Since 2020, Washington has protected workers’ desire to hold down a 2nd job or take on additional work through RCW 49.62.070 commonly referred to as the “moonlighting law”. The statute provides protections for lower paid workers who want to take a second job, work as an independent contractor, or be self employed alongside their employment. However, courts still recognized the common law “duty of loyalty,” which generally allowed employers to impose reasonable restrictions on employees to ensure they do not act in ways that would affirmatively detract from the employer’s business. Indeed, the moonlighting law even provides that “ The question thus arose: how should courts interpret this duty of loyalty in light of the moonlighting law?  

What the Statute Prohibits, Section 49.62.070 

RCW 49.62.070 prohibits an employer from restricting a covered low wage worker (i.e., an employee earning less than twice the applicable state minimum hourly wage) from “having an additional job, supplementing their income by working for another employer, working as an independent contractor, or being self employed.” That language is broad and protects not only formal second jobs but also independent contracting and self employment. Generally, this statute renders many non-compete agreements unenforceable.  

The statute does permit an employer to restrict outside work in three circumstances: 

1. When the additional job raises a safety issue for the employee, coworkers, or the public; 
2. When the additional job would interfere with the employer’s “reasonable and normal scheduling expectations”; or 
3. When the additional work would alter the employee’s obligations under existing law, including “the common law duty of loyalty and laws preventing conflicts of interest and any corresponding policies addressing such obligations” 

Many employers treated the third exemption widely, by framing any similar work to that performed on the job, including self-employed work, as a conflict. The Washington State Supreme Court has now rejected that approach. 

In David v. Freedom Vans LLC, decided January 23, 2025, the Washington Supreme Court held the duty of loyalty must be viewed narrowly and that an employer-imposed broad prohibition on assisting competitorsis impermissible . The court explained that any restriction on outside work must be analyzed on a case-by-case basis and satisfy a specific reasonableness test. 

A Reasonableness Framework 

Washington courts must now apply a reasonableness framework when evaluating in term restrictions on covered low wage employees. The Court identified three factors courts must weigh: 

• whether there is a need to protect the employer’s business or goodwill, 
• whether the restraint on the employee is reasonably necessary to that protection, and 
• whether enforcing the restriction would violate public policy. 

A restriction that bars “any assistance” to a competitor, the type of language alleged in the agreement before the court, is unlikely to satisfy the second factor in most cases. 

How the Statute Is Enforced 

The statute contains a private right of action that allows an aggrieved person to recover actual damages or a $5,000 penalty, whichever is greater, plus reasonable attorney fees and litigation costs, with the potential for a class action.  

Washington Employment Law Firm 

On top of recent passing of the Washington ban on non-compete and no-poach agreements [will insert URL for WA non-complete blog here], Washington workers have multiple protections against restrictions from movement. 

If you believe you have been subjected to an illegal agreement, or have questions about your rights, we encourage you to schedule a consultation with one of our Schneider Wallace Cottrell Kim employment attorneys. Schneider Wallace Cottrell Kim LLP is a national law firm representing employees in a wide range of employment law cases, including class action lawsuits involving unpaid wages, overtime pay, and commissions, including investigating cases in Washington state and working with local counsel in Washington and states around the United States.  

Contact us at 1-800-689-0024 or info@schneiderwallace.com.