Under what earnings threshold is a noncompetition covenant void and unenforceable against an employee of a Belocal franchisee in Washington?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
. Pursuant to RCW 49.62.020, a noncompetition covenant is void and unenforceable against an employee, including an employee of a franchisee, unless the employee's earnings from the party seeking enforcement, when annualized, exceed $100,000 per year (an amount that will be adjusted annually for inflation). In addition, a noncompetition covenant is void and unenforceable against an independent contractor of a franchisee under RCW 49.62.030 unless the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year (an amount that will be adjusted annually for inflation). As a result, any provisions contained in the franchise agreement or elsewhere that conflict with these limitations are void and unenforceable in Washingto
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a noncompetition covenant is void and unenforceable against an employee of a Belocal franchisee in Washington if the employee's annualized earnings from the party seeking enforcement do not exceed $100,000 per year. This amount will be adjusted annually for inflation. This protection is provided under RCW 49.62.020.
This means that Belocal franchisees in Washington cannot enforce non-compete agreements against employees who earn less than the annually adjusted $100,000 threshold. Any provisions in the franchise agreement or other documents that conflict with this limitation are void and unenforceable in Washington. This ensures that lower-earning employees are not unduly restricted in their ability to seek other employment opportunities.
It is important to note that a different earnings threshold applies to independent contractors of a Belocal franchisee in Washington. A noncompetition covenant is void and unenforceable against an independent contractor if their earnings from the party seeking enforcement, when annualized, do not exceed $250,000 per year, also adjusted annually for inflation. Franchisees should be aware of these distinctions when drafting and attempting to enforce non-competition agreements.