Washington is banning nearly all noncompete agreements starting June 30, 2027 — a shift attorneys say healthcare employers should not ignore, according to a legal analysis published by law firm Seyfarth Shaw July 9.
Gov. Bob Ferguson signed House Bill 1155 into law March 23, prohibiting employers from entering, enforcing or even suggesting a noncompete applies to Washington-based employees and independent contractors. The law also treats certain compensation arrangements that require repayment or forfeiture as noncompetes.
Washington joins California, Minnesota, Montana, North Dakota, Oklahoma and Wyoming in adopting a near-total ban on employment noncompetes.
For health systems, the change could accelerate physician and provider mobility, particularly in competitive markets, the attorneys wrote. Patient nonsolicitation provisions will remain permissible, they noted, but restrictions that effectively block providers from continuing to treat patients may not survive scrutiny.
Employers have until Oct. 1, 2027, to notify current and former workers in writing that existing noncompete agreements are void. Narrowly drafted nonsolicitation agreements, confidentiality provisions and trade secret protections remain enforceable, provided nonsolicitation terms are limited to 18 months after an employee’s departure.
The law adds Washington to a broader, multistate trend of healthcare-specific noncompete restrictions taking effect this year, including new measures in Virginia, Utah and Montana narrowing noncompete use for physicians and other clinicians.
Healthcare employers with Washington-based staff should review existing agreements and template contracts now, attorneys advise, given the compliance runway before the 2027 effective date.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.