Following the Supreme Court’s ruling in this case, employers are severely limited in their ability to prohibit employees making less than twice the state’s minimum wage from moonlighting (i.e. obtaining outside employment). The minimum wage in Washington state is $16.66 per hour, which means that employees earning less than twice the minimum wage (less than an annual salary, $69,305.60), generally may not be prohibited from seeking outside employment.

The Washington Supreme Court’s recent decision in David v. Freedom Vans LLC, Case No. 102566-1 (2025) calls into question the scope of an employer’s ability to limit outside employment of low-wage workers under RCW 49.62.070. 

Washington’s anti-moonlighting law provides plaintiff employees with a private right of action for actual damages or a $5,000 penalty, whichever is greater, plus reasonable attorneys’ fees and litigation costs, with the potential for a class action.

The Court’s recent ruling in the Freedom Vans case breaks from long-standing assumptions that employers could broadly restrict their current employees from simultaneously working for competitors based on the “duty of loyalty” owed by employees to their employers. Instead, the Court applied a “reasonableness” analysis to restrictions on simultaneous outside employment for low wage workers.   

The Freedom Vans decision analyzed the common law “duty of loyalty” in light of the legislature’s objective in enacting RCW 49.62.070 to facilitate workforce mobility, and recognized that it is common for many low-wage workers to work multiple jobs at once.  The Court concluded that anti-competition and anti-moonlighting policies that restrict employee’s options for outside employment must be reasonable and narrowly construed.  Reasonableness is determined on a factual and case-by-case basis, taking into account “[1] whether there is a need to protect the employer’s business or goodwill, [2] whether the restraint on the employee is reasonably necessary, and [3] whether enforcing the noncompete agreement violates public policy.”

The Freedom Vans case was sent back to the trial court for further proceedings, so we do not have a determination of whether the policy at issue in that case was “reasonable” under the Supreme Court’s new framework. 

What This Means for Employers:

Employers are strongly encouraged to review their employment policies, offer letters, and employment agreements to ensure that any outside-employment, non-compete, conflict of interest policy, or other related employment provisions are narrowly tailored and consistent with the terms of this ruling.

Please contact someone from our Labor & Employment group if you would like us to update your policies and/or Employee Handbook. Please don’t hesitate to reach out if you have any questions or concerns. Shelly M. Andrew, Amanda O’Halloran, Andrea H. McNeely, Chelsea Rauch, Owen Taylor, and Nadine Khalidi