New Washington state law bans noncompete agreements
seattletimes.com
seattletimes.com
* The buyout clause is between the client and consulting firm and roughly compensates the consulting firm for the lost profit of the rate diff over the remaining term of my contract with the consulting firm.
Great point! NCA are essentially a limitation on your ability to work -- especially in niche industries or fields.
They were banned for employees who made less the $127k/year or contractors who made less than $317k. Those numbers were adjusted annually for inflation.
Edit: less/more mixup fixed
Purchases that wouldn't go through if they didn't reduce competition shouldn't happen anyway. Banning those kinds of restrictions would help with that.
Noncompete shouldn’t be so broad that I couldn’t move to another city and start a lawn care business there, but I shouldn’t be able to compete directly with the business I just sold using my insider information of that business.
That's a merger. You can, not having any business currently, buy yourself into one. In which case the acquisition is purely for the profits.
> I’ve just undercut what I just sold.
No you've just competed with them. If your prices are lower then you've undercut them. If their prices are artificially high then the market, a.k.a. those customers, are the ones to benefit.
> but I shouldn’t be able to compete directly with the business I just sold
Competition is _competition_. You didn't buy a market you bought an opportunity. You still have to compete against everyone else.
> I just sold using my insider information of that business.
Insider information? On a lawn care business that has no issued securities?
Besides, competing would have meant doing exactly the same thing over again. What's the fun in that?
All of the baggage and tech debt gone! THIS TIME WE'LL DO IT RIGHT
Keep in mind the company is probably not refusing to do things because of cost. Often it is because of risk.
A lot of people running businesses have terrible judgement when it comes to risk
The non-competes I've signed have offered 60% of my base pay for six months (the length of the non-compete) if I cannot find a job because of the contract if the company exercise it.
They never have exercised it for me.
The types that are banned are ones that set the restriction as a part of a normal employment contract, where there is no specific compensation given for accepting the non-compete and where the employee can't decide to abandon the non-compete in return for not getting the extra money.
So even if you sign that clause you are not bound by it.
Employees thinking they are subject to legal penalties/fight due to a non-enforceable non-compete gets the company 90% of what they want, anyway, and so to prevent that they should be strongly punished.
Jimmy John's was making its low-level employees sign non-competes, for example. This was ridiculous on its face, and probably wouldn't hold up in court. However, the people affected by it were least able to take it to court.
Partly it was naked power.
Well, it's up to market protection agencies to look at the specifics.
I think the operative principal here is that employees are at a disadvantage w/r to employers. Buyers and sellers are not presumed to be at any disadvantage w/r to each other.
Anyway, that's not related to the employees contracts.
A similar thing is often done during dismissal: sign away your rights to sue for wrongful dismissal in return for severance. In my case, almost a year's worth of pay seemed like a reasonable severance, so I took it and didn't argue.
If you really are a good place to work people will stay. If you really are paying enough for the value you provide, people will stay. If you aren't then people will leave, for the competition likely since that is the industry they know. Non-compete is really just a power play that enables companies to pay employees less and it is an abuse of power.
Learn about the legal principle of “inevitable disclosure”. It’s the idea you can’t work for a competitor because you can’t help yourself but violate an NDA
Which of course, is why unions are what's needed to properly negotiate employee-employer relationships, the same way a strong government is needed to negotiate corporate-civil relationships.
Americans, however, have decided that "individual freedom" is _soooooo_ valuable, that it only exists for people with enough cash to defend it.
It seems these labs are revolving doors, and any kind of breakthrough knowledge would immediately make you incredibly valuable to other labs or incredibly valuable as a spinoff start-up. Never mind these researchers all knowing each other and certainly having more than a few common spaces (digital or IRL). And the excitement of working in a fresh field still littered with low hanging fruit.
I can't help but feel that a large part of the reason why the labs are neck and neck is because everyone is talking to everyone else.
I can't substantiate any of this though, it seems to have largely dodged anything besides internal conversation.
[1] I vacillated between this and California law giving ownership of what you worked on in your own time on your own equipment yours, except the latter was pretty effectively neutered by big corps defining their businesses more vaguely.
TLDR Talk is cheap, work and change is hard and painful (broadly speaking). Observe actions, not words.
[1] https://finance.yahoo.com/news/jpmorgan-ceo-jamie-dimon-says...
Related:
"CEO Said a Thing" Journalism - https://news.ycombinator.com/item?id=47577735 - March 2026
In other words, a completely useless scare tactic.
The take home is dont take tech jobs in states where non-compete clauses are still legal.
But I do agree in general, never take compensation upon leaving a company, for whatever reason. Then everything is certainly unenforceable.
As for leaving the country... even if a non-compete is found to be enforceable (due to you being self-sufficient, or sufficently compensated), then the scope cannot be country wide. It has to be limited to a particular reasonable geography and a particular reasonable field.
The legislation needs to change. The situation as it stands is ripe for barratry and bullying.
> they have to quit now and spend their savings
Every single job offer I’ve seen with a non-compete is a paid non-compete. You get 100% of your base salary and zero bonus. In industries where non-competes are common, people know this. They have savings to deal with reduced income due to zero bonus. There’s a reason why the non-compete period is colloquially known as garden leave. You have enough savings so that you can literally work on your garden. Companies know they need to be patient and plan for hiring needs far in advance. It’s super predictable.
The first part is probably usually true, because places where non-competes are enforceable generally will not enforce them if they are overly broad.
But for tech workers there are almost always other jobs that the worker can qualify for and pay similarly to their old job but are not covered by the non-compete and then then non-competes do get enforced even though the worker is not independently wealthy.
A fairly recent example [1].
[1] https://callaborlaw.com/blog/former-draftkings-employee-lose...
Non-competes have been heavily limited or outright voided in California. That's an easy and obvious rebuttal to the Silicon Valley argument.
U.S. Chamber of Commerce and business groups file lawsuit challenging FTC noncompete ban - https://www.fmglaw.com/employment-law-blog-us/u-s-chamber-of... - April 26th, 2024
> Less than 24 hours later, the U.S. Chamber of Commerce, Business Roundtable, the Texas Association of Business, and the Longview Chamber of Commerce filed a lawsuit against the FTC in the U.S. District Court for the Eastern District of Texas alleging that the consumer protection agency lacks the authority to issue rules that define unfair methods of competition, and instead, the FTC Act only allows it to bring cases challenging particular practices. The Chamber’s Complaint also contends that even if the FTC possessed such authority, the “noncompete rule would still be unlawful because noncompete agreements are not categorically unlawful under Section 5.” The lawsuit further argues that the rule is “impermissibly retroactive” and reflects an “arbitrary and capricious exercise” of the FTC’s power.
> The Chamber of Commerce is seeking an order “vacating and setting aside the noncompete rule in its entirety” and an order permanently enjoining the FTC from enforcing the rule. The plaintiffs are also seeking an order to delay the effective date and implementation of the noncompete ban until the conclusion of the case.
https://www.governance.fyi/i/192862936/who-pulled-the-ladder... ("Who Pulled the Ladder Away") from Marc Andreessen Is Right That AI Isn't Killing Entry-Level Jobs - https://news.ycombinator.com/item?id=47613752 - April 2026
> The noncompete story is more galling. Legal experts describe the period from 1990 to roughly 2010 as the golden age of noncompete enforcement in America. What started as a tool for protecting senior executives’ trade secrets metastasized into a blanket restriction applied to hourly workers, sandwich shop employees, pet cremation technicians. An estimated 30 million Americans, nearly one in five workers, are bound by a noncompete agreement. These agreements directly suppress the mechanism through which the job ladder operates: they prevent employed workers from accepting better offers.
> The FTC, under the Biden administration, attempted a nationwide ban. The estimated effects were large and specific: $400 to $488 billion in increased wages over the next decade, $524 per worker per year in additional earnings, 8,500 new businesses annually, and 17,000 to 29,000 additional patents per year. The rule was struck down in federal court. The Trump administration formally vacated it in September 2025. The FTC has shifted to case-by-case enforcement, including a February 2026 consent order against a pet cremation company that had imposed blanket noncompetes on 1,780 employees, including hourly laborers and drivers. The bipartisan Workforce Mobility Act, reintroduced in June 2025 by Senators Murphy, Young, Cramer, and Kaine, would ban most noncompetes nationwide. It has been referred to committee. No further action has been taken. Over 150 bills have been introduced in more than 35 states, creating a patchwork that varies by jurisdiction. The patchwork is the opposite of the clear nationwide signal that would restore competitive dynamics.
> The graduate scrolling LinkedIn is not competing against chatbots. She is competing against four decades of eroded mobility, in a labor market where the companies that might hire her face less pressure to do so than at any point since the data began. We all spent two years worrying that AI will trap young workers in obsolete careers, if they every get a career in the first place. Meanwhile, noncompete agreements have been legally trapping workers in underpaying jobs for decades, and we barely noticed.
1. lobbyists vying for a company who wants to keep power
2. the legislature having its own vested interest from relationship/deal/lobbying
3. the minority of constituents are the ones who constantly call in and go to townhalls, because they have the time, money, or energy to do so compared to someone who's at work during a townhall.
Best I can do: Non-competes are (possibly) unenforceable anyway, so signing one maybe acts as a value signal for the employee? "I'd have to violate my non-compete, so in order to do that and permanently burn the bridge with my current company, you need to pay me $X + $Y."
Frankly I don't buy it, though, because it assumes too much about the rationality of all actors involved and the savviness of the employee during negotiations.
For many companies, a lot of their value is in their intellectual property. Non-competes exist not because the company will enforce it against employees (they might, but they usually don't), but more as a fig-leaf to potential investors down the line asking about the value of the intellectual property. The argument goes, if someone could easily leave the company with the knowledge earned and go to a competitor, then the investment wouldn't be as valuable.
It makes it possible to confidently buy a business that's mostly or all goodwill. Otherwise the previous owner can simply poach all the clients.
Also lots of jurisdictions allow non-competes as long as the employee is paid for the duration of the non-compete clause. Obvious win there: paid vacation or double up your salary by working for a non-competing firm.
Non-competes on employees without compensation are obviously bad.
It probably depends on the kind of job.
If say Walmart tried to use a noncompete to stop cashiers from going to Target there probably is no reasonable argument in favor of that.
On the other when the employee is a top level executive who knows all the company's trade secrets and all their plans for the next year or so and they want to go to a direct competitor it is hard to see how they won't use that information at the competitor. Even if they scrupulously try to uphold any NDAs they are under and so don't consciously do it stuff will leak.
If the first company sues accusing the second company and/or ex-employee of using such information it can get pretty messy, and consumer judicial resources better used for other things.
A policy then of allowing noncompetes in this situation might overall be beneficial. Top level executives are generally well compensated and should be sufficiently sophisticated financially to understand the consequences of a noncompete and take that into account when deciding on taking the job so having to sit out 6-12 months before taking a directly competing job should not be a serious issue.
Since this is a steelman, what is the rationale for this dynamic needing to be protected? If this employee wants to go to a competitor because they they are getting a better employment deal, why not just try to keep them with your own better employment deal?
Why does it need some forced restriction? I know people aren't perfectly rational market participants, but what besides financial compensation or an enjoyable work environment would compel someone to go to a competitor?
[1] well, as of when I last looked a few years ago
Some community colleges offer technical training, usually in partnership with a certificating body. But in this case the valuation is determined by a mostly independent body.
Regardless, the ruling party has pretty close to a supermajority - over 60% in each house. And also keep in mind, some of the members of the other party are opposition in name only due to the districts where they compete. The share doesn’t really matter - the main issue is that it is overused. There shouldn’t be a hundred emergency clauses in each legislative session.
As for the voters’ constitutional right to repeal - I’ve updated the terminology. From https://www.washingtonpolicy.org/publications/detail/time-to...
> Despite the name, the real reason for these supposed emergencies is not that the state faces some immediate threat. Legislation that includes an emergency clause can only be repealed using an initiative, which requires twice as many signatures as a referendum to put on the ballot for the voters to keep or reject. Referenda also face fewer legal challenges because they consist of a simple up or down vote on a piece of legislation.
It doesn’t change the fact that the abuse of these emergency clauses is anti democratic and an abuse of power
[0] Each state is different here, but a "90 days after end of session", or "90 days after passage" rule for the soonest a passed bill can go into effect, with exceptions for emergency bills with special rules including a supermajority requirement, are pretty common, as are conventions of setting a January 1 effective date in the legislation itself when the minimum is X days from end of session or passage.
It should just be banned for employees or require a payout of (previous salary) * (length of non-compete).
They tend not to benefit the employees, the customers, the competitors and really anyone else besides a small number of people who are already very successful.
It's not like the seller never has an option to say no to the non-compete.
This is as it should be!
There are so many wannabe "New Silicon Valley" alternative areas that are unwilling to copy the non-compete ban, and subsequently fail to compete with the real Silicon Valley. It's a necessary ingredient in my opinion.
Patents provide some protection, but it is flawed because a big company can put you out of business if you get into a patent war. An employee should be able to leave at any time and work for a competitor, but maybe should not do identical work, otherwise startups will have a hard time protecting their IP.
The market should be able to solve this problem without the government setting arbitrary rules, and people should be allowed to sign contracts that limit or restrict their freedom, so long as it involves informed consent from all parties.
If Microsoft wants to hire an AI expert for a million dollars a year, and restrict him from competing for 2 years after leaving Microsoft so as to avoid losing market advantage, that seems like a reasonable thing for Microsoft to want. If all Apple has to do to get all the Copilot secrets is hire the chief copilot engineer for 1.5 million, seems like that creates a toxic dynamic and all but guarantees acquihires and a near immediate turnaround in a startup to corporate pipeline for raiding IP.
Maybe we should be limiting businesses to doing business at a scale they can responsibly handle. If you can't get human customer service for your computer issues because Windows and Mac have scaled far beyond the number of users they could ever hope to handle, maybe that market needs regulation, and unless they scale customer service accordingly, they don't get to target a majority of the world's population as their customer base?
That'd certainly create jobs and opportunities for Linux and induce a revolution in software markets, and it'd limit the incentives for MS and Apple and big tech to do shitty things to suppress the markets overall.
It's also already unlawful to steal another company's assets when you leave. Besides, companies should file provisional patent applications as soon as they invent valuable proprietary technology to prevent the sort of subject matter leakage you mention.
Every time a pro-worker bill passes, there's an endless scree of "But what about the corporations?". Wow it's tiring.