A bill sponsored by Democratic State Rep. Derek Stanford is aimed at prohibiting most future non-compete agreements in Washington.
The House Labor Committee approved HB 1926 Tuesday. It went to the Rules Committee Thursday.
Stanford said after a hearing on the bill in early February that overused non-compete agreements reinforce the wealthy, stifle startups and inhibit the best and brightest future entrepreneurs.
The Labor Committee approved the bill by a 4-2 vote. The bill would prohibit all future non-compete agreements in Washington, with few exceptions.
“Non-compete agreements have ballooned into a business practice that’s used too often and too broadly,” Stanford said. “Of course, there are legitimate business interests in protecting things like proprietary information and trade secrets, but those can be protected by non-disclosure agreements. The overuse of non-compete agreements only hurts workers and discourages entrepreneurs.”
He noted that non-compete agreements are often used in the technology industry, where, he said, even temporary software developers, coders and web designers are forced to sign contracts that prohibit them from finding a “similar” job after their temporary employment ends. Stanford said that while large tech companies claim that prohibiting non-compete contracts would hurt business, evidence presented at the hearing points the other way.
“California beat us to banning non-compete agreements — back in 1872,” Stanford said. “We’ve all heard of the Silicon Valley and companies like Apple, Google, Intel, Adobe and Facebook. These are all companies that thrive in a state where non-compete agreements have been banned for more than 100 years.”
He said that non-compete agreements are not only used for restricting future work for highly-skilled employees in the creative and tech industries. He noted that, last spring, The Seattle Times reported on a wage worker who left a $15 an hour job in water-damage cleanup with ServiceMaster of Seattle — a franchise of a national corporation worth $3.4 billion — when he was offered an $18 an hour job at Superior Cleaning of Woodinville. ServiceMaster sued the worker to force him to quit his job on the grounds he signed a non-competition clause that supposedly prohibited him from working in water-damage jobs. For that matter, ServiceMaster claimed he couldn’t work in fire-damage jobs, janitorial, window washing, floor- or carpet-cleaning jobs since ServiceMaster also offered those services.
Stanford represents the 1st Legislative District, which includes most of Mountlake Terrace, all of Brier and Bothell, unincorporated areas of Snohomish County north and east of Bothell, north Kirkland, and unincorporated areas of King County between Bothell and Kirkland. He is vice chairman of the Capital Budget Committee and a member of the committee on business and financial services and the committee on agriculture and natural resources.
Evan Smith can be reached at schsmith@frontier.com.
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