But the new non-competition clause has an answer. The new law nullifies any non-compete clause that requires an employee or independent contractor to rule on a non-compete code outside of Washington. It also cancels any non-compete obligation that deprives an employee or an independent contract of the protection or benefits of this chapter. 3. Would the application of the non-compete obligation create an opportunity to harm the public? In general, the tripartite examination of the adequacy of a duty not to compete asked whether the restriction is necessary to protect the business or the employer`s goodwill, (2) whether it imposes on the employee a greater constraint than is reasonably necessary to secure the business or the employer`s goodwill, and (3) whether the performance of the agreement would harm the public by losing the employee`s service and skills in the to the extent that the court should not apply it by the Confederation, i.e. if it violates public policy. Perry v. Moran, 109 Wash.2d 691, 698, 748 P.2d 224 (1987), amended. for other reasons, 111 Wash.2d 885, 766 P.2d 1096 (1989).
In fact, it prescribes an 18-month period for non-competitions. The high burden of proof required to demonstrate the need for a longer non-compete obligation, combined with the uncertainty and cost of litigation, will discourage almost all employers from trying to include a longer non-compete obligation in the agreement. The law obliges employers to inform the employee of the conditions of the non-competition obligation in writing and at the latest at the time the employee accepts the job offer. If you do not do so, the agreement will become invalid. Therefore, employers should ensure that the exact terms of the non-compete obligation are included in the letter of offer to the prospective employee, even if the non-compete language is included in other employment-related agreements, such as a confidentiality and ownership agreement. Note: The law also provides for a period of 3 days for non-competitions related to performers such as musicians. Senate Bill ESSB 5478 highlights the reasons for this, noting that «in the music industry, non-compete clauses or ban data paralyze the ability to cobble together their livelihoods every year.» Regardless of income, a non-compete obligation under section 49.62 of the RCW is now void and unenforceable unless the employer notifies the employee in writing of the terms of the non-compete obligation before the employee accepts the offer of employment. RCW 49.62.020(1)(a)(i). This should have the practical effect of excluding attempts by employers to circumvent the limits of the new non-compete obligation by relying on the laws of another State, since any difference in the law of another State that deprives an employee of the protection or benefits of Washington`s non-compete obligation would result in the nullity of the non-compete obligation. The new non-competition clause has an answer to this problem – a mandatory «garden holiday» for employers who have been fired.
Moreover, prior to the new non-compete obligation, if employers wrote an excessively broad non-compete obligation, the court was free to use the «blue pencil test,» meaning it could simply rewrite the provision into something «reasonable» and there would be no penalty for the employer if it had a very broad geographic scope or duration. As a result, employers have been encouraged to develop very broad non-compete clauses without fear of legal sanctions. As explained in more detail below, this is no longer the case. At present, Washington employers have little reason to draft narrowly tailored non-compete clauses. Indeed, when courts in Washington are faced with an overly broad non-competition clause, rather than simply refusing to apply the clause, they usually rewrite the clause to be narrower, and then apply the amended version. If you signed a non-compete agreement after January 1, 2020 or if you have a non-compete obligation that needs to be revoked, reviewed or reviewed by a professional, call Emery Reddy. You won`t get better advice. One of the characteristics of the law is the presumption that any non-compete obligation exceeding 18 months after employment is inappropriate and unenforceable.
This presumption can be rebutted, but only by clear and convincing evidence (a fairly high burden of proof) that a longer period is necessary to protect the business or goodwill of the party. Many employers try to mitigate or avoid such threats to their business by contracting non-compete obligations with their new employees. As mentioned earlier, the length of time before the new law was analyzed on a case-by-case basis to determine whether it was appropriate. Now, according to RCW 49.62, there is a rebuttable presumption that non-compete obligations longer than eighteen (18) months are considered inappropriate unless the employer can demonstrate through clear and convincing evidence that a longer term is necessary. A non-compete obligation prevents a former employee from working for another company in the same sector. On the other hand, the ban on poaching only limits the extent to which they can compete with their former employer. The employee can still hold another job in the same industry and geographical area, which he could not do with a non-compete obligation. Not all non-compete obligations are practical, proportionate or fair.
The court has the right to decide whether a non-compete obligation is appropriate and therefore valid or not. When deciding whether or not to maintain a non-compete obligation, the following concerns must be taken into account: Colin F. McHugh is an employment lawyer in Vancouver, Washington, and has reviewed, drafted, litigated, negotiated and reviewed numerous employment contracts with non-compete obligations and other restrictive agreements. Non-competition clauses are legal and enforceable in washington state. Different industries may have their own rules on non-compete obligations and related measures that are acceptable. For example, the RCW regulates 49,44,200 non-compete obligations in the broadcasting sector. The Washington State Department of Labor and Industry regulates and enforces all matters relating to labor and related matters in the state. For more information on non-compete obligations and other parts of employment contracts, please contact our law firm.
For example, a former employee who signed a non-solicitation agreement could not legally request business from his former employer`s clients for a certain period of time.
