Are non-compete clauses enforceable in freelance contracts in Washington state?

Are non-compete clauses enforceable in freelance contracts in Washington state?

In Washington, non-compete clauses are generally unenforceable against independent contractors unless they meet strict statutory earnings thresholds and disclosure requirements under RCW 49.62. If a contractor earns less than the state-mandated threshold, any non-compete provision is void and unenforceable as a matter of law.

Key takeaway: If you are a freelancer earning less than $120,559.99 annually from a specific client, any non-compete clause in your contract is likely void under Washington law.

Understanding RCW 49.62: The Legal Framework

Washington State enacted RCW 49.62 to prevent the over-utilization of restrictive covenants that stifle economic mobility. While the law primarily targets employees, it explicitly extends to independent contractors. For a non-compete to be valid, it must satisfy three primary pillars: the earnings threshold, the disclosure requirement, and the reasonableness test.

The Earnings Threshold

The law sets a high bar for "independent contractors." To be subject to a non-compete, you must earn more than the threshold amount from the party seeking the restriction. As of 2024, the threshold for independent contractors is $120,559.99 per year. This number is adjusted annually for inflation by the Washington Department of Labor & Industries.

The Disclosure Requirement

Even if you meet the earnings threshold, the clause is unenforceable if it was not disclosed properly. You must be informed of the non-compete terms in writing no later than the time you accept the offer of work. If a client attempts to introduce a non-compete after you have already begun the engagement, that clause is legally void.

The Reasonableness Test

Even if the threshold and disclosure requirements are met, the clause must still be "reasonable." Washington courts evaluate:

• Duration: Is the time limit excessive?
• Geographic Scope: Is the restricted area broader than necessary to protect legitimate business interests?
• Subject Matter: Does it prevent you from working in fields unrelated to the client's business?

Action Item: Check your contract for the exact date of signing. If the non-compete was added as an amendment after your initial contract start date without "independent consideration" (a separate payment or benefit), it is likely unenforceable.

Comparison: Employees vs. Independent Contractors

What to Do If You Encounter a Non-Compete

If you are presented with a contract containing a non-compete, follow these steps to protect your professional future:

1. Verify the Math: Calculate your total annual compensation from that client. If it is below the current threshold, the clause is void.
2. Request Removal: Politely inform the client that Washington law (RCW 49.62) renders such clauses unenforceable for contractors and request its removal.
3. Review for "Non-Solicitation": Note that non-solicitation clauses (preventing you from poaching clients) are treated differently than non-competes. Ensure the clause is narrowly tailored.
4. Consult Counsel: If the client insists, have a legal professional review the specific language to determine if it constitutes a "restraint of trade."

Key takeaway: Never assume a contract is legal just because it is written on professional letterhead. Washington law provides strong protections for freelancers that override standard "boilerplate" contract language.

How TermScore Can Help

Navigating the nuances of Washington's restrictive covenant laws can be complex. TermScore uses advanced AI to instantly scan your freelance contracts, flagging unenforceable non-compete clauses and highlighting potential legal risks before you sign. By automating the review process, TermScore ensures you remain compliant while protecting your right to work freely across your industry.