|ESHB 1450 was just signed into law in an effort to increase workforce mobility. This law significantly restricts the ability of employers to impose noncompetition restrictions on employees and independent contractors. It also restricts employer’s ability to prevent “moonlighting.”
The law takes effect January 1, 2020, but it applies to noncompete agreements in effect on that date as well as those entered into after January 1, 2020. Under this law, a noncompete agreement is void and unenforceable unless the following conditions are met:
Notably, this new law does not affect noncompete agreements entered into as part of a sale of a business. It also does not apply to the following:
· Nonsolicitation agreements, i.e. agreements where an employee agrees not to solicit other employees to leave the company.
· Confidentiality agreements.
· Agreements that restrict disclosure of trade secrets or inventions.
Finally, the new law provides that an employer may not prohibit any employee who earns less than twice the applicable state minimum hourly wage from working an additional job to supplement their income, working as an independent contractor, or being self-employed.
The new law takes effect January 1, 2020 and will affect noncompetition agreements already in effect.
Please contact Richard Davis at Chmelik, Sitkin & Davis, P.S. if you have questions about your noncompete agreements.