6 ms·

New Washington state law bans noncompete agreements

337 points by toomuchtodo 7mo ago

toomuchtodo 7mo ago
https://app.leg.wa.gov/RCW/default.aspx?cite=49.62 https://app.leg.wa.gov/RCW/default.aspx?cite=49.62 https://eig.org/state-noncompete-map/ https://eig.org/state-noncompete-map/
mitchbob 7mo ago
https://archive.ph/2026.03.27-223204/https://www.seattletimes.com/business/local-business/new-washington-law-bans-noncompete-agreements/ https://archive.ph/2026.03.27-223204/https://www.seattletime...
sheikhnbake 7mo ago
Big ups for pro-working class legislation
Analemma_ 7mo ago
It always baffles me how much resistance there is to banning noncompetes every time this is proposed, and how that resistance lives right alongside “we want to be the next Silicon Valley”, even though pretty much every analysis of “what’s Silicon Valley’s secret sauce” cites the unenforceability of noncompetes as one of the most important factors. But maybe the ship is turning very slowly.
- toomuchtodo 7mo ago
  People in control of orgs and capital want to telegraph thought leadership via "we want to be the next Silicon Valley" without actually giving up control of workers or making the necessary system changes. For a parallel, see how Jamie Dimon says "AI could help bring about the 4 day work week." [1] Is JPMorgan Chase trying to move to a 4 day work week? No, of course not. Jamie likes to be important and have his proclamations disseminated, not actually make the change being used to chase clout and status (because once wealthy, there is nothing left to chase if one wants to chase something). TLDR Talk is cheap, work and change is hard and painful (broadly speaking). Observe actions, not words. [1] https://finance.yahoo.com/news/jpmorgan-ceo-jamie-dimon-says-183041637.html https://finance.yahoo.com/news/jpmorgan-ceo-jamie-dimon-says... Related: "CEO Said a Thing" Journalism - https://news.ycombinator.com/item?id=47577735 https://news.ycombinator.com/item?id=47577735 - March 2026
- anon291 7mo ago
  Non-competes are almost always unenforceable. Never take money (although even then, they're still mostly useless), and just ignore them and no one is going to do anything. That was what my business law professor taught us. No court is going to enforce a non-compete if it means the person who cannot compete is going to be unable to support themselves. The only time it'll be enforced is if you're already independently wealthy. In other words, a completely useless scare tactic.
  - ramraj07 7mo ago
    I know at least one person who joined a Michigan startup, moved over, got sued by non compete, and the new employer just didnt want any hassle and laid them off. This person had to leave country then. The take home is dont take tech jobs in states where non-compete clauses are still legal.
    - anon291 7mo ago
      Sue them back. Represent yourself. Get compensatory damages. They will lose unless you can support yourself. Do you think any state is going to let someone go on unemployment and withdraw from the public dole just because some private company wants to gain some competitive advantage. Lol But I do agree in general, never take compensation upon leaving a company, for whatever reason. Then everything is certainly unenforceable. As for leaving the country... even if a non-compete is found to be enforceable (due to you being self-sufficient, or sufficently compensated), then the scope cannot be country wide. It has to be limited to a particular reasonable geography and a particular reasonable field.
  - mwigdahl 7mo ago
    The problem is it won't get as far as trial, if the old company gets wind of it early enough (and they often do). The old company will reach out to the new company and politely inform them they believe they have grounds for a noncompete suit. The new company will either indemnify the worker, or (far more often) drop them as not worth the hassle, and take their #2 choice. The legislation needs to change. The situation as it stands is ripe for barratry and bullying.
- Aurornis 7mo ago
  Is there actually substantial resistance to this? Or just a few manufactured counter-arguments from news outlets trying to do a both-sides take on this? Non-competes have been heavily limited or outright voided in California. That's an easy and obvious rebuttal to the Silicon Valley argument.
  - toomuchtodo 7mo ago
    Yes. The US Chamber of Commerce is particularly noteworthy in their attempts to slow the deployment of this policy at scale. They of course act on behalf of their members as a reputational laundering operation, so their members do not have to engage in this lobbying directly (potentially exposing them to reputational risk). U.S. Chamber of Commerce and business groups file lawsuit challenging FTC noncompete ban - https://www.fmglaw.com/employment-law-blog-us/u-s-chamber-of-commerce-and-business-groups-file-lawsuit-challenging-ftc-noncompete-ban/ https://www.fmglaw.com/employment-law-blog-us/u-s-chamber-of... - April 26th, 2024 > Less than 24 hours later, the U.S. Chamber of Commerce, Business Roundtable, the Texas Association of Business, and the Longview Chamber of Commerce filed a lawsuit against the FTC in the U.S. District Court for the Eastern District of Texas alleging that the consumer protection agency lacks the authority to issue rules that define unfair methods of competition, and instead, the FTC Act only allows it to bring cases challenging particular practices. The Chamber’s Complaint also contends that even if the FTC possessed such authority, the “noncompete rule would still be unlawful because noncompete agreements are not categorically unlawful under Section 5.” The lawsuit further argues that the rule is “impermissibly retroactive” and reflects an “arbitrary and capricious exercise” of the FTC’s power. > The Chamber of Commerce is seeking an order “vacating and setting aside the noncompete rule in its entirety” and an order permanently enjoining the FTC from enforcing the rule. The plaintiffs are also seeking an order to delay the effective date and implementation of the noncompete ban until the conclusion of the case.
  - deleted 7mo ago
    [deleted]
  - toomuchtodo 7mo ago
    Additional citation: https://www.governance.fyi/i/192862936/who-pulled-the-ladder-away https://www.governance.fyi/i/192862936/who-pulled-the-ladder... ("Who Pulled the Ladder Away") from Marc Andreessen Is Right That AI Isn't Killing Entry-Level Jobs - https://news.ycombinator.com/item?id=47613752 https://news.ycombinator.com/item?id=47613752 - April 2026 > The noncompete story is more galling. Legal experts describe the period from 1990 to roughly 2010 as the golden age of noncompete enforcement in America. What started as a tool for protecting senior executives’ trade secrets metastasized into a blanket restriction applied to hourly workers, sandwich shop employees, pet cremation technicians. An estimated 30 million Americans, nearly one in five workers, are bound by a noncompete agreement. These agreements directly suppress the mechanism through which the job ladder operates: they prevent employed workers from accepting better offers. > The FTC, under the Biden administration, attempted a nationwide ban. The estimated effects were large and specific: $400 to $488 billion in increased wages over the next decade, $524 per worker per year in additional earnings, 8,500 new businesses annually, and 17,000 to 29,000 additional patents per year. The rule was struck down in federal court. The Trump administration formally vacated it in September 2025. The FTC has shifted to case-by-case enforcement, including a February 2026 consent order against a pet cremation company that had imposed blanket noncompetes on 1,780 employees, including hourly laborers and drivers. The bipartisan Workforce Mobility Act, reintroduced in June 2025 by Senators Murphy, Young, Cramer, and Kaine, would ban most noncompetes nationwide. It has been referred to committee. No further action has been taken. Over 150 bills have been introduced in more than 35 states, creating a patchwork that varies by jurisdiction. The patchwork is the opposite of the clear nationwide signal that would restore competitive dynamics. > The graduate scrolling LinkedIn is not competing against chatbots. She is competing against four decades of eroded mobility, in a labor market where the companies that might hire her face less pressure to do so than at any point since the data began. We all spent two years worrying that AI will trap young workers in obsolete careers, if they every get a career in the first place. Meanwhile, noncompete agreements have been legally trapping workers in underpaying jobs for decades, and we barely noticed.
- johnnyanmac 7mo ago
  There's a lot of opposition to pretty much any nigh objectively good thing for the people. Just follow the money. It usually comes down to 1. lobbyists vying for a company who wants to keep power 2. the legislature having its own vested interest from relationship/deal/lobbying 3. the minority of constituents are the ones who constantly call in and go to townhalls, because they have the time, money, or energy to do so compared to someone who's at work during a townhall.
- remarkEon 7mo ago
  What's the actual steel man argument for why noncompetes are good? I've never really encountered one, just seen the corporate advocacy that they don't want to deal with high employee turnover. Best I can do: Non-competes are (possibly) unenforceable anyway, so signing one maybe acts as a value signal for the employee? "I'd have to violate my non-compete, so in order to do that and permanently burn the bridge with my current company, you need to pay me $X + $Y." Frankly I don't buy it, though, because it assumes too much about the rationality of all actors involved and the savviness of the employee during negotiations.
  - jkingsbery 7mo ago
    I am glad most places are getting rid of non-competes. But here is the best argument I've heard for them: For many companies, a lot of their value is in their intellectual property. Non-competes exist not because the company will enforce it against employees (they might, but they usually don't), but more as a fig-leaf to potential investors down the line asking about the value of the intellectual property. The argument goes, if someone could easily leave the company with the knowledge earned and go to a competitor, then the investment wouldn't be as valuable.
    - remarkEon 7mo ago
      Okay this I do buy, but that would only explain non-competes for startups, right?
  - dismalaf 7mo ago
    > What's the actual steel man argument for why noncompetes are good? It makes it possible to confidently buy a business that's mostly or all goodwill. Otherwise the previous owner can simply poach all the clients. Also lots of jurisdictions allow non-competes as long as the employee is paid for the duration of the non-compete clause. Obvious win there: paid vacation or double up your salary by working for a non-competing firm. Non-competes on employees without compensation are obviously bad.
  - tzs 7mo ago
    > What's the actual steel man argument for why noncompetes are good? It probably depends on the kind of job. If say Walmart tried to use a noncompete to stop cashiers from going to Target there probably is no reasonable argument in favor of that. On the other when the employee is a top level executive who knows all the company's trade secrets and all their plans for the next year or so and they want to go to a direct competitor it is hard to see how they won't use that information at the competitor. Even if they scrupulously try to uphold any NDAs they are under and so don't consciously do it stuff will leak. If the first company sues accusing the second company and/or ex-employee of using such information it can get pretty messy, and consumer judicial resources better used for other things. A policy then of allowing noncompetes in this situation might overall be beneficial. Top level executives are generally well compensated and should be sufficiently sophisticated financially to understand the consequences of a noncompete and take that into account when deciding on taking the job so having to sit out 6-12 months before taking a directly competing job should not be a serious issue.
- coredog64 7mo ago
  Personally I think the way to go about this isn't to ban non-compete agreements but instead to get a couple of highly public cases where said non-compete is voided because the employee didn't receive anything of value for it. Once case law is clear that it requires 80% of the employees salary for the term of the lockup, companies will only require it where it makes sense rather than applying it willy-nilly due to the essentially free nature.
lateforwork 7mo ago
The flip side should be considered as well. There should be some sort of protection for small startup companies. A big company should not be able to steal an innovative startup's technology by hiring away the employees that worked on the product. That used to happen a lot when Bill Gates was running Microsoft, for example. Patents provide some protection, but it is flawed because a big company can put you out of business if you get into a patent war. An employee should be able to leave at any time and work for a competitor, but maybe should not do identical work, otherwise startups will have a hard time protecting their IP.
- kccqzy 7mo ago
  This is not a mechanism to protect startups. This is a mechanism to protect the flow of ideas, whether the ideas are flowing from a big company to a startup or vice versa. Workers who find a big company bureaucratic should be able to launch a startup. Workers who find a small startup insufficiently resourceful should also join a big company to get resources.
- observationist 7mo ago
  Companies need to put more care into who they trust, and maybe incentivize skin in the game. If leaving for a competitor means you lose equity, agency, ownership, or some intangible, that can outweigh bigger paychecks. The market should be able to solve this problem without the government setting arbitrary rules, and people should be allowed to sign contracts that limit or restrict their freedom, so long as it involves informed consent from all parties. If Microsoft wants to hire an AI expert for a million dollars a year, and restrict him from competing for 2 years after leaving Microsoft so as to avoid losing market advantage, that seems like a reasonable thing for Microsoft to want. If all Apple has to do to get all the Copilot secrets is hire the chief copilot engineer for 1.5 million, seems like that creates a toxic dynamic and all but guarantees acquihires and a near immediate turnaround in a startup to corporate pipeline for raiding IP. Maybe we should be limiting businesses to doing business at a scale they can responsibly handle. If you can't get human customer service for your computer issues because Windows and Mac have scaled far beyond the number of users they could ever hope to handle, maybe that market needs regulation, and unless they scale customer service accordingly, they don't get to target a majority of the world's population as their customer base? That'd certainly create jobs and opportunities for Linux and induce a revolution in software markets, and it'd limit the incentives for MS and Apple and big tech to do shitty things to suppress the markets overall.
jeffreyrogers 7mo ago
The only time I see non-competes as reasonable is when someone sells a business. It seems fair to put a territory restriction on a seller so the new owner doesn't have to immediately start competing against the person they bought out.
- NewJazz 7mo ago
  Isn't that doable via stay on and holdback clauses?
  - dylan604 7mo ago
    I think every company with contracts like this should have a well furnished roof for these employees to hang out during the day
- josephg 7mo ago
  Why? They started one successful business. It seems good for society if they go on to start another.
  - bs7280 7mo ago
    Why would I buy a business if the person im buying it from is just going to create a new one to compete with me?
    - genthree 7mo ago
      To have own the business? Purchases that wouldn't go through if they didn't reduce competition shouldn't happen anyway. Banning those kinds of restrictions would help with that.
  - cowsandmilk 7mo ago
    Often an acquisition of a company is for the set of customers. If I sell my lawn care business and then turn around and email all my former clients offering them lawn care via my new company, I’ve just undercut what I just sold. Noncompete shouldn’t be so broad that I couldn’t move to another city and start a lawn care business there, but I shouldn’t be able to compete directly with the business I just sold using my insider information of that business.
softwaredoug 7mo ago
It’s not the noncompetes that’s the problem, it’s confidentiality agreements with extremely broad language. Learn about the legal principle of “inevitable disclosure”. It’s the idea you can’t work for a competitor because you can’t help yourself but violate an NDA
- cyanydeez 7mo ago
  Inevitably, it's just the need for lawyers to intervene in "common sense" negotiations. It's never legal to do X, Y, Z, but if the business has all the lawyers and the employee has non, then it doesn't really matter whats legal; it's whose willing to exhaust the cash to fight the issue. Which of course, is why unions are what's needed to properly negotiate employee-employer relationships, the same way a strong government is needed to negotiate corporate-civil relationships. Americans, however, have decided that "individual freedom" is _soooooo_ valuable, that it only exists for people with enough cash to defend it.
- wbl 7mo ago
  Have fun trying that in CA.
- WarmWash 7mo ago
  I haven't heard much about it, but I am incredibly curious about how this is currently shaking out in the AI craze. It seems these labs are revolving doors, and any kind of breakthrough knowledge would immediately make you incredibly valuable to other labs or incredibly valuable as a spinoff start-up. Never mind these researchers all knowing each other and certainly having more than a few common spaces (digital or IRL). And the excitement of working in a fresh field still littered with low hanging fruit. I can't help but feel that a large part of the reason why the labs are neck and neck is because everyone is talking to everyone else. I can't substantiate any of this though, it seems to have largely dodged anything besides internal conversation.
  - ralph84 7mo ago
    They're all in California where the law is very pro-employee. As long as you're not taking actual documents or code with you, there's nothing your former employer can do about what's in your head.
matthest 7mo ago
A win for Adam Smith capitalism.
- jkingsbery 7mo ago
  Not sure if this is meant sarcastically or not, but it is - it helps reduce transaction costs of changing employers. Anyone who has ever signed a contract with wide non-competes knows that it is hard for an individual to negotiate against it on an individual basis, but they are rarely enforced in practice, which leaves open individuals to worries about "maybe I'm one of the unlucky few?" These clauses then primarily only increased transaction costs, so eliminating them aids free exchange.
  - matthest 7mo ago
    Not sarcastic. Anything that helps keep markets optimally competitive is good for capitalism.
otterley 7mo ago
Why wait until 2027, instead of making it effective immediately?
- SilverElfin 7mo ago
  Especially when WA’s ruling party regularly uses false ‘emergency’ declarations to make new laws become effective immediately and because this lets them make new legislation immune to voter referendums (yes they abuse this loophole all the time). They could do the same here. If they don’t, it’s a choice made on purpose.
  - dragonwriter 7mo ago
    Washington has a 2/3 threshold in both houses of the legislature to pass emergency legislation, and the majority party is short of a 2/3 supermajority in both houses, so it is actually impossible for them to unilaterally pass emergency bills. Also, emergency laws in Washington are not immune to initiative (repeal or amendment by subsequent laws passed by the voters), but are immune to referendum (popular veto by the voters before going into effect).
    - SilverElfin 7mo ago
      Where are you seeing that emergency clauses need a 2/3 majority in each house? I thought they require a simple majority. Regardless, the ruling party has pretty close to a supermajority - over 60% in each house. And also keep in mind, some of the members of the other party are opposition in name only due to the districts where they compete. The share doesn’t really matter - the main issue is that it is overused. There shouldn’t be a hundred emergency clauses in each legislative session. As for the voters’ constitutional right to repeal - I’ve updated the terminology. From https://www.washingtonpolicy.org/publications/detail/time-to-limit-emergency-clauses-and-give-voters-a-choice https://www.washingtonpolicy.org/publications/detail/time-to... > Despite the name, the real reason for these supposed emergencies is not that the state faces some immediate threat. Legislation that includes an emergency clause can only be repealed using an initiative, which requires twice as many signatures as a referendum to put on the ballot for the voters to keep or reject. Referenda also face fewer legal challenges because they consist of a simple up or down vote on a piece of legislation. It doesn’t change the fact that the abuse of these emergency clauses is anti democratic and an abuse of power
dismalaf 7mo ago
This feels a tad heavy-handed and will make it tougher to sell a business without hard assets. It should just be banned for employees or require a payout of (previous salary) * (length of non-compete).
- colechristensen 7mo ago
  As the years go buy I'm gradually more and more in favor of restrictions to sell businesses. They tend to benefit two groups: the people running a successful business and the people running the even more successful businesses buying them. They tend not to benefit the employees, the customers, the competitors and really anyone else besides a small number of people who are already very successful.
  - dismalaf 7mo ago
    Not all businesses are wildly successful. Some are just successful enough to provide a single family with a middle class income. For some people, selling that is their only hope of retirement. It's not like the seller never has an option to say no to the non-compete.
  - BurningFrog 7mo ago
    All voluntary transactions benefits both buyer and seller. This is as it should be!
    - throwaway85825 7mo ago
      And the government exists to safeguard the benefit of the broader public. Not all transactions are legal.
  - logicchains 7mo ago
    Then nobody creates businesses in your state and everyone there loses. What person in their right mind would invest their time and money into a business they wouldn't be able to sell?
  - 7mo ago
SilverElfin 7mo ago
WA has bigger problems like crazy overspending at the state level and many cities, leading to a spiral of new taxes, even if they are unconstitutional (at the state level). This new noncompete law won’t be enough to make the state more attractive to workers and businesses. It has nothing to really offer above California.
tzs 7mo ago
The article covers this, but probably worth having it mentioned here too: Washington already had partially banned noncompete agreements. They were banned for employees who made less the $127k/year or contractors who made less than $317k. Those numbers were adjusted annually for inflation. Edit: less/more mixup fixed
- curuinor 7mo ago
  Less than, not more than
Beestie 7mo ago
A clause I frequently see (as one who performs a lot of contract work) is a restriction on accepting an offer of employment from the client of the consulting firm I'm contracting with. Whenever I see this clause, I redline it out and advise the consulting firm to fashion a buyout clause* with the client. I'm very firm that the consulting firm cannot restrict my employment opportunities. * The buyout clause is between the client and consulting firm and roughly compensates the consulting firm for the lost profit of the rate diff over the remaining term of my contract with the consulting firm.
- hx8 7mo ago
  I've had a buyout clause used while consulting before. The company was ending their relationship with the contracting company and wanted to keep a handful of individuals.
  - nickff 7mo ago
    From what I understand, the contracting firms don't like (reasonably-priced) buyouts because it allows clients to cherry-pick the best 'talent', and basically use the contractor as a 'farm team'.
    - 93po 7mo ago
      yes, it's unfortunately common for employers to abuse their workers by keeping their pay and work conditions as awful as possible and using any means possible to prevent them from leaving to better conditions and pay
- ConradKilroy 7mo ago
  wow, I've learned so much from your post, owe you big time!
- catcowcostume 7mo ago
  > I'm very firm that the consulting firm cannot restrict my employment opportunities. Great point! NCA are essentially a limitation on your ability to work -- especially in niche industries or fields.
ChuckMcM 7mo ago
If you had asked me in 1995 what was the one thing[1] that Boston could change in order to compete with Silicon Valley I would have told you "Make non-compete agreements illegal" Companies in the Bay Area whined about it all the time but it kept the ecosystem vibrant and a lot of technology exists because of that. In the late 90's early '00s a big reason for a lot of 'high profile' people quitting their cushy job and setting out in a startup was because 'management' wouldn't allow them to move forward on an idea that they felt would "disrupt our own business." Those same people could quit, create a start up, and make that idea real anyway. So this is excellent progress for Washington State. I wonder how many ex-Microsoft employees this effects. [1] I vacillated between this and California law giving ownership of what you worked on in your own time on your own equipment yours, except the latter was pretty effectively neutered by big corps defining their businesses more vaguely.
- gautamcgoel 7mo ago
  Wait, I'm confused. Do you mean Boston should have made non-compete agreements illegal?
  - ChuckMcM 7mo ago
    Yes. At the time, non-compete agreements were legal (and commonplace) in Massachusetts. I haven't followed the Boston tech news for a decade so they may have changed that. But I had this exact conversation with Senator Ed Markey who was a congressman at the time. He was in the Bay Area and I was one of the people who were invited to a dinner he held on "Technology and Innovation."
    - deleted 7mo ago
      [deleted]
  - Twirrim 7mo ago
    Massachusetts used to be one of the most favourable states for non-compete agreements, with strong legal protection and support, favouring companies. Not sure if that has changed since the last time I looked (been a few years).
charcircuit 7mo ago
I think it's reasonable to prevent your employee from working for your competitor at the same time they are working for you. Or even an employee creating a startup themselves with AI and then mailing all of your clients.
jmward01 7mo ago
I was just forced to sign one of these after already being employed. I, very clearly, pointed out that I didn't actually agree but that I needed a job. Often people don't see these things until it is too late to back out like at on-boarding or even later, as in my case. It is bad enough to have non-compete clauses, they are evil and should be banned, but then to sneak/force them after as if your employment is a TOS that can be changed at any time is beyond wrong. If you really are a good place to work people will stay. If you really are paying enough for the value you provide, people will stay. If you aren't then people will leave, for the competition likely since that is the industry they know. Non-compete is really just a power play that enables companies to pay employees less and it is an abuse of power.
silexia 7mo ago
I am moving my business out of state because of this. Already had a problem with this, I had an employee stealing clients and he even said on a recording he made for his roommate and the roommate made me that he stole them. You can not run a business in Democrat states anymore.

337 points by toomuchtodo 7mo ago

https://app.leg.wa.gov/RCW/default.aspx?cite=49.62 https://app.leg.wa.gov/RCW/default.aspx?cite=49.62 https://eig.org/state-noncompete-map/ https://eig.org/state-noncompete-map/

mitchbob 7mo ago

https://archive.ph/2026.03.27-223204/https://www.seattletimes.com/business/local-business/new-washington-law-bans-noncompete-agreements/ https://archive.ph/2026.03.27-223204/https://www.seattletime...

sheikhnbake 7mo ago

Big ups for pro-working class legislation

Analemma_ 7mo ago

It always baffles me how much resistance there is to banning noncompetes every time this is proposed, and how that resistance lives right alongside “we want to be the next Silicon Valley”, even though pretty much every analysis of “what’s Silicon Valley’s secret sauce” cites the unenforceability of noncompetes as one of the most important factors. But maybe the ship is turning very slowly.

toomuchtodo 7mo ago
People in control of orgs and capital want to telegraph thought leadership via "we want to be the next Silicon Valley" without actually giving up control of workers or making the necessary system changes. For a parallel, see how Jamie Dimon says "AI could help bring about the 4 day work week." [1] Is JPMorgan Chase trying to move to a 4 day work week? No, of course not. Jamie likes to be important and have his proclamations disseminated, not actually make the change being used to chase clout and status (because once wealthy, there is nothing left to chase if one wants to chase something). TLDR Talk is cheap, work and change is hard and painful (broadly speaking). Observe actions, not words. [1] https://finance.yahoo.com/news/jpmorgan-ceo-jamie-dimon-says-183041637.html https://finance.yahoo.com/news/jpmorgan-ceo-jamie-dimon-says... Related: "CEO Said a Thing" Journalism - https://news.ycombinator.com/item?id=47577735 https://news.ycombinator.com/item?id=47577735 - March 2026
anon291 7mo ago
Non-competes are almost always unenforceable. Never take money (although even then, they're still mostly useless), and just ignore them and no one is going to do anything. That was what my business law professor taught us. No court is going to enforce a non-compete if it means the person who cannot compete is going to be unable to support themselves. The only time it'll be enforced is if you're already independently wealthy. In other words, a completely useless scare tactic.
- ramraj07 7mo ago
  I know at least one person who joined a Michigan startup, moved over, got sued by non compete, and the new employer just didnt want any hassle and laid them off. This person had to leave country then. The take home is dont take tech jobs in states where non-compete clauses are still legal.
  - anon291 7mo ago
    Sue them back. Represent yourself. Get compensatory damages. They will lose unless you can support yourself. Do you think any state is going to let someone go on unemployment and withdraw from the public dole just because some private company wants to gain some competitive advantage. Lol But I do agree in general, never take compensation upon leaving a company, for whatever reason. Then everything is certainly unenforceable. As for leaving the country... even if a non-compete is found to be enforceable (due to you being self-sufficient, or sufficently compensated), then the scope cannot be country wide. It has to be limited to a particular reasonable geography and a particular reasonable field.
- mwigdahl 7mo ago
  The problem is it won't get as far as trial, if the old company gets wind of it early enough (and they often do). The old company will reach out to the new company and politely inform them they believe they have grounds for a noncompete suit. The new company will either indemnify the worker, or (far more often) drop them as not worth the hassle, and take their #2 choice. The legislation needs to change. The situation as it stands is ripe for barratry and bullying.
Aurornis 7mo ago
Is there actually substantial resistance to this? Or just a few manufactured counter-arguments from news outlets trying to do a both-sides take on this? Non-competes have been heavily limited or outright voided in California. That's an easy and obvious rebuttal to the Silicon Valley argument.
- toomuchtodo 7mo ago
  Yes. The US Chamber of Commerce is particularly noteworthy in their attempts to slow the deployment of this policy at scale. They of course act on behalf of their members as a reputational laundering operation, so their members do not have to engage in this lobbying directly (potentially exposing them to reputational risk). U.S. Chamber of Commerce and business groups file lawsuit challenging FTC noncompete ban - https://www.fmglaw.com/employment-law-blog-us/u-s-chamber-of-commerce-and-business-groups-file-lawsuit-challenging-ftc-noncompete-ban/ https://www.fmglaw.com/employment-law-blog-us/u-s-chamber-of... - April 26th, 2024 > Less than 24 hours later, the U.S. Chamber of Commerce, Business Roundtable, the Texas Association of Business, and the Longview Chamber of Commerce filed a lawsuit against the FTC in the U.S. District Court for the Eastern District of Texas alleging that the consumer protection agency lacks the authority to issue rules that define unfair methods of competition, and instead, the FTC Act only allows it to bring cases challenging particular practices. The Chamber’s Complaint also contends that even if the FTC possessed such authority, the “noncompete rule would still be unlawful because noncompete agreements are not categorically unlawful under Section 5.” The lawsuit further argues that the rule is “impermissibly retroactive” and reflects an “arbitrary and capricious exercise” of the FTC’s power. > The Chamber of Commerce is seeking an order “vacating and setting aside the noncompete rule in its entirety” and an order permanently enjoining the FTC from enforcing the rule. The plaintiffs are also seeking an order to delay the effective date and implementation of the noncompete ban until the conclusion of the case.
- deleted 7mo ago
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- toomuchtodo 7mo ago
  Additional citation: https://www.governance.fyi/i/192862936/who-pulled-the-ladder-away https://www.governance.fyi/i/192862936/who-pulled-the-ladder... ("Who Pulled the Ladder Away") from Marc Andreessen Is Right That AI Isn't Killing Entry-Level Jobs - https://news.ycombinator.com/item?id=47613752 https://news.ycombinator.com/item?id=47613752 - April 2026 > The noncompete story is more galling. Legal experts describe the period from 1990 to roughly 2010 as the golden age of noncompete enforcement in America. What started as a tool for protecting senior executives’ trade secrets metastasized into a blanket restriction applied to hourly workers, sandwich shop employees, pet cremation technicians. An estimated 30 million Americans, nearly one in five workers, are bound by a noncompete agreement. These agreements directly suppress the mechanism through which the job ladder operates: they prevent employed workers from accepting better offers. > The FTC, under the Biden administration, attempted a nationwide ban. The estimated effects were large and specific: $400 to $488 billion in increased wages over the next decade, $524 per worker per year in additional earnings, 8,500 new businesses annually, and 17,000 to 29,000 additional patents per year. The rule was struck down in federal court. The Trump administration formally vacated it in September 2025. The FTC has shifted to case-by-case enforcement, including a February 2026 consent order against a pet cremation company that had imposed blanket noncompetes on 1,780 employees, including hourly laborers and drivers. The bipartisan Workforce Mobility Act, reintroduced in June 2025 by Senators Murphy, Young, Cramer, and Kaine, would ban most noncompetes nationwide. It has been referred to committee. No further action has been taken. Over 150 bills have been introduced in more than 35 states, creating a patchwork that varies by jurisdiction. The patchwork is the opposite of the clear nationwide signal that would restore competitive dynamics. > The graduate scrolling LinkedIn is not competing against chatbots. She is competing against four decades of eroded mobility, in a labor market where the companies that might hire her face less pressure to do so than at any point since the data began. We all spent two years worrying that AI will trap young workers in obsolete careers, if they every get a career in the first place. Meanwhile, noncompete agreements have been legally trapping workers in underpaying jobs for decades, and we barely noticed.
johnnyanmac 7mo ago
There's a lot of opposition to pretty much any nigh objectively good thing for the people. Just follow the money. It usually comes down to 1. lobbyists vying for a company who wants to keep power 2. the legislature having its own vested interest from relationship/deal/lobbying 3. the minority of constituents are the ones who constantly call in and go to townhalls, because they have the time, money, or energy to do so compared to someone who's at work during a townhall.
remarkEon 7mo ago
What's the actual steel man argument for why noncompetes are good? I've never really encountered one, just seen the corporate advocacy that they don't want to deal with high employee turnover. Best I can do: Non-competes are (possibly) unenforceable anyway, so signing one maybe acts as a value signal for the employee? "I'd have to violate my non-compete, so in order to do that and permanently burn the bridge with my current company, you need to pay me $X + $Y." Frankly I don't buy it, though, because it assumes too much about the rationality of all actors involved and the savviness of the employee during negotiations.
- jkingsbery 7mo ago
  I am glad most places are getting rid of non-competes. But here is the best argument I've heard for them: For many companies, a lot of their value is in their intellectual property. Non-competes exist not because the company will enforce it against employees (they might, but they usually don't), but more as a fig-leaf to potential investors down the line asking about the value of the intellectual property. The argument goes, if someone could easily leave the company with the knowledge earned and go to a competitor, then the investment wouldn't be as valuable.
  - remarkEon 7mo ago
    Okay this I do buy, but that would only explain non-competes for startups, right?
- dismalaf 7mo ago
  > What's the actual steel man argument for why noncompetes are good? It makes it possible to confidently buy a business that's mostly or all goodwill. Otherwise the previous owner can simply poach all the clients. Also lots of jurisdictions allow non-competes as long as the employee is paid for the duration of the non-compete clause. Obvious win there: paid vacation or double up your salary by working for a non-competing firm. Non-competes on employees without compensation are obviously bad.
- tzs 7mo ago
  > What's the actual steel man argument for why noncompetes are good? It probably depends on the kind of job. If say Walmart tried to use a noncompete to stop cashiers from going to Target there probably is no reasonable argument in favor of that. On the other when the employee is a top level executive who knows all the company's trade secrets and all their plans for the next year or so and they want to go to a direct competitor it is hard to see how they won't use that information at the competitor. Even if they scrupulously try to uphold any NDAs they are under and so don't consciously do it stuff will leak. If the first company sues accusing the second company and/or ex-employee of using such information it can get pretty messy, and consumer judicial resources better used for other things. A policy then of allowing noncompetes in this situation might overall be beneficial. Top level executives are generally well compensated and should be sufficiently sophisticated financially to understand the consequences of a noncompete and take that into account when deciding on taking the job so having to sit out 6-12 months before taking a directly competing job should not be a serious issue.
coredog64 7mo ago
Personally I think the way to go about this isn't to ban non-compete agreements but instead to get a couple of highly public cases where said non-compete is voided because the employee didn't receive anything of value for it. Once case law is clear that it requires 80% of the employees salary for the term of the lockup, companies will only require it where it makes sense rather than applying it willy-nilly due to the essentially free nature.

lateforwork 7mo ago

The flip side should be considered as well. There should be some sort of protection for small startup companies. A big company should not be able to steal an innovative startup's technology by hiring away the employees that worked on the product. That used to happen a lot when Bill Gates was running Microsoft, for example. Patents provide some protection, but it is flawed because a big company can put you out of business if you get into a patent war. An employee should be able to leave at any time and work for a competitor, but maybe should not do identical work, otherwise startups will have a hard time protecting their IP.

kccqzy 7mo ago
This is not a mechanism to protect startups. This is a mechanism to protect the flow of ideas, whether the ideas are flowing from a big company to a startup or vice versa. Workers who find a big company bureaucratic should be able to launch a startup. Workers who find a small startup insufficiently resourceful should also join a big company to get resources.
observationist 7mo ago
Companies need to put more care into who they trust, and maybe incentivize skin in the game. If leaving for a competitor means you lose equity, agency, ownership, or some intangible, that can outweigh bigger paychecks. The market should be able to solve this problem without the government setting arbitrary rules, and people should be allowed to sign contracts that limit or restrict their freedom, so long as it involves informed consent from all parties. If Microsoft wants to hire an AI expert for a million dollars a year, and restrict him from competing for 2 years after leaving Microsoft so as to avoid losing market advantage, that seems like a reasonable thing for Microsoft to want. If all Apple has to do to get all the Copilot secrets is hire the chief copilot engineer for 1.5 million, seems like that creates a toxic dynamic and all but guarantees acquihires and a near immediate turnaround in a startup to corporate pipeline for raiding IP. Maybe we should be limiting businesses to doing business at a scale they can responsibly handle. If you can't get human customer service for your computer issues because Windows and Mac have scaled far beyond the number of users they could ever hope to handle, maybe that market needs regulation, and unless they scale customer service accordingly, they don't get to target a majority of the world's population as their customer base? That'd certainly create jobs and opportunities for Linux and induce a revolution in software markets, and it'd limit the incentives for MS and Apple and big tech to do shitty things to suppress the markets overall.

jeffreyrogers 7mo ago

The only time I see non-competes as reasonable is when someone sells a business. It seems fair to put a territory restriction on a seller so the new owner doesn't have to immediately start competing against the person they bought out.

NewJazz 7mo ago
Isn't that doable via stay on and holdback clauses?
- dylan604 7mo ago
  I think every company with contracts like this should have a well furnished roof for these employees to hang out during the day
josephg 7mo ago
Why? They started one successful business. It seems good for society if they go on to start another.
- bs7280 7mo ago
  Why would I buy a business if the person im buying it from is just going to create a new one to compete with me?
  - genthree 7mo ago
    To have own the business? Purchases that wouldn't go through if they didn't reduce competition shouldn't happen anyway. Banning those kinds of restrictions would help with that.
- cowsandmilk 7mo ago
  Often an acquisition of a company is for the set of customers. If I sell my lawn care business and then turn around and email all my former clients offering them lawn care via my new company, I’ve just undercut what I just sold. Noncompete shouldn’t be so broad that I couldn’t move to another city and start a lawn care business there, but I shouldn’t be able to compete directly with the business I just sold using my insider information of that business.

softwaredoug 7mo ago

It’s not the noncompetes that’s the problem, it’s confidentiality agreements with extremely broad language. Learn about the legal principle of “inevitable disclosure”. It’s the idea you can’t work for a competitor because you can’t help yourself but violate an NDA

cyanydeez 7mo ago
Inevitably, it's just the need for lawyers to intervene in "common sense" negotiations. It's never legal to do X, Y, Z, but if the business has all the lawyers and the employee has non, then it doesn't really matter whats legal; it's whose willing to exhaust the cash to fight the issue. Which of course, is why unions are what's needed to properly negotiate employee-employer relationships, the same way a strong government is needed to negotiate corporate-civil relationships. Americans, however, have decided that "individual freedom" is _soooooo_ valuable, that it only exists for people with enough cash to defend it.
wbl 7mo ago
Have fun trying that in CA.
WarmWash 7mo ago
I haven't heard much about it, but I am incredibly curious about how this is currently shaking out in the AI craze. It seems these labs are revolving doors, and any kind of breakthrough knowledge would immediately make you incredibly valuable to other labs or incredibly valuable as a spinoff start-up. Never mind these researchers all knowing each other and certainly having more than a few common spaces (digital or IRL). And the excitement of working in a fresh field still littered with low hanging fruit. I can't help but feel that a large part of the reason why the labs are neck and neck is because everyone is talking to everyone else. I can't substantiate any of this though, it seems to have largely dodged anything besides internal conversation.
- ralph84 7mo ago
  They're all in California where the law is very pro-employee. As long as you're not taking actual documents or code with you, there's nothing your former employer can do about what's in your head.

matthest 7mo ago

A win for Adam Smith capitalism.

jkingsbery 7mo ago
Not sure if this is meant sarcastically or not, but it is - it helps reduce transaction costs of changing employers. Anyone who has ever signed a contract with wide non-competes knows that it is hard for an individual to negotiate against it on an individual basis, but they are rarely enforced in practice, which leaves open individuals to worries about "maybe I'm one of the unlucky few?" These clauses then primarily only increased transaction costs, so eliminating them aids free exchange.
- matthest 7mo ago
  Not sarcastic. Anything that helps keep markets optimally competitive is good for capitalism.

otterley 7mo ago

Why wait until 2027, instead of making it effective immediately?

SilverElfin 7mo ago
Especially when WA’s ruling party regularly uses false ‘emergency’ declarations to make new laws become effective immediately and because this lets them make new legislation immune to voter referendums (yes they abuse this loophole all the time). They could do the same here. If they don’t, it’s a choice made on purpose.
- dragonwriter 7mo ago
  Washington has a 2/3 threshold in both houses of the legislature to pass emergency legislation, and the majority party is short of a 2/3 supermajority in both houses, so it is actually impossible for them to unilaterally pass emergency bills. Also, emergency laws in Washington are not immune to initiative (repeal or amendment by subsequent laws passed by the voters), but are immune to referendum (popular veto by the voters before going into effect).
  - SilverElfin 7mo ago
    Where are you seeing that emergency clauses need a 2/3 majority in each house? I thought they require a simple majority. Regardless, the ruling party has pretty close to a supermajority - over 60% in each house. And also keep in mind, some of the members of the other party are opposition in name only due to the districts where they compete. The share doesn’t really matter - the main issue is that it is overused. There shouldn’t be a hundred emergency clauses in each legislative session. As for the voters’ constitutional right to repeal - I’ve updated the terminology. From https://www.washingtonpolicy.org/publications/detail/time-to-limit-emergency-clauses-and-give-voters-a-choice https://www.washingtonpolicy.org/publications/detail/time-to... > Despite the name, the real reason for these supposed emergencies is not that the state faces some immediate threat. Legislation that includes an emergency clause can only be repealed using an initiative, which requires twice as many signatures as a referendum to put on the ballot for the voters to keep or reject. Referenda also face fewer legal challenges because they consist of a simple up or down vote on a piece of legislation. It doesn’t change the fact that the abuse of these emergency clauses is anti democratic and an abuse of power

dismalaf 7mo ago

This feels a tad heavy-handed and will make it tougher to sell a business without hard assets. It should just be banned for employees or require a payout of (previous salary) * (length of non-compete).

colechristensen 7mo ago
As the years go buy I'm gradually more and more in favor of restrictions to sell businesses. They tend to benefit two groups: the people running a successful business and the people running the even more successful businesses buying them. They tend not to benefit the employees, the customers, the competitors and really anyone else besides a small number of people who are already very successful.
- dismalaf 7mo ago
  Not all businesses are wildly successful. Some are just successful enough to provide a single family with a middle class income. For some people, selling that is their only hope of retirement. It's not like the seller never has an option to say no to the non-compete.
- BurningFrog 7mo ago
  All voluntary transactions benefits both buyer and seller. This is as it should be!
  - throwaway85825 7mo ago
    And the government exists to safeguard the benefit of the broader public. Not all transactions are legal.
- logicchains 7mo ago
  Then nobody creates businesses in your state and everyone there loses. What person in their right mind would invest their time and money into a business they wouldn't be able to sell?
- 7mo ago

SilverElfin 7mo ago

WA has bigger problems like crazy overspending at the state level and many cities, leading to a spiral of new taxes, even if they are unconstitutional (at the state level). This new noncompete law won’t be enough to make the state more attractive to workers and businesses. It has nothing to really offer above California.

tzs 7mo ago

The article covers this, but probably worth having it mentioned here too: Washington already had partially banned noncompete agreements. They were banned for employees who made less the $127k/year or contractors who made less than $317k. Those numbers were adjusted annually for inflation. Edit: less/more mixup fixed

curuinor 7mo ago
Less than, not more than

Beestie 7mo ago

A clause I frequently see (as one who performs a lot of contract work) is a restriction on accepting an offer of employment from the client of the consulting firm I'm contracting with. Whenever I see this clause, I redline it out and advise the consulting firm to fashion a buyout clause* with the client. I'm very firm that the consulting firm cannot restrict my employment opportunities. * The buyout clause is between the client and consulting firm and roughly compensates the consulting firm for the lost profit of the rate diff over the remaining term of my contract with the consulting firm.

hx8 7mo ago
I've had a buyout clause used while consulting before. The company was ending their relationship with the contracting company and wanted to keep a handful of individuals.
- nickff 7mo ago
  From what I understand, the contracting firms don't like (reasonably-priced) buyouts because it allows clients to cherry-pick the best 'talent', and basically use the contractor as a 'farm team'.
  - 93po 7mo ago
    yes, it's unfortunately common for employers to abuse their workers by keeping their pay and work conditions as awful as possible and using any means possible to prevent them from leaving to better conditions and pay
ConradKilroy 7mo ago
wow, I've learned so much from your post, owe you big time!
catcowcostume 7mo ago
> I'm very firm that the consulting firm cannot restrict my employment opportunities. Great point! NCA are essentially a limitation on your ability to work -- especially in niche industries or fields.

ChuckMcM 7mo ago

If you had asked me in 1995 what was the one thing[1] that Boston could change in order to compete with Silicon Valley I would have told you "Make non-compete agreements illegal" Companies in the Bay Area whined about it all the time but it kept the ecosystem vibrant and a lot of technology exists because of that. In the late 90's early '00s a big reason for a lot of 'high profile' people quitting their cushy job and setting out in a startup was because 'management' wouldn't allow them to move forward on an idea that they felt would "disrupt our own business." Those same people could quit, create a start up, and make that idea real anyway. So this is excellent progress for Washington State. I wonder how many ex-Microsoft employees this effects. [1] I vacillated between this and California law giving ownership of what you worked on in your own time on your own equipment yours, except the latter was pretty effectively neutered by big corps defining their businesses more vaguely.

gautamcgoel 7mo ago
Wait, I'm confused. Do you mean Boston should have made non-compete agreements illegal?
- ChuckMcM 7mo ago
  Yes. At the time, non-compete agreements were legal (and commonplace) in Massachusetts. I haven't followed the Boston tech news for a decade so they may have changed that. But I had this exact conversation with Senator Ed Markey who was a congressman at the time. He was in the Bay Area and I was one of the people who were invited to a dinner he held on "Technology and Innovation."
  - deleted 7mo ago
    [deleted]
- Twirrim 7mo ago
  Massachusetts used to be one of the most favourable states for non-compete agreements, with strong legal protection and support, favouring companies. Not sure if that has changed since the last time I looked (been a few years).

charcircuit 7mo ago

I think it's reasonable to prevent your employee from working for your competitor at the same time they are working for you. Or even an employee creating a startup themselves with AI and then mailing all of your clients.

jmward01 7mo ago

I was just forced to sign one of these after already being employed. I, very clearly, pointed out that I didn't actually agree but that I needed a job. Often people don't see these things until it is too late to back out like at on-boarding or even later, as in my case. It is bad enough to have non-compete clauses, they are evil and should be banned, but then to sneak/force them after as if your employment is a TOS that can be changed at any time is beyond wrong. If you really are a good place to work people will stay. If you really are paying enough for the value you provide, people will stay. If you aren't then people will leave, for the competition likely since that is the industry they know. Non-compete is really just a power play that enables companies to pay employees less and it is an abuse of power.

silexia 7mo ago

I am moving my business out of state because of this. Already had a problem with this, I had an employee stealing clients and he even said on a recording he made for his roommate and the roommate made me that he stole them. You can not run a business in Democrat states anymore.