Washington Oral Agreement Disclosure

HB 1450 limits non-competition bans with both workers and independent contractors. The non-competition contract is defined as any written or oral agreement that prevents an employee or independent contractor from practising a legal profession, a commercial or commercial enterprise. However, as explained below, certain types of restrictions are not affected by the new law, including incompetation agreements and non-compete agreements for Dener. Since proof of oral agreement can be time-designed and costly and lead to additional layers of uncertainty, it is generally advisable to formulate the terms of the agreements in writing. But there is nothing on an oral contract that makes it in itself unenforceable, provided it is not a contract prescribed by law, which must be written. This is a clear departure from the current Washington law, which gives the courts full freedom to amend non-competition agreements to ensure that they are enforced to the extent that they are reasonable. HB 1450 penalizes employers for this type of partial application and indicates a clear legislative intent to encourage employers to design narrow restrictions. This can be a significant deterrent to employers` application of non-competitive agreements, even if a former worker exhibits conduct that is clearly contrary to parts of his post-work restrictions. Hb 1450 not only significantly restricts the use of remote competition agreements, but also restricts no moonlighting guidelines and so-called “No” agreements for franchise transactions. With regard to the Lunar Lights Act in particular, the new law stipulates that employers must not “limit, restrict or prohibit” workers earning less than twice the state`s minimum hourly wage, to have another job or to supplement their income, either as a contractor or as self-employed (subject to the obligation of loyalty and laws and policies that prevent conflicts of interest). In addition, franchisors are prohibited from preventing franchisees from recruiting or recruiting staff from the franchisor or other franchisees. In Washington, the answer is: sometimes. Whether an oral contract is enforceable in Washington depends on the circumstances of the agreement – in particular whether the agreement is covered by the provisions of the “Fraud Act,” which states that certain types of contracts must always be signed in writing and by the parties to the agreement (or at least in certain circumstances , signed by the party against which the execution is requested).

On May 8, 2019, Washington Gov. Jay Inslee signed the Engrossed Substitute House Bill 1450 (HB 1450), which radically changed the law on non-competition bans and moonlighting bans in Washington State. The bill will come into force on January 1, 2020, but it contains retroactive provisions. Employers with Washington companies that have (or want) such agreements with their employees or are considering recruiting people who have such agreements with other employers must understand the new restrictions. While there are a few exceptions, the following types of agreements normally have to be entered into in writing to be enforceable under Washington law: employers must disclose in writing to potential employees the terms of the non-compete clause no later than the time the worker accepts a job offer. It is therefore desirable that employers who hire washington-based workers present the terms of the competition contracts as well as the letters of offer, so that individuals have the opportunity to consider these agreements as part of the decision to enter employment. In addition, for the codification of existing case law in Washington, HB 1450 requires that non-competitive agreements concluded after the start of employment be supported by independent reflection – continuous authorization does not stagnate.


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