on the employee a greater restriction than is reasonably necessary to secure the business or the employer`s goodwill, and (3) whether the application of the agreement exposes the public through the loss of services and would impair the employee`s abilities to such an extent that the court should not apply it. confederation, i.e.

if it violates public order. Perry v. Moran, 109 Wash.2d 691, 698, 748 P.2d 224 (1987), amended judgment on Recons. for other reasons, 111 Wash.2d 885, 766 P.2d 1096 (1989). It`s not hard to imagine Washington employers inserting choice of forum or choice of law clauses into non-compete clauses in order to let the laws of another state regulate the contract or compel the employee to file a lawsuit in another state, thus avoiding the new restrictions on non-compete obligations in Washington. One of the characteristics of the law is the presumption that any non-compete obligation exceeding 18 months after employment is inappropriate and unenforceable. This presumption can be rebutted, but only by clear and convincing evidence (a fairly high burden of proof) that a longer period is necessary to protect the business or goodwill of the party. The result is moral hazard. The employer has no reason to formulate narrow non-competition clauses, as there are no consequences for the use of general collective clauses; The courts will simply apply the “blue pencil” clause (i.e., rewrite) and a more “reasonable” version of it.

Subject: The new state law restricts the use of non-compete obligations Colin F. McHugh is a labour law in Vancouver, Washington, and has reviewed, drafted, negotiated, negotiated and revised numerous employment contracts with non-compete obligations and other restrictive agreements. If an employee is dismissed as a result of a dismissal, a non-compete agreement is void, unless the performance of the agreement includes compensation equal to the employee`s base salary for the performance period, less any remuneration derived from subsequent employment. NEXT STEPS FOR EMPLOYERS Employers are advised to review the non-compete clauses in Washington. For letters of offer made available to candidates after January 1, 2020 (and most employers are likely to choose to change earlier), employers should not include a post-employment non-compete obligation unless it expressly provides that it is unenforceable unless the employee earns more than $100,000 (indexed to inflation) at the time of dismissal. Termination insurance: If an employer wants to enforce a non-compete clause against a dismissed employee, the company must now pay the employee its base salary as long as the agreement is in force, less any compensation the employee receives during the same period of subsequent employment. The measure, known as “garden leave,” provides workers with some form of insurance in the midst of layoffs. Whatever your personal beliefs about non-compete obligations, you need to know how recent changes to Washington state law will affect your business.

A new Washington non-compete clause affecting both existing and new agreements came into force on January 1, 2020. For decades, Washington courts have enforced non-compete rules to the extent appropriate and amended agreements if necessary by limiting their duration or geographic scope. At common law, courts consider the following three issues to determine suitability: employers who have applied non-compete obligations in the past are particularly advised to consider their existing agreements – the new law applies retroactively to agreements entered into before the january 1, 2020 entry into force, and there are penalties that apply to attempts to: beyond what is permitted by the new law. In the Emerick case, the Court of First Instance reformed the geographical scope of a doctor covering an entire county. See Emerick v. Cardiac Study Center, Inc., PS, 286 pp.3d 689, 690, 170 Wash. App. 248 (Ct.

App. 2012) (the initial non-compete obligation covered all of Pierce County and Federal Way); see also Emerick v. Cardiac Study Center, Inc., PS, 357 P.3d 696, 700 189 Wash. App. 711 (Ct. App. 2015) (“Emerick II”). The Court of First Instance reduced the geographical scope of this non-compete obligation to a radius of only two miles, as it was excessively burdensome for the doctor […].

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