What is the minimum annualized earnings threshold for a Big O Tires franchisee's employee for a noncompetition covenant to be enforceable in Washington state?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
imburse the franchisor for court costs or expenses, including attorneys' fees, such provision applies only if the franchisor is the prevailing party in any judicial or arbitration proceeding.
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- Noncompetition Covenants. 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 $250,00
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, in Washington state, a noncompetition covenant is void and unenforceable against an employee of a Big O Tires franchisee unless the employee's annualized earnings exceed $100,000 per year. This amount will be adjusted annually for inflation. This is based on RCW 49.62.020.
Additionally, a noncompetition covenant is void and unenforceable against an independent contractor of a Big O Tires franchisee if their annualized earnings do not exceed $250,000 per year, also subject to annual inflation adjustments. This is based on RCW 49.62.030.
This means that Big O Tires franchisees in Washington cannot enforce non-compete agreements against employees or independent contractors who earn less than these specified amounts. Any provision in the franchise agreement that conflicts with these limitations is void and unenforceable in Washington. This is a significant legal consideration for franchisees operating in Washington, as it limits their ability to restrict former employees or contractors from competing with their Big O Tires business.