In Washington, what is the minimum annualized earnings threshold for an employee of a Best Western franchisee for a noncompetition covenant to be enforceable?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
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Agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.
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
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, in the state of Washington, a noncompetition covenant is void and unenforceable against an employee of a Best Western franchisee 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 codified in Washington state law under RCW 49.62.020.
This means that Best Western franchisees in Washington cannot enforce non-compete agreements against employees who earn less than $100,000 annually (adjusted for inflation). This limitation is designed to protect lower-earning employees from being unduly restricted in their ability to seek other employment opportunities. It also ensures that franchisees comply with Washington state labor laws regarding non-competition agreements.
Furthermore, the FDD states that any provisions within the franchise agreement or other documents that conflict with these limitations are void and unenforceable in Washington. This reinforces the primacy of Washington state law over the franchise agreement in this specific area. Best Western franchisees should be aware of this provision and ensure their employment agreements comply with Washington law to avoid potential legal issues.