Under Washington law, what is the minimum annualized earnings threshold for a noncompetition covenant to be enforceable against a Belocal franchisee's independent contractor?
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, Washington state law impacts the enforceability of non-competition covenants against independent contractors working for a Belocal franchisee. Specifically, under RCW 49.62.030, a noncompetition covenant is only enforceable if the independent contractor's annualized earnings from the franchisee exceed $250,000 per year. This threshold will be adjusted annually for inflation.
This legal requirement means that Belocal franchisees in Washington cannot enforce non-compete agreements against independent contractors who earn less than $250,000 annually. Any provisions in the franchise agreement or other documents that conflict with this earnings threshold are considered void and unenforceable in Washington.
For a prospective Belocal franchisee in Washington, this has significant implications for managing their workforce. They need to be aware that non-compete agreements have limited enforceability and should consider alternative methods to protect their business interests, such as strong confidentiality agreements or non-solicitation clauses that do not run afoul of Washington law. Franchisees should consult with legal counsel to ensure their agreements comply with Washington state law.