What is the effect of RCW 49.62.020 on Best Brains' noncompetition covenants with employees?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
rdance with RCW 19.100.220(2).
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- Franchisor's Business Judgement. Provisions in the franchise agreement or related agreements stating that the franchisor may exercise its discretion on the basis of its reasonable business judgment may be limited or superseded by RCW 19.100.180(1), which requires the parties to deal with each other in good faith.
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- Indemnification. Any provision in the franchise agreement or related agreements requiring the franchisee to indemnify, reimburse, defend, or hold harmless the franchisor or other parties is hereby modified such that the franchisee has no obligation to indemnify, reimburse, defend, or hold harmless the franchisor or any other indemnified party for losses or liabilities to the extent that they are caused by the in
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, RCW 49.62.020 directly impacts the enforceability of noncompetition covenants against employees, including those working for a Best Brains franchisee in Washington state. Specifically, a noncompetition covenant is void and unenforceable if the employee's annualized earnings from the party seeking enforcement do not exceed $100,000 per year. This threshold is subject to annual adjustments for inflation.
For Best Brains franchisees in Washington, this means that any noncompetition agreements they have with their employees are only enforceable if the employee earns more than the specified annual amount. If an employee's earnings are below this threshold, the noncompetition agreement is legally void. This also applies to independent contractors, but under RCW 49.62.030, their earnings must exceed $250,000 per year (also adjusted annually for inflation) for a noncompetition covenant to be enforceable.
This legal stipulation has significant implications for Best Brains franchisees in Washington. It limits their ability to restrict lower-earning employees from working for competitors after leaving their employment. The FDD explicitly states that any provision in the franchise agreement or other documents that conflicts with these limitations is void and unenforceable in Washington. Therefore, franchisees need to be aware of these legal restrictions when drafting and enforcing noncompetition agreements with their employees and independent contractors to ensure compliance with Washington state law.