Q: As an employer, how can I ensure that a non-competition agreement is enforceable with respect to my employees?
A: To be effective and enforceable under Washington law, a non-compete agreement must be equitable and protect the employer's business interests while not unreasonably infringing upon the employee's ability to earn a living. When considering whether a non-compete is enforceable as written, courts determine whether it is reasonable based on the following factors: (i) whether it is necessary to protect the employer's business, (ii) whether the geographic and temporal scope of the agreement are reasonable under the circumstances, and (iii) whether public policy weighs in favor of enforcement of the agreement.
Although reasonable non-competes are currently enforceable under Washington law, the Washington Legislature is currently considering several bills that would render non-competes unenforceable with respect to certain industries and certain types of employees. Given that there will likely be new developments with respect to this area of law in the near future, it is advisable to consult with an experienced attorney to ensure that a non-compete will be enforceable.
Erin Pounds is an attorney at the law firm of Lukins & Annis, where her practice emphasizes business & corporate law, employment law, municipal law, and litigation.
Published in the Journal of Business March 24th, 2016