Washington non-compete law: how RCW 49.62 imposes income thresholds, caps duration at 18 months, requires garden leave for laid-off employees, and awards attorney fees to workers who win

Washington built one of the strongest statutory frameworks in the country

Washington's non-compete statute, RCW 49.62, took effect on January 1, 2020, and immediately placed Washington among the most employee-protective states for restrictive covenant enforcement. The statute combines an income threshold, a duration cap, mandatory garden leave for terminated employees, and an attorney-fee provision that shifts litigation costs to employers who attempt to enforce void agreements.

Before the statute, Washington followed a common-law reasonableness framework without income thresholds or duration limits. The legislature's decision to impose bright-line rules reflected growing concern about the use of non-competes against lower-wage workers and the deterrent effect of restrictive covenants on employee mobility — the same concerns that motivated the FTC's failed federal ban.

The result is a framework that preserves non-compete enforcement for high-income employees while categorically protecting lower-wage workers and imposing procedural and substantive guardrails that don't exist in most states.

The income thresholds

Washington's non-compete framework hinges on two income thresholds, both adjusted annually by the state Department of Labor and Industries.

For employees, the threshold is set at the annualized equivalent of the state's median household income multiplied by a statutory factor. For 2025, that threshold was approximately $120,559. Any non-compete with an employee earning below this amount is void and unenforceable. The employer cannot enforce it regardless of its terms, regardless of how much confidential information the employee accessed, and regardless of what consideration the employer provided.

For independent contractors, the threshold is substantially higher — $305,000 annually for 2025. Non-competes with independent contractors earning below this amount are void. The higher threshold reflects the reality that independent contractors generally have less bargaining power over contract terms than employees, and that non-competes imposed on independent contractors can be particularly burdensome because the contractor's entire livelihood may depend on serving multiple clients in the same industry.

Both thresholds adjust annually, which means they track economic changes automatically rather than requiring periodic legislative action. This is a structural advantage over fixed thresholds like those in Illinois, which increase only at legislatively specified intervals.

Compensation for threshold purposes includes wages, salary, commissions, and bonuses but does not include benefits, stock options, or other non-cash compensation. The calculation is based on the employee's annualized earnings at the time the non-compete is entered into.

The 18-month duration cap

Washington imposes a hard cap on non-compete duration: 18 months from the date of separation. Any restriction beyond 18 months is presumptively unreasonable, and the burden shifts to the employer to prove by clear and convincing evidence that a longer duration is necessary to protect its business interests.

The "clear and convincing evidence" standard is demanding — substantially higher than the preponderance-of-the-evidence standard that governs most civil claims. In practice, very few employers can satisfy this burden, making 18 months the effective ceiling for non-compete duration in Washington.

This cap is shorter than the periods commonly enforced in other states. Ohio, Georgia, and Pennsylvania routinely enforce two-year restrictions. Florida has a rebuttable presumption that durations up to two years are reasonable. Washington's 18-month cap means that even a well-drafted, fully enforceable Washington non-compete expires six months sooner than what's standard in most other states.

The mandatory garden leave provision

Washington's most distinctive feature is its mandatory garden leave requirement for employees who are terminated. Under RCW 49.62.020(2), a non-compete is void against an employee who is terminated as the result of a layoff unless the employer pays the employee's base salary during the enforcement period, minus compensation the employee earns through subsequent employment during that period.

The practical effect: if an employer lays off an employee and wants to enforce a non-compete, the employer must continue paying the employee's base salary for the entire duration of the restriction. The employee is paid not to compete. If the employee finds a non-competing job during the restriction period, the employer can offset the garden leave payments by the amount the employee earns, but the employer cannot reduce the payment below zero.

This provision changes the enforcement calculus dramatically. In states without garden leave requirements, the employer can terminate an employee and enforce a non-compete at no ongoing cost — the employee bears the full burden of the restriction. In Washington, the employer bears a substantial cost: continuing to pay the salary of a former employee who is producing nothing. This creates a financial incentive for employers to release non-competes upon termination rather than enforcing them, which is precisely the legislative intent.

The garden leave provision applies to layoffs. The statute uses the term "laid off," which encompasses reductions in force, position eliminations, and similar involuntary terminations not related to the employee's performance or conduct. Whether a termination for cause triggers the garden leave requirement depends on the specific circumstances — a genuine performance-based termination is arguably not a "layoff," but the employer bears the burden of demonstrating that the termination was for cause rather than a disguised layoff.

The attorney-fee provision

RCW 49.62.080 provides that an employee who successfully challenges a void non-compete is entitled to actual damages, statutory penalties of $5,000 or actual damages (whichever is greater), reasonable attorney fees, and costs. The attorney-fee provision shifts the economics of non-compete litigation by ensuring that employees who challenge void agreements don't bear the cost of litigation even when they win.

This is significant because the cost of defending against a non-compete enforcement action is one of the primary reasons employees comply with agreements they believe are unenforceable. Even a void non-compete has deterrent power if the employee must spend $30,000 to $100,000 on lawyers to establish that it's void. Washington's attorney-fee provision neutralizes this dynamic: if the agreement is void, the employer pays the employee's legal costs.

The $5,000 statutory minimum ensures that even employees whose actual damages are difficult to quantify have an incentive to challenge void agreements. Combined with attorney fees, the provision creates a regime where employers who impose void non-competes face financial consequences beyond simply losing the enforcement action.

The notice and disclosure requirements

Washington requires that non-compete agreements be disclosed to employees before or at the time of the employee's acceptance of the offer of employment, or, if the agreement is entered into after employment begins, supported by independent consideration. Independent consideration for mid-employment non-competes means something beyond continued employment — a raise, bonus, promotion, or other tangible benefit.

This disclosure requirement prevents the practice of presenting non-competes during onboarding after the employee has already resigned from a prior position, relocated, or otherwise committed to the new job. The employee must know about the non-compete before accepting the offer, giving them the opportunity to negotiate the terms or decline the position.

If the employer fails to provide the required disclosure, the non-compete is voidable regardless of the employee's income level. This is a procedural defect that can void an otherwise enforceable agreement, and it applies to all employees, not just those below the income threshold.

The choice-of-law override

RCW 49.62.050 provides that Washington law governs non-competes with employees who are primarily based in Washington, regardless of the choice-of-law provision in the agreement. An employer based in Florida or Texas who hires a Washington-based remote worker cannot circumvent Washington's protections by designating another state's law.

This follows the approach pioneered by California's SB 699 and adopted in several other employee-protective states. The principle is that the state where the employee works has a paramount interest in regulating the employment relationship, and that interest overrides the parties' contractual choice of law.

For employers with employees in multiple states, the choice-of-law override means that a one-size-fits-all non-compete template won't work. An agreement that's enforceable in Georgia or Pennsylvania may be void as to Washington-based employees if it exceeds the income threshold, violates the 18-month duration cap, or fails to meet the disclosure requirements.

The reasonableness framework for qualifying agreements

For employees above the income threshold with agreements that satisfy the procedural requirements, Washington courts apply a reasonableness analysis similar to other states. The restriction must protect a legitimate business interest, be reasonable in scope, and not impose undue hardship on the employee.

Washington courts recognize trade secrets, confidential business information, customer relationships, and specialized training as legitimate business interests. The analysis is fact-specific and considers the employee's actual access to protectable information, the nature and depth of client relationships, and the scope of the restriction relative to the interest being protected.

Geographic scope must correspond to the employer's actual competitive footprint and the employee's territory. Washington's economy is concentrated in the Puget Sound region, and courts evaluate geographic restrictions with reference to the specific market served by the employee. A statewide restriction for an employee who worked exclusively in Seattle faces scrutiny.

The scope of restricted activity must be tailored to competitive work. Blanket restrictions on all employment at a competitor are disfavored; restrictions limited to the same role, the same clients, or the same product area are more defensible.

The practical enforcement landscape

Washington's statutory framework has significantly reduced non-compete enforcement activity, which is part of the point. The income threshold eliminates enforcement against the majority of workers. The garden leave requirement makes enforcement against terminated employees expensive. The attorney-fee provision makes enforcement of void agreements risky.

For the narrow band of high-income employees with enforceable agreements, Washington courts apply the reasonableness framework with genuine scrutiny. The King County Superior Court and the federal courts in the Western District of Washington (Seattle) handle most of the state's non-compete litigation and have developed case law that reflects the legislature's employee-protective intent.

Employers who enforce non-competes in Washington tend to be large technology companies, financial services firms, and professional services organizations with high-income employees who had genuine access to trade secrets or critical client relationships. The economics of enforcement are viable only when the employee's departure threatens specific, identifiable competitive harm worth the cost of litigation plus the potential attorney-fee exposure if the employer loses.

What Washington employees should know

If you earn below the income threshold (approximately $120,559 for 2025, adjusted annually), your non-compete is void. You are not bound by it, and if your employer attempts to enforce it, you can recover damages, a $5,000 statutory penalty, and attorney fees.

If you earn above the threshold, your non-compete is enforceable only if it was disclosed before you accepted the job (or supported by independent consideration if presented mid-employment), doesn't exceed 18 months, and satisfies the reasonableness analysis.

If you were laid off, your employer must pay your base salary during the enforcement period or release the non-compete. If the employer isn't paying garden leave, the non-compete is void.

If your agreement designates another state's law, Washington's choice-of-law override applies if you're primarily based in Washington. You're protected by Washington law regardless of the contractual designation.

The national non-compete overview positions Washington in the heavy-restriction category alongside Illinois and Colorado — states that haven't banned non-competes outright but have imposed enough guardrails to make enforcement difficult and expensive for most employers. Washington's combination of income thresholds, duration caps, mandatory garden leave, and fee-shifting makes it one of the most hostile environments for non-compete enforcement in the country.