Two bills addressing noncompetition agreements are moving through the Washington Legislature and could significantly change how employers manage workforce transitions. SB 5437 is scheduled for a hearing in the Senate this week. Its companion measure, HB 1155, is currently in the House Rules Committee and could be considered for floor action.
As written, the bills would prohibit all noncompetition agreements in Washington, including those already in effect. This approach would go well beyond the state’s 2019 noncompetition law, which already established strict limits, income thresholds, and penalties related to enforcement. Under the new proposals, employers would be left with narrower tools such as limited nonsolicitation and confidentiality agreements to protect business interests.
Supporters argue the bills would promote worker mobility and competition in the labor market. Opponents raise concerns about the scope of the change and its impact on employers that rely on noncompetition agreements to protect customer relationships, investments in training, and proprietary business information.
WR opposes the legislation, citing concerns that a full ban would create new challenges for retailers operating in an already competitive and tight labor market. If enacted, retailers would need to adapt quickly to increased employee movement while relying on fewer legal tools to safeguard sensitive information and long-term business relationships.
Lawmakers are expected to continue debating the balance between workforce flexibility and employer protections as the bills move forward. WR will continue to engage with legislators and monitor developments to ensure the retail industry’s perspective is considered.
