Washington: Supreme Court Limits Moonlighting Restrictions
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APPLIES TO All Employers with Employees in WA |
EFFECTIVE January 23, 2025 |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion:
On January 23, 2025, the Supreme Court of Washington severely restricted the limitations employers could place on low wage employees by way of “moonlighting” polices or duty of loyalty provisions. In David v. Freedom Vans LLC, two former employees sued their employer on behalf of a class of employees that were subject to a noncompete agreement prohibiting them from “directly or indirectly engaging in any business that competes” with the employer. The employees had to decline additional work in order to not violate the noncompete agreement.
Washington’s RCW 49.62 prohibits employers from restricting low wage employees from “having an additional job, supplementing their income by working for another employer, working as an independent contractor, or being self-employed.” Low wage employees are defined as those making less than twice the minimum hourly wage ($33.32 per hour or $69,305 per year in 2025). There is an exception to preserve the common law duty of loyalty to employers, so such provisions and anti-moonlighting provisions have continued to be included in noncompete agreements.
Lower courts have upheld the right to include such provisions. However, the state Supreme Court found that a blanket provision to prohibit working for competitors would undermine legislative intent to allow low wage employees to supplement their income. Employers who wish to include such provisions must narrowly draft them when it comes to low wage workers. Going forward, the lower courts are instructed to evaluate the reasonableness of duty of loyalty or anti-moonlighting provisions on a case-by-case basis.
Action Items
- Review duty of loyalty and anti-moonlighting restrictions for low wage workers with legal counsel.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase