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Non-Competition Agreements

4 Mar 2022 3:52 PM | Marybeth Berney (Administrator)

Non-Competition Agreements in the Profession of Massage Therapy

By Annika Samuelsen, LMT

If you are a licensed massage therapist and work as either an employee or independent contractor here in the state of Washington, your employer may have required you to sign a non-competition agreement upon hire.  Read on to inform yourself on recent changes to the enforcement of non-competition agreements that might apply to you.

For anyone not familiar with the term, a non-competition agreement (also called “non-compete agreement'') is a contract between an employer and their employee.  For massage therapists, this is likely a clause detailed in a subsection of your terms of employment. This type of agreement prohibits an employee from working at or starting a business that is or would be in direct competition with their employer’s business.  The agreement may also specify that once employment has been ended, that the employee must not work or start a business within a certain distance of the employer, at least not until a certain amount of time has passed, otherwise they will incur a monetary penalty.

Non-competes are used in many different professions to protect employers from losing business to their current or former employees.  Washington legislators who viewed non-competition agreements as prohibitive to economic growth and development proposed bill SB 5478, which was signed into law on May 8th 2019 and went into effect on January 1st 2020. The revised code RCW 42.62.020 details: 

"A noncompetition covenant is void and unenforceable against the employee: [...] unless the employee's earnings from the party seeking enforcement, when annualized, exceed one hundred thousand dollars per year."

For independent contractors, annual earnings must be greater than $250,000 per year for the non-compete to be enforceable.  Furthermore, these dollar amounts are tied to the rate of inflation, and are therefore adjusted annually.

Note: A contract that prohibits an employee or independent contractor from actively soliciting an employer’s clients to see them at another location of business (i.e. non-solicitation agreements) is a different topic.

What does this mean for licensed massage therapists? 

If you signed a non-competition agreement with an employer, whether prior to or after the date this code went into effect, and your earnings are below the enforceable thresholds, your employer can no longer impose restrictions on where you work now or in the future because the contract you signed has become void and unenforceable.

If an employer asks you to sign a non-competition agreement even though your annual earnings are below the enforceable threshold, consider directing them to the revised code and the sources listed below when you are negotiating your terms of employment.

We want our members to be informed about the legislation that protects them so they can be satisfied with their terms of employment.  Please let us know if this information has been helpful to you, and if you would like to read more content on employment and workplace rights.

References:

Washington Labor and Industries has a page on non-compete agreements in their section on workplace policies (link).

Chapter 49.62 of the revised code of Washington (RCW) details the information on non-compete agreements (link).

RCW bill history of SB 5478 (link).




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