In the spring of 2019, state legislators overhauled Washington’s non-compete law, which up until then gave employers the power to restrict when and where their former employees could work.
The revamped Non-Compete Act, which went into effect on January 1, 2020, outlaws unfair non-compete agreements that target lower-wage workers by giving them a variety of new protections designed to unlock their economic potential.
What Is A Non-Compete Agreement?
A non-compete agreement is a contract that allows employers to prevent employees who sign the agreement from getting a similar job with a company that competes with their current employer. In other words, employees are restricted from using the job skills they have acquired to seek employment in the same market. The non-compete agreement is particularly restrictive to lower-wage workers who don’t have the luxury to move to a new market or acquire new skills with each job change.
A Non-Compete Case In The Making
Dave Wagner came to Emery Reddy after losing an opportunity to go back to his previous employer because of a non-compete that he was required to sign with Henry Schein Dental, a Fortune 500 company valued at more than $10 billion.
In 2020, Mr. Wagner left his job at Patterson Dental to care for his wife who had been diagnosed with stage-four pancreatic cancer. After his wife’s passing, he took a position with Henry Schein which required him to sign a non-compete that included a clause requiring him to provide it to any other prospective employer.
After receiving a new job offer from Patterson Dental, Mr. Wagner provided them with a non-compete agreement. Upon receipt, they rescinded the job offer. From Emery Reddy’s perspective, the non-compete violation is crystal clear.
Henry Schein has since moved the case from State to Federal and filed a motion to dismiss the complaint. We will file our response in May.
Read more about Mr. Wagner’s story here.
Is Washington’s 2020 Non-Compete Law Retroactive?
Yes, but there are a few caveats. While the law invalidates all non-compete agreements signed before January 1, 2020, aggrieved workers will not be able to sue their employer and collect the $5,000 penalty or damages for a pre-2020 non-compete unless the employer is actively enforcing the agreement. If an employer has its workers or contractors sign a non-compete after January 1, 2020, that violates the new law, can sue and collect financial compensation regardless of whether it’s being enforced.
If you signed a non-compete after January 1, 2020, or have a non-compete agreement that needs to be revoked, revised, or reviewed by a professional, call Emery Reddy. You won’t get better advice.