State Lawmakers Approve Bills To Ban Noncompetes, Safeguard Jobless Benefits

OLYMPIA — Washington lawmakers took a major step toward bolstering worker protections this week, as the state House passed two labor-backed bills aimed at eliminating noncompete agreements and safeguarding unemployment benefits for those who voluntarily accept layoffs.

Both measures, sponsored by Rep. Liz Berry (D-Seattle), passed Tuesday with strong bipartisan support and now head to the Senate for further consideration.

House Bill 1155 would make all noncompete agreements void and unenforceable, regardless of when they were signed. The bill passed on a 65–29 vote and mirrors a 2024 Federal Trade Commission rule banning such agreements nationwide—though that federal rule is currently facing legal challenges.

“Whether it’s taking a new job with better pay or leaving to start your own company, opportunities to pursue your passion shouldn’t be blocked by your old job,” Berry said. “Banning noncompete agreements strengthens entrepreneurship, supports workers, and grows our economy.”

Noncompete agreements have long been controversial. Originally intended to protect trade secrets or client lists, critics say they are often used to suppress wages and limit mobility, particularly for mid-level and lower-wage workers.

Under current state law, noncompetes are generally only enforceable for employees earning more than about $127,000 annually. HB 1155 would go further, banning them entirely and requiring employers to notify current and former workers by October 2027 that such agreements are no longer valid.

The bill explicitly allows other employer tools—like confidentiality and nonsolicitation agreements—to remain in place. It also reinforces a ban on employers threatening to enforce invalid noncompetes or falsely claiming that workers are bound by one.

Berry and other supporters say the legislation would remove significant legal and financial barriers for workers looking to change jobs or launch businesses.

“This bill is about freedom—economic freedom,” said Joe Kendo of the Washington State Labor Council during public testimony. “The right to work where you want, when you want, without being sued by your former employer.”

Opponents, including representatives from the broadcast and business communities, argued the bill could limit companies’ ability to protect investments, particularly in industries where employees are highly compensated public figures.

“This goes too far,” said Rowland Thompson, testifying on behalf of the Washington State Association of Broadcasters. “The broadcast industry relies on talent-based contracts. These are sophisticated negotiations and should be preserved.”

Meanwhile, HB 2264—which passed unanimously—seeks to clarify state law around unemployment benefits for workers who choose to take part in voluntary layoffs.

Currently, state agency rules allow such workers to qualify for benefits, but conflicting court interpretations have led to confusion and disqualifications. Some judges have ruled that unless an employer makes the final decision to end employment—rather than the worker voluntarily stepping forward—the worker may not be eligible.

HB 2264 removes that ambiguity, stating clearly that as long as a worker’s job ends as part of an employer-initiated layoff or workforce reduction plan, they can receive unemployment insurance (UI) benefits. The bill also affirms that allowing a worker to change their mind does not nullify eligibility.

“Some workers were told they would receive benefits, only to find themselves denied after taking a voluntary layoff,” Berry said. “That is not just unfair—it’s destabilizing. This bill ensures they are protected under the law.”

Supporters described real-world examples of workers making responsible decisions to step aside for colleagues, believing they would qualify for UI, only to face appeals and financial hardship.

“This has had devastating consequences,” said Anne Paxton of the Unemployment Law Project. “We’ve seen people lose their homes and rack up debt because of legal gray areas they couldn’t have foreseen.”

With economic uncertainty still affecting sectors across the state, advocates argue that HB 2264 will provide both clarity and compassion during workforce transitions. Business groups have not formally opposed the bill but have urged the state to monitor its potential impact on the solvency of the UI Trust Fund.

The current maximum weekly unemployment benefit in Washington is $1,152. Most eligible workers can receive benefits for up to 26 weeks, based on their previous wages.

Both bills now await hearings in the Senate, where Democrats hold a majority. If passed and signed into law, HB 2264 would take effect 90 days after the legislative session ends, while the noncompete ban under HB 1155 would go into effect on June 30, 2027.

“This is about making sure our economy works for everyone,” Berry said. “We have to protect workers—not just when the market is booming, but especially when it’s not.”