Beneath the law, noncompete agreements will probably be unenforceable for Washington-based staff and companies beginning on the efficient date. Employers will probably be barred from getting into into new agreements and should notify present and former staff in writing by Oct. 1, 2027, that present noncompete clauses are void.
The brand new state regulation additionally addresses nonsolicitation agreements. “Nonsolicitation agreements, which prohibit an worker from actively soliciting present prospects or staff away from the employer, aren’t prohibited; nevertheless, the definition of nonsolicitation settlement should be narrowly construed,” the laws states.
Meredith Miller, professor of regulation at Albany Legislation College, mentioned that the brand new regulation is “sweeping” and will drive up wages for workers.
“This might, in flip, improve the cost of borrowing — that’s, if greater employment prices are handed on to debtors within the type of charges. Nevertheless it additionally signifies that staff within the trade might discover the best-fit jobs for them and the employer, as a result of the staff can transfer round. This would possibly introduce efficiencies and even innovation into the mortgage market,” Miller instructed HousingWire.
In response to reporting from The Seattle Instances and knowledge from the Financial Innovation Group, Washington joins a small group of states which have enacted full bans on noncompete agreements, together with California, North Dakota, Minnesota and Oklahoma.
Miller mentioned because of the “quickly shifting panorama,” it’s laborious to inform when and if different states will comply with go well with. “One such invoice is pending in [New York]. There are solely a handful…which have outright bans. However then there’s Florida, which just lately handed laws to make non-competes simpler for employers to implement.”
Washington’s transfer follows broader nationwide efforts to curb noncompete agreements. Throughout the Biden administration in 2024, the Federal Commerce Fee (FTC) permitted a nationwide ban, however the rule was later rolled again after authorized challenges from employers and commerce teams.
The FTC, efficient Feb. 12, 2026, printed a remaining motion within the Federal Register that formally eliminated the Non-Compete Clause Rule (16 CFR Half 910) from the Code of Federal Laws. Now, noncompete enforceability stays ruled by state regulation, which builds upon the Trump administration‘s resolution to have the FTC take a case-by-case method when evaluating noncompete clauses.
The company beforehand issued a public request for information on noncompete agreements in September 2025.
