The Washington state legislature plans to take up one of the tech industry’s most hot-button issues next session: non-compete agreements.
The contracts temporarily prevent workers from taking jobs with employers’ competitors. Non-competes are subject of fervent debate in the tech community, with advocates claiming they protect business secrets and opponents arguing they stymie innovation.
Despite a majority in both state houses last session, Democrats failed to get non-compete legislation across the finish line. They plan to take another stab at it next year, according to a draft bill prepared for Rep. Derek Stanford, obtained by GeekWire.
Here are the key changes in the draft bill:
— Noncompetes would be void unless an employee is paid three times the annual state average and was notified about the terms of the contract at least two weeks before the job start date. Washington state’s annual average wage in 2017 was $61,900 so employees would need to earn $185,700 or more to have an enforceable noncompete.
— The compensation threshold would be even higher for independent contractors. They would need to make at least four times the state average annual wage to have an enforceable noncompete.
— If an employee with a noncompete stops working for a company, that agreement would be considered “unreasonable and unenforceable” after 18 months.
— Violators of the bill could face penalties of $5,000 plus actual damages and legal fees.
It’s still early stages for the bill, which is likely to be revised before it is introduced. The state legislature begins each year on the second Monday of January.