Kutak Rock attorney Andrew Shedlock was recently quoted in Citywire regarding Washington State’s newly enacted legislation significantly limiting the use of non-compete agreements.

Signed into law by Governor Bob Ferguson, House Bill 1155 will take effect June 30, 2027, and broadly bans most non-compete agreements in employment contracts across the state. The law also requires employers to notify employees by October 2027 that any prior non-compete agreements are no longer enforceable.  The legislation also bans the use of “non-service” and “non-acceptance” clauses, which are becoming more common in the RIA industry. 

Shedlock, who advises registered investment advisers (RIAs) and other clients on restrictive covenant matters, emphasized the importance of proactive review in light of the new law. Firms operating in Washington “will want to read, and carefully review their agreements,” he noted.

While the legislation eliminates most non-competes, it preserves the use of certain restrictive covenants. Notably, non-solicitation agreements remain permissible in situations where employees develop client relationships through their work, though such provisions must expire within 18 months of the employee’s departure. The law also allows for protections related to confidential information and trade secrets, as well as non-compete agreements in connection with the sale of a business.

Shedlock also highlighted a key feature of the legislation—its retroactive impact. Beginning June 30, 2027, non-compete agreements, along with associated non-service and non-acceptance clauses, will be void and unenforceable regardless of when they were originally executed, marking a significant shift for employers with existing agreements in place.

Washington joins a growing number of states, including California, Minnesota, Oklahoma, and North Dakota, that have enacted broad prohibitions on non-compete agreements. The change is expected to have a notable impact on industries such as wealth management, where restrictive covenants have historically played a key role in employment arrangements.

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Andrew is a seasoned litigator with a specialized focus on representing brokers, Registered Investment Advisors (RIAs), financial planners, Certified Financial Planners® (CFPs®), financial advisors, and other financial institutions and professionals in contested litigation, advisor transitions, arbitrations and investigations.  Financial planners and advisors regularly work with Andrew to represent them in their transitions from one firm to another and to start their own firms. Andrew excels in managing broker and advisor transition matters and in contested litigation in courts and other forms, offering strategic guidance and counsel to advisors and brokers transitioning to independence through all stages of the process.