Trade Secrets & Employee Mobility

On January 3, 2025, the Washington State Legislature introduced HB1155 (the “Bill”) that, if passed, would broaden the definition of a “noncompetition covenant” and prohibit all employer-employee noncompete agreements.  The Bill would also seek to clarify the definition of “non-solicitation agreement” under Washington law. On January 13, 2025, the Bill was referred to the House Labor & Workplace Standards Committee where it remains pending.

Washington’s statute restricting the use of noncompetition covenants took effect in 2020, and it was amended in important ways last year.  The current Bill proposes yet more amendments.

If passed, the Bill would amend Revised Code of Washington (RCW) Sections 49.62.005 and 49.62.010 to expand upon the definition of “noncompetition covenant” and notes that the provisions protecting employees and independent contractors must be construed liberally. Under the Bill, a “noncompetition covenant” includes:

On January 1, 2022, amendments to the Illinois Freedom to Work Act, 820 ILCS 90/1, et seq. (the “Act”), became effective, trumpeting reforms and limitations on an employer’s ability to enter into covenants not to compete and covenants not to solicit with certain categories of employees whose actual or expected annualized rate of earnings fall below certain thresholds.

Now, just two short years later, the Illinois state legislature has introduced four different bills containing proposed amendments to the Act that would undermine, if not completely obliterate, the Act’s ...

As federal administrative agencies wade further into rulemaking and adjudicative efforts to outlaw noncompetes and restrictive covenants, defendants are beginning to raise preemption arguments in response to state court breach of contract claims on the topic.

A recent case shows defendants are taking things into their own hands and not waiting for the Federal Trade Commission (“FTC”) to conclude its announced rulemaking on the subject or for the National Labor Relations Board (“NLRB”) to rule on the NLRB General Counsel’s stated position that nearly all noncompetes ...

Our colleagues Peter A. Steinmeyer, Erik W. Weibust, and Angel A. Perez, attorneys at Epstein Becker Green, co-authored a 2022 Thomson Reuters Practical Law Practice Note titled “Ethical Issues for Attorneys Related to Restrictive Covenants.”

Following is an excerpt (see below to download the full version in PDF format):

Maryland recently joined the ranks of states with laws limiting the enforcement of non-compete agreements against low wage workers.  Maryland’s recently enacted law (SB 328) bars employers from enforcing non-compete agreements against workers earning less than or equal to $15 per hour or $31,200 per annum.

In a nod to employers, the statute is carefully worded to protect low wage workers exclusively and “may not be construed to affect a determination by a court in an action involving” an employee whose earnings exceed both $15 per hour and $31,200 per annum.  The statute only ...