Westphal’s former employer, a competing wheelchair manufacturer called Permobil, has sued him in federal court in an attempt to force him out of his job and reap monetary damages. They allege he took top-secret company information to their main competitor but have yet to produce much evidence and remain vague about the supposed information.
This story is part of Cascade PBS’s WA Workplace Watch, an investigative project covering worker safety and labor in Washington state.
The case hinges on Westphal’s former employment contract, which contained a clause stating that he would not accept a job with a competitor for 12 months after leaving the company. Known as noncompete agreements, these clauses have recently come under regulatory scrutiny for the power they give employers to bind workers’ job mobility and bargaining power. Once limited to high-level executives and specialized fields like engineering and medicine, noncompete clauses have proliferated widely across industries, becoming boilerplate contract language in fast-food and warehouse jobs.
Washington state placed significant restrictions on the enforcement of noncompetes in 2019, passing a law that included a ban for workers making under $100,000 per year. But Permobil has sidestepped that law by filing suit in a federal court in Tennessee, where the company’s U.S. operations are headquartered, and where a judge agreed to hear the case, even though Washington law explicitly voids labor contracts that force adjudication in other states.
“Like most companies in our industry – and indeed, in various sectors – Permobil employs non-compete agreements to safeguard our business operations,” a Permobil spokesperson wrote in an email to Cascade PBS. “These are typical for key roles, including leadership positions and those entrusted with sensitive information.”
Westphal, who did not have any direct reports, said he increasingly felt sidelined at Permobil and worried about his future at the company.
“Since the beginning I wanted to walk away quietly and say, ‘Hey, let me live my life,’” Westphal said. “It’s absolutely stupid what they’re doing. … I can’t think of a reason [for the lawsuit] other than pure arrogance, to bury us in legal bills.”
Free market competition
Prior to Washington’s law change, noncompete agreements bound one in four Washington workers earning earn less than $100,000 per year, according to recent research from the University of Maryland. Studies have found that they suppress wages, as the ability to change jobs is key to bargaining power, and that employees rarely read the fine print or bargain over contract language before accepting a job offer.
Companies contend they need noncompetes to protect trade secrets and encourage investments in worker training. And even some skeptics concede that under certain narrow circumstances, their use may be legitimate.
“I think there’s certainly a time and a place for them,” said Jonathan Harris, a Nashville-based attorney who has represented both sides in noncompete lawsuits and is currently defending Westphal. “If it is a CEO of Boeing who is thinking about going to Airbus, that’s an entirely different conversation.”
During state legislative hearings in 2019, hospital industry lobbyists argued that they offer expensive benefits to recruit nurse practitioners, physician assistants and technicians and noncompetes are “an important tool to protect those investments.”
“These people, it bears emphasizing, have strong bargaining positions and a lot of leverage,” a lobbyist for the Washington Hospital Association told legislators.
Detractors counter that the contracts are inherently – as the name implies – anticompetitive, unfairly restricting the labor market by allowing employers to coerce worker loyalty rather than compete fairly for it. They often point to California, crediting the state’s century-old law banning noncompetes for producing Silicon Valley’s dynamic culture of innovation.
Skepticism of noncompetes also crosses some ideological bounds: Two other states that ban them include the free-market havens of Oklahoma and North Dakota, where a 19th-century law protects an individual’s freedom in “exercising a lawful profession, trade, or business.”
Regulatory pressure came to a head this April when the Federal Trade Commission announced a near-total ban on noncompetes. The rule had not yet taken effect when a federal judge in Texas struck it down in August, arguing the federal agency overreached its authority. The FTC has appealed.
The University of Maryland research also found that restricting noncompetes increased wages by 4% for Washington workers in industries where noncompetes are common. Yet despite the law, employers from Amazon to nonprofit hospitals continue to retain or expand contract provisions that impose similar constraints on low- and medium-wage workers by rebranding them under different labels.
How do companies enforce them?
A recent analysis of Washington court records covering much of the state suggested that very few companies actually go to court to enforce noncompetes. Prior to the law taking effect, companies filed an average of 10 lawsuits per year, and that figure has dropped to 2.7 per year since.
“That’s one piece of evidence to suggest that they’re largely tools of intimidation,” said University of Maryland economist Evan Starr. He collected the data as part of a recent paper titled “Do firms value court enforceability of noncompete agreements?”
Starr tested this question by looking at salary distributions in Washington state in the years since the 2019 law made it illegal to enforce noncompetes on workers making under $100,000 per year. (That threshold rises with inflation and will hit $123,394 in 2025.) Starr looked at whether companies gave raises that kept employees above the threshold so they could legally enforce noncompetes, which would result in “bunching” just above the threshold.
“The question is, do companies put their money where their mouth is?” Starr said. “Are you willing to pay a little bit more for the opportunity to have the courts potentially enforce these contracts?”
The study found no evidence that firms, broadly speaking, were willing to do so.
Rebranding noncompetes
Companies rarely need to go to court to enforce noncompetes, said Timothy Emery, an attorney at a Seattle firm that has filed numerous lawsuits against companies alleging violations of the new law. All they need to do is send a threatening letter, and that’s usually enough to scare the worker into compliance.
Emery recently filed a proposed class action against Amazon that included a copy of an employment agreement that warehouse and grocery workers were required to sign. It contained broad language limiting the workers’ actions for 18 months after they left and required them to provide a copy of the contract to prospective employers.
Emery said companies are finding clever ways to get around the law, like disguising them as “non-solicitation agreements,” which traditionally seek to prevent workers from recruiting clients to a new company.
“It’s not that employers don’t value noncompetes,” Emery said. “It’s just that they believe they can get them without paying for them.”
Emery added that the language in the Amazon contract is so broad that it would be almost impossible to advise a client on their options.
“They have a license to come after you for almost any reason,” he said. “Amazon can sue you into oblivion.”
Amazon previously promised to stop using noncompetes on warehouse workers after The Verge revealed the practice in 2015. The company later lobbied Washington lawmakers to lower the pay threshold to exclude much of its Seattle tech workforce. A spokesperson recently told The Seattle Times that they “disagree with the facts” in Emery’s lawsuit.
Nursing residents face a similar type of contract clause in which hospitals make them pay thousands of dollars for training if they quit before a specified period. Such “stay-or-pay” provisions have become standard practice in nursing over the past two decades, said Pamela Chandran, legal services director for the Washington State Nurses Association, a union that negotiates collective bargaining agreements on behalf of nurses at more than 50 medical facilities across the state.
She views the training repayment clauses as a tool for hospitals to bully residents – who are typically recent nursing school graduates – into staying at jobs they dislike.
“It really is unfortunate that noncompetes, which are theoretically designed to prevent your top earners from taking your top clients, have really only been enforced against the least experienced, most vulnerable employees at the very beginning of their career,” Chandran said.
Some hospitals have removed stay-or-pay provisions in the past six months, Chandran said – but only after the union confronted their legality or negotiated them out during collective bargaining.
The National Labor Relations Board has said it views many noncompete and “stay-or-pay” provisions as unlawful, and issued a complaint against MultiCare Good Samaritan Hospital in Puyallup earlier this year. MultiCare’s most recently available contract, which expired in 2023, required resident nurses to pay the hospital $2,000 unless they continued working there for at least two years after completing their residency.
Enforcement of Washington’s law
The text of the noncompete law specifically empowers the Attorney General to pursue legal remedies against companies that enforce invalid contracts. Westphal filed a complaint, but was told that there is not much the AG can do because the case is being tried in Tennessee. An attorney in the antitrust division later met with him and was briefed on the case, Westphal said, but has not followed up since. He described feeling frustrated by the state’s seeming inability to enforce its own laws.
“If you’re not going to enforce a law, then why come up with one?” Westphal said.
The Attorney General’s office declined to comment on Westphal’s situation, citing a policy of not confirming or denying whether an investigation is taking place. Colleen Melody, Civil Rights Division Chief, said that due to limited resources and a statewide scope, the office looks for cases involving a policy or practice that harms multiple workers.
The Attorney General’s office has taken formal legal action under the new law against one Ohio-based staffing agency, Tradesmen International, in 2022. Tradesmen International agreed to pay just over $287,000 to settle complaints that they forced more than 1,000 construction workers to sign contracts preventing them from finding permanent positions with their host employers, even after their temporary jobs ended. A press release at the time said that money would go toward restitution for affected workers.
Attorney General’s office spokesperson Brionna Aho said the volume of complaints related to noncompetes has declined from over 30 in 2021 to just 10 in 2024. Aho noted that those include questions and other inquiries not alleging wrongdoing.
Company loyalty
Westphal helped start a company in the late 1990s called Ti-Lite that manufactured golf clubs, bicycle frames and wheelchairs. Eventually, Permobil, a Swedish company, bought Ti-Lite. Over a 26-year career, he worked his way up and became the second-longest-tenured employee in Pasco, where the company employed some 230 people in 2019, according to the Tri-City Herald.
As the wheelchair manufacturing industry goes, Westphal is far from the only person to transition between competitors. The current CEO of Westphal’s new company, Larry Jackson, was previously the CEO of Permobil. And Westphal’s new boss at Sunrise also used to work for Permobil, as the company noted in its complaint.
Find tools and resources in Cascade PBS’s Check Your Work guide to search workplace safety records and complaints for businesses in your community.
As one of the last out the door, Westphal thinks Permobil wants to make an example of him as a warning to current employees. Permobil declined to answer detailed questions about their enforcement of noncompetes, but a review of federal court records did not turn up other similar Permobil lawsuits.
For its part, Sunrise has paid for Westphal’s defense thus far, but told him last month they were unable to support him any longer. Westphal is doing all right financially, but worries that costs could mount quickly as he faces medical issues and a 2025 trial that threatens his livelihood (he recently sold a boat and travel trailer in anticipation). If he loses the case, he may have to pay Permobil’s legal fees, which could top one million and “bankrupt me in a second.”
About two months after Permobil filed the lawsuit, Westphal began experiencing mobility issues. A former golf pro and avid hiker, he was now struggling to walk. His doctors have yet to identify a diagnosis, but he said they think it could be neurological and stress-related. When his son got married in August, he was on the dance floor, but in a wheelchair, which he now uses whenever he leaves the house.
“That’s probably the hardest thing for me is knowing how this has affected my family,” Westphal said, sitting next to photos of his 18-month-old granddaughter. His voice caught a bit, and he turned his head to look out the window before continuing. “Because I want to be the dad that I was, and the grandpa.”
The National Labor Relations Board has separately issued a complaint against Permobil, but it is unlikely to be resolved before a Tennessee jury decides Westphal’s case.
Even Westphal acknowledges some noncompetes may have value. But in his view, companies have abused them as a substitute for creating a desirable work environment. He noted that when he resigned, no one at the company asked if there were anything they could do to incentivize him to stay.
“If you create an environment where people want to work, they will stay,” he said. “I think the reason why companies … try to put the fear of God in their employees is because that’s the only way they can keep people.”
