On March 23, 2026, Washington Governor Bob Ferguson signed Engrossed Substitute House Bill 1155 (HB 1155), which voids almost all non-compete agreements across Washington effective June 30, 2027. This law marks a major shift from previous regulations that only prohibited non-competes for workers earning below a certain income threshold.

HB 1155 Impacts Anyone with a Business or Workers in Washington

While HB 1155 was enacted in Washington, the effects of HB 1155 aren’t just limited to Washington-based businesses. Washington takes an expansive view in protecting its citizens and won’t enforce non-competes against workers who live in Washington, regardless of where the business who has hired the worker is headquartered. HB 1155 also prohibits non-compete agreements involving a Washington worker or business from being adjudicated in another jurisdiction. This means that HB 1155 and other Washington law will apply to a non-compete dispute if at least one signer to the non-compete is domiciled in Washington. Additionally, given Washington’s history as an early adopter, model state for labor laws, companies nationwide should be prepared for other worker-friendly states to enact similar laws.

Almost All Non-Compete Agreements are Banned Under HB 1155

HB 1155 broadly defines a non-compete as any written or oral agreement—including an informal “handshake agreement”—that restrains a worker from engaging in a lawful profession or trade. Most relevantly, the law specifically bans agreements that:

• Penalize workers for engaging in a lawful profession by threatening, demanding, or requiring the forfeiture or repayment of any right, benefit, or compensation;
• Prohibiting workers earning below a certain monetary threshold from having an additional job, supplementing their income by working as an employee or independent contractor elsewhere, or being self-employed; and
• Directly or indirectly prohibit a worker from transacting business with a customer, unless certain parameters are met.

What Business Protections Are Still Allowed?

Despite HB 1155’s sweeping ban, employers can still protect their interests through:

• Non-Solicitation Agreements: Employers can still prevent departing workers from “poaching” current employees. Employers can also prevent departing workers from soliciting current and prospective customers so long as: (1) the worker has established or developed a relationship with the customer through their employment; and (2) the restriction lasts no more than 18 months post-employment.
• Non-Disclosure and Proprietary Information and Inventions Assignment Agreements: These agreements remain valid so long as they are designed to prohibit the use or disclosure of trade secrets and inventions.
• Non-Competes Connected to the Sale of Business: Non-competes are still enforceable when connected to the sale of a business, so long as the individual signing the agreement is acquiring or selling an ownership interest of at least 1%.

HB 1155 Requires Employers to Do More Than No Longer Requiring Non-Competes

Significantly, HB 1155 is retroactive. This means that when HB 1155 becomes effective on June 30, 2027, all existing non-compete agreements will become void and unenforceable, regardless of when they were signed.

It isn’t enough for a company to simply not enforce non-compete agreements after June 30, 2027. Rather, because HB 1155 is retroactive, the law requires employers to make reasonable efforts to provide written notice to all current and former employees and independent contractors who signed non-competes that the non-compete is void and unenforceable. Any business who fails to make reasonable efforts to provide this notice by October 1, 2027 may be in violation of HB 1155.

After June 30, 2027, businesses are not permitted to enforce, attempt to enforce, or threaten to enforce a non-compete or to tell a worker that they are subject to a non-compete or attempt to enter a new non-compete with a worker.

Penalties for Violating HB 1155

If a business is found liable for violating HB 1155, they could be ordered to pay the impacted worker the greater of the statutory penalty of $5,000 or their actual damages, plus reasonable attorneys’ fees, expenses, and costs. A worker’s actual damages could be significant if the worker missed a valuable business opportunity due to a void non-compete.

The potential penalties for violations of HB 1155 could be substantial for companies that have had multiple non-compete agreements with past and current workers.

Additionally, businesses should be aware that the Washington Attorney General is authorized to take action against businesses who have violated HB 1155. Not only is defending against government action an expensive and time intensive process, but it also raises concern that other areas of non-compliance could be found by the state during the process and lead to further penalties.

Businesses’ Compliance with HB 1155

Businesses may want to get ahead of HB 1155’s June 30, 2027 effective date, by taking early steps such as:

1. Auditing all current and former employment contracts, offer letters, and independent contractor agreements to identify any terms that may be impacted by HB 1155;
2. Ensuring all confidentiality and non-solicitation clauses are narrowly tailored to comply with the new statutory limits of HB 1155; and
3. Compiling lists of current and former workers who will require written notice before HB 1155’s October 1, 2027 notice deadline.

Focal PLLC is ready to help your business ensure that it complies with HB 1155. Please contact Sean McChesney or Ashley McDonald to discuss how Focal can help you or your business.