EMPLOYEE NON-COMPETITION AGREEMENT
(Washington – RCW 49.62 Compliant)
TABLE OF CONTENTS
- Document Header.................................................1
- Definitions........................................................2
- Operative Provisions.............................................4
- Representations & Warranties.....................................6
- Covenants & Restrictions.........................................7
- Default & Remedies...............................................8
- Risk Allocation..................................................9
- Dispute Resolution...............................................10
- General Provisions...............................................11
- Execution Block.................................................13
Page numbers provided for drafting convenience; update as necessary on final formatting.
1. DOCUMENT HEADER
1.1 Title; Parties
This Employee Non-Competition Agreement (“Agreement”) is entered into by and between [EMPLOYER LEGAL NAME], a [STATE] [entity type] with its principal place of business at [ADDRESS] (“Employer”), and [EMPLOYEE NAME], an individual residing at [ADDRESS] (“Employee”) (each, a “Party,” and collectively, the “Parties”).
1.2 Effective Date
This Agreement is effective as of [EFFECTIVE DATE] (“Effective Date”).
1.3 Recitals
A. Employer is engaged in the business of [DESCRIBE BUSINESS] (“Business”).
B. Employee will obtain specialized training, access to Confidential Information, and/or other valuable consideration identified herein.
C. Pursuant to Wash. Rev. Code ch. 49.62 (“Washington Non-Compete Statute”), Employer may lawfully restrict Employee’s post-employment competitive activities subject to statutory limitations.
D. The Parties desire to set forth the terms and conditions of such restrictions.
NOW, THEREFORE, for good and valuable consideration, the adequacy and receipt of which are acknowledged, the Parties agree as follows:
[// GUIDANCE: If the Agreement is presented after an offer of employment has been accepted, insert an “Independent Consideration” recital describing the additional consideration (e.g., signing bonus, stock option grant, promotion), per RCW 49.62.020(1)(c).]
2. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings set forth below. Terms defined herein have their defined meaning whether used in the singular or plural.
“Affiliate” – any entity directly or indirectly controlling, controlled by, or under common control with Employer.
“Business” – the products and services described in Recital A, together with any substantially similar products or services offered or under demonstrable development by Employer during Employee’s employment.
“Confidential Information” – any non-public information belonging to or licensed to Employer, including but not limited to trade secrets, customer lists, pricing, marketing strategies, product roadmaps, source code, inventions, and proprietary processes.
“Customer” – any person or entity that purchased products or services from Employer within the twelve (12) months immediately preceding the Separation Date.
“Garden Leave Compensation” – base salary continuation at one hundred percent (100%) of Employee’s highest annualized base salary during the prior calendar year, less all lawful deductions, payable in accordance with Section 6.3.
“Non-Compete Period” – the period beginning on the Separation Date and ending eighteen (18) months thereafter, unless earlier terminated or judicially reduced pursuant to Section 5.3.
“Restricted Territory” – (a) the State of Washington and (b) each other geographic area in which, during the twelve (12) months prior to the Separation Date, (i) Employee regularly performed duties for Employer or (ii) Employer had material Business operations [LIMIT AS NECESSARY].
“Separation Date” – the last date on which Employee is classified as an employee of Employer for any reason.
“Separation for Cause” – termination of employment based on Employee’s (a) material breach of policy, (b) gross misconduct, (c) commission of a felony or crime involving moral turpitude, or (d) material breach of this Agreement.
3. OPERATIVE PROVISIONS
3.1 Consideration & Statutory Notice
(a) Employer provided Employee with a copy of this Agreement no later than the earlier of (i) the time of Employee’s written offer of employment or (ii) thirty (30) days before the commencement of employment, in compliance with RCW 49.62.020(1)(a).
(b) In consideration of Employee’s covenants herein, Employer shall provide:
(i) employment or continued employment;
(ii) access to Confidential Information; and
(iii) [INSERT ADDITIONAL CONSIDERATION, e.g., signing bonus, equity grant].
[// GUIDANCE: If presented post-hire, confirm independent consideration and a 14-day review period, RCW 49.62.020(1)(c).]
3.2 Non-Competition Covenant
Employee shall not, during the Non-Compete Period, directly or indirectly own, manage, operate, join, control, finance, be employed by, consult for, or otherwise participate in any Competing Business within the Restricted Territory.
“Competing Business” means any person or entity that engages in activities substantially similar to the Business and with which Employee would perform job duties that are similar to those performed for Employer at any time during the 24 months preceding the Separation Date.
3.3 Reasonableness & Reformation
The Parties acknowledge that (a) eighteen (18) months is the maximum duration presumptively enforceable under RCW 49.62.020(2); (b) the Restricted Territory is narrowly tailored to protect Employer’s legitimate business interests; and (c) the scope of restricted activities is limited to those necessary for such protection. If any provision is determined to be overbroad, a court of competent jurisdiction shall modify the provision to the minimum extent necessary to comply with applicable law.
3.4 Tolling
The Non-Compete Period shall be tolled during any period in which Employee is in breach of Section 3.2.
4. REPRESENTATIONS & WARRANTIES
4.1 Employee represents and warrants that:
(a) Employee’s execution of this Agreement and performance of all obligations do not and will not violate any existing contractual or legal obligation;
(b) Employee has had an opportunity to consult with independent legal counsel regarding this Agreement; and
(c) Employee meets the statutory compensation threshold for enforceability under RCW 49.62.020(1)(b) (currently [INSERT YEAR] threshold: [INSERT AMOUNT] per year).
4.2 Employer represents and warrants that it possesses a legitimate business interest justifying the restrictions herein, including protection of trade secrets, goodwill, and substantial relationships with Customers.
5. COVENANTS & RESTRICTIONS
5.1 Confidentiality
Employee shall hold all Confidential Information in strict confidence and shall not disclose, use, or permit the use of such information except as necessary to perform Employee’s job duties. The confidentiality obligation survives indefinitely.
5.2 Return of Property
Within two (2) business days after the Separation Date, Employee shall return all Employer property, including all tangible and intangible embodiments of Confidential Information.
5.3 Notice of Employment
During the Non-Compete Period, Employee shall provide Employer with written notice of any new employment or engagement, including the identity of the employer/client, job title, and job description sufficient to enable Employer to evaluate compliance. Employer may communicate the existence and terms of this Agreement to any prospective or subsequent employer.
6. DEFAULT & REMEDIES
6.1 Events of Default
Any of the following constitutes an “Event of Default”:
(a) Employee’s breach of Sections 3, 5.1, or 5.2;
(b) Employer’s failure to pay Garden Leave Compensation as required under Section 6.3.
6.2 Notice & Cure
Except for breaches of confidentiality (for which no cure period is provided), the non-breaching Party shall provide written notice describing the default in reasonable detail and provide a ten (10) day cure period before initiating formal proceedings.
6.3 Garden Leave Compensation (Laid-Off Employees)
If Employer seeks to enforce Section 3.2 against an Employee who is terminated as a result of a lay-off (as defined in RCW 49.62.010(10)), Employer shall, as a condition to enforcement, pay Garden Leave Compensation for each month during which enforcement is sought, offset by any earnings Employee receives from other employment during such period. Employer’s payment obligation shall cease upon the earlier of (a) the expiration of the Non-Compete Period or (b) Employee’s breach of Section 3.2.
6.4 Injunctive Relief
Employee acknowledges that any breach of Sections 3 or 5 will cause irreparable harm for which monetary damages are inadequate. Employer is therefore entitled to seek temporary, preliminary, and permanent injunctive relief without the necessity of posting bond, in addition to all other remedies available at law or equity.
6.5 Statutory Damages
If a court or arbitrator finds that Employer has violated RCW 49.62, Employer shall pay Employee the greater of actual damages or $5,000, plus reasonable attorneys’ fees and costs, as provided under RCW 49.62.080(2).
7. RISK ALLOCATION
7.1 Indemnification by Employee
Employee shall indemnify, defend, and hold harmless Employer and its Affiliates, and their respective officers, directors, employees, and agents from and against all claims, demands, liabilities, damages, losses, costs, and expenses (including reasonable attorneys’ fees) arising from or relating to Employee’s material breach of this Agreement, except to the extent such indemnification is prohibited under applicable law.
[// GUIDANCE: WA’s public policy disfavors fee-shifting against employees. Consider narrowing this clause or converting to a “cost reimbursement” provision.]
7.2 Limitation of Liability
No contractual liability cap applies to either Party with respect to a breach of confidentiality, misappropriation of trade secrets, or violation of the Non-Competition Covenant.
7.3 Insurance
Employer shall maintain commercially reasonable general liability and employment practices liability insurance throughout Employee’s employment.
7.4 Force Majeure
Neither Party shall be liable for failure to perform its obligations (other than payment obligations) if such failure results from events beyond the Party’s reasonable control, including but not limited to natural disasters, governmental actions, labor disputes, or acts of terror.
8. DISPUTE RESOLUTION
8.1 Governing Law
This Agreement and all disputes arising hereunder shall be governed by and construed in accordance with the laws of the State of Washington, without regard to its conflict-of-laws principles.
[// GUIDANCE: RCW 49.62.050 voids any agreement that requires application of law other than Washington for Washington-based employees.]
8.2 Forum Selection
Subject to Section 8.3, the Parties irrevocably submit to the exclusive jurisdiction of the state courts located in [COUNTY], Washington for any action arising out of or relating to this Agreement.
8.3 Arbitration (Optional)
[OPTION 1 – Include] Any dispute, claim, or controversy arising out of or relating to this Agreement shall be resolved by binding arbitration administered by the American Arbitration Association (“AAA”) under its Employment Arbitration Rules then in effect. The seat of arbitration shall be [CITY], Washington, and judgment on the award may be entered in any court of competent jurisdiction.
[OPTION 2 – Omit] Intentionally Deleted.
[// GUIDANCE: If you elect arbitration, attach or incorporate the AAA rules and ensure no cost-splitting violates RCW 49.62 or the Washington Wage Rebate Act.]
8.4 Jury Trial Waiver (Optional)
To the extent permitted by applicable law, each Party knowingly and voluntarily waives its right to a trial by jury in any proceeding arising out of this Agreement.
8.5 Equitable Relief Not Precluded
Notwithstanding the foregoing, either Party may seek injunctive or other equitable relief in a court of competent jurisdiction to protect Confidential Information or enforce the Non-Competition Covenant.
9. GENERAL PROVISIONS
9.1 Amendment & Waiver – No amendment or waiver of any provision of this Agreement is effective unless in writing and signed by both Parties. A waiver on one occasion does not constitute a waiver on any subsequent occasion.
9.2 Assignment – Employer may assign this Agreement to any successor in interest by merger, acquisition, or sale of substantially all of Employer’s assets. Employee may not assign any rights or delegate any obligations under this Agreement without Employer’s prior written consent. Any attempted assignment in violation hereof is void.
9.3 Successors & Assigns – This Agreement is binding upon and inures to the benefit of the Parties and their respective successors and permitted assigns.
9.4 Severability & Reformation – If any provision is determined by a court of competent jurisdiction to be invalid or unenforceable, such provision shall be reformed to the minimum extent required to make it valid and enforceable. The remaining provisions remain in full force and effect.
9.5 Integration – This Agreement, together with any confidentiality or invention assignment agreements executed contemporaneously herewith, constitutes the entire agreement between the Parties concerning the subject matter and supersedes all prior agreements, oral or written.
9.6 Counterparts; Electronic Signatures – This Agreement may be executed in one or more counterparts, each of which is deemed an original and all of which constitute one instrument. Signatures transmitted electronically (e.g., via PDF or e-signature platform) are deemed original signatures.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
| EMPLOYER | EMPLOYEE |
|---|---|
| [EMPLOYER LEGAL NAME] | [EMPLOYEE NAME] |
| By: ________ | ______ |
| Name: [NAME] | |
| Title: [TITLE] | |
| Date: ______ | Date: _______ |
[Notary Acknowledgment – [INCLUDE IF REQUIRED BY INTERNAL POLICY]]
[// GUIDANCE:
1. Compensation Threshold Update – Update Section 4.1(c) annually (RCW 49.62.040 adjusts for inflation each January).
2. Geographic Limits – Confirm the Restricted Territory is no broader than necessary; avoid nationwide restrictions unless business operations truly demand it.
3. Garden Leave Logistics – Coordinate payroll to ensure timely Garden Leave Compensation if enforcement is sought.
4. Record Retention – Retain signed copies for the longer of six years or the applicable statute of limitations for breach of contract in Washington.
5. Periodic Review – Re-evaluate enforceability whenever Employee’s role materially changes.
]