Under Washington law, what is the minimum annualized earnings threshold for a noncompetition covenant to be enforceable against a Belocal franchisee's employee?

According to Belocal's 2025 Franchise Disclosure Document, Washington state law impacts the enforceability of noncompetition covenants for employees of Belocal franchisees. Specifically, pursuant to RCW 49.62.020, a noncompetition covenant is void and unenforceable against an employee if their annualized earnings from the party seeking enforcement do not exceed $100,000 per year. This threshold is subject to annual adjustments for inflation. This law applies equally to employees of Belocal franchisees.

For a prospective Belocal franchisee in Washington, this means that any non-compete agreements they attempt to enforce against their employees are only valid if the employee earns more than $100,000 annually (adjusted for inflation). If an employee's earnings are below this threshold, the non-compete agreement is legally unenforceable. This limitation is important for franchisees to consider when hiring and managing staff, as it affects their ability to restrict former employees from working for competitors.

Furthermore, the FDD clarifies that any provisions within the franchise agreement or other related documents that conflict with these earnings limitations are void and unenforceable in Washington. This ensures that Belocal franchisees operating in Washington are subject to the state's employment laws regarding noncompetition covenants. Franchisees should consult with legal counsel to ensure their employment agreements comply with Washington law and to understand the implications for their business operations.