Your customer list, pricing, supplier terms, recipes, code and processes are often worth more than anything on your balance sheet. Washington law protects them as trade secrets, but only if you take reasonable steps to keep them secret. Most businesses find out whether they did that after an employee leaves with a vital company information.
That question matters more now than ever. Washington has enacted a ban on employee and contractor noncompetes that takes full effect on June 30, 2027. Once a noncompete is no longer available, confidentiality agreements, compliant nonsolicitation terms, and good internal practices become the main tools you have left. Martin helps Shoreline, Seattle-area, and Washington based businesses put those protections in place before it’s too late.
How Martin helps protect trade secrets
- Confidentiality and nondisclosure agreements (NDAs) for employees, contractors, vendors and potential investors or buyers.
- Invention and work product assignment so the business, not the individual, owns what employees and contractors create.
- Nonsolicitation provisions drafted to fit Washington’s narrower rules.
- Noncompete review and cleanup ahead of the 2027 ban, including the required notices to current and former workers.
- Independent contractor agreements with confidentiality and IP terms that actually transfer ownership.
- Handbook and policy language on confidential information, device use and return of property.
- Exit procedures for departing employees: reminders of obligations, return of devices and access shutoff.
- Deal protections when sharing information during the sale or purchase of a business.
Washington law on trade secrets and restrictive covenants
What counts as a trade secret
Washington’s Uniform Trade Secrets Act, chapter 19.108 RCW, protects information that has economic value because it is not generally known, and that is the subject of efforts that are reasonable under the circumstances to keep it secret. The second half of that test is where businesses lose. If confidential files are shared freely, never marked, and never covered by an agreement, a court may decide the information was not a trade secret at all.
When the statute applies, remedies can include an injunction against use or disclosure, damages, and in cases of willful and malicious misappropriation, additional damages and attorney fees.
The noncompete ban and what remains allowed
Washington’s noncompete statute, chapter 49.62 RCW, was amended by ESHB 1155. Beginning June 30, 2027, noncompetition covenants with Washington employees and independent contractors are void, regardless of when they were signed. The definition is broad and can reach customer nonservicing clauses and bonus clawbacks and forfeiture clauses. Employers must also make reasonable efforts to notify affected current and former workers by October 1, 2027. Martin covers that notice deadline in more detail on his blog.
Several protections remain available, including confidentiality and trade secret agreements, invention assignment provisions, narrowly tailored nonsolicitation agreements limited to 18 months after employment ends, and noncompetes tied to the sale of a business. A worker harmed by a violation can recover the greater of actual damages or $5,000, plus attorney fees and costs.
A federal notice most employee agreements miss
The federal Defend Trade Secrets Act gives whistleblowers immunity for certain confidential disclosures to government officials or attorneys. If an employee or contractor agreement that covers confidential information does not include notice of that immunity, the employer can lose the right to recover exemplary damages and attorney fees against that person under the federal law. It is a one-paragraph fix.
Common gaps Martin finds
| Gap | Why it matters |
|---|---|
| No signed confidentiality agreement | Weakens the argument that you took reasonable steps to protect the information. |
| Contractors with no IP assignment | The contractor may own the code, designs or content you paid for. |
| Noncompetes still in offer letters | After June 30, 2027, asserting a void noncompete can itself create liability. |
| Everyone has access to everything | Broad access undercuts secrecy and makes departures harder to police. |
| No exit process | Devices, files and accounts leave with the employee. |
How it works
- Consultation. What information drives your business, who has access, and what agreements are in place today.
- Document review. Martin reviews your offer letters, employee and contractor agreements, handbook and NDAs.
- Drafting. Updated agreements and policies that fit Washington’s current and upcoming rules.
- Rollout. Guidance on having current employees and contractors sign, and on the noncompete notices due in 2027.
- Ongoing support. Templates for new hires and a checklist for departures, plus a review if you suspect information has been taken.
If you believe a trade secret has already been misused, Martin can review the situation and discuss your options. For other business contracts, including vendor and customer agreements, see his contract services.
Frequently asked questions
What is a trade secret under Washington law?
Under chapter 19.108 RCW, a trade secret is information such as a formula, process, compilation, program, method or technique that has value because it is not generally known, and that the business takes reasonable steps to keep secret. Customer lists, pricing and internal processes often qualify when they are properly protected.
Is Washington banning noncompete agreements?
Yes. ESHB 1155 amended chapter 49.62 RCW so that noncompetition covenants with Washington employees and independent contractors become void on June 30, 2027, regardless of when they were signed. Certain agreements remain allowed, including confidentiality agreements, limited nonsolicitation agreements and sale-of-business noncompetes.
What do employers have to do about existing noncompetes?
By October 1, 2027, employers must make reasonable efforts to give written notice to current and former employees and contractors whose noncompetes are still in effect, stating that the covenant is void and unenforceable. Employers should also remove noncompete language from offer letters, handbooks and templates.
Are nonsolicitation agreements still allowed in Washington?
Yes, if they are narrowly tailored. Under the amended law, a nonsolicitation agreement can restrict soliciting customers the worker had a direct relationship with, and it is limited to 18 months after employment ends. Broader customer restrictions may be treated as a prohibited noncompete.
Do I need an NDA with independent contractors?
Usually yes. Contractors often see the same confidential information employees do, and without a written assignment they may own the work they create for you. A contractor agreement should cover confidentiality, ownership of work product and return of materials when the engagement ends.
How do I show I took reasonable steps to protect a trade secret?
Courts look at the whole picture: signed confidentiality agreements, limited access, marking of confidential documents, password and device controls, and consistent exit procedures. No single step is required, but having none of them makes protection much harder to claim.
What should I do if an employee leaves with confidential information?
Act quickly. Preserve the employee’s devices and account activity, avoid wiping anything, collect the signed agreements, and get legal advice before sending demand letters. Remedies under Washington’s trade secrets act can include an injunction and damages, and early steps often decide what is recoverable.
Protect your information before 2027
Martin can review your current agreements and update them for Washington’s noncompete ban while there is still time to roll them out.
Direct line: 206-929-0609
Office: 17713 15th Ave NE, Suite 101, Shoreline, WA 98155
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See the full list of services Martin Kreshon provides for Washington businesses.
Attorney advertising. This page provides general information, not legal advice, and reading it does not create an attorney-client relationship. Responsible attorney: Martin J. Kreshon III.