On March 13, 2024, Governor Jay Inslee signed SSB 5935, a brand new legislation that modifies and expands the definition of noncompetition covenants (noncompete agreements). We intend to report on some other payments of curiosity to employers which might be signed from the 2024 Washington legislative session in a future e-newsletter.
Starting June 6, 2024, the definition of a noncompetition covenant consists of an settlement that immediately or not directly prohibits the acceptance or transaction of enterprise with a buyer. Current legislation voids a noncompetition covenant except the employer describes the phrases in writing no later than the employee’s acceptance of a job provide. The brand new invoice clarifies that this refers back to the employee’s “preliminary oral or written” acceptance of the provide. As well as, a noncompetition covenant entered into by an worker or unbiased contractor is void if the covenant permits or requires the appliance of any state legislation aside from Washington’s. The legislation additionally limits the scope of a lawful nonsolicitation settlement to incorporate solely present prospects.
Suggestions: We are going to replace our Authorized Information, “Noncompetition Agreements” (3249). Make certain that you perceive the problems surrounding noncompete and nonsolicitation covenants earlier than you draft or implement them. To make sure you are making use of the proper requirements primarily based on the circumstances of every new rent, you must seek the advice of with litigation counsel and ask them to draft a brand new settlement every time. In terms of enforcement of current agreements, your Vigilant Legislation Group employment legal professional may help assess whether or not the settlement complies with the legislation, however your litigation counsel shall be in one of the best place that can assist you strategize how to make sure your enterprise pursuits are finest protected underneath current agreements.
