Washington State Noncompete Law Faces Challenge in Federal Court

A legal battle is brewing as a former employee challenges a noncompete agreement, spotlighting worker rights in today’s job market.

Former Washington State Employee Faces Lawsuit Over Noncompete Agreement

Mark Westphal, a former worker at the wheelchair company Permobil, is in a legal fight that has brought attention to noncompete agreement laws in Washington State. Permobil has sued Westphal, claiming he took secret company information to a competitor and is in breach of a noncompete contract.

However, that company has still not provided clear evidence to support its claim. The main issue in the case is Westphal’s employment contract, which includes a clause prohibiting him from working for a competitor for 12 months after leaving the company. The rub is that non-compete contracts are no longer legally valid in Washington State.

Noncompete clauses, which restrict workers from joining rival companies, have become common in many industries, even in lower-paying jobs like fast food and warehousing. In Washington state, a law passed in 2019 limits the enforcement of noncompete agreements for workers earning under $100,000. However, Permobil is attempting to sidestep this law by filing the lawsuit in federal court in Tennessee, where the company is based. This situation raises questions about the validity of contracts that require disputes to be settled in other states.

Research from the University of Maryland shows that before Washington’s law change, about one in four workers earning under $100,000 were bound by noncompete agreements. These noncompete agreements are known to lower wages by limiting workers' ability to change jobs. Critics also argue that noncompetes are unfair and hinder job mobility, while some companies claim they protect trade secrets and justify their investments in training employees.

Even though Washington has made efforts to limit noncompete agreements, Westphal’s case shows the challenges resident workers face when companies enforce these contracts across state lines. The Washington Attorney General's office has acted against companies violating the noncompete law, but the effectiveness is still unclear, especially when cases are tried in states where such agreements are normally accepted.