In Washington, does the annual earnings threshold for non-competition covenants for Boulder Designs franchisees' employees get adjusted for inflation?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
reasonable estimated or actual costs in effecting a transfer.
Pursuant to RW 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 wi
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 38–44)
What This Means (2025 FDD)
According to Boulder Designs's 2025 Franchise Disclosure Document, in Washington, non-competition covenants for employees of a Boulder Designs franchisee are subject to certain earnings thresholds. Specifically, 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 adjusted annually for inflation.
Similarly, a noncompetition covenant is unenforceable against an independent contractor of a Boulder Designs franchisee if their annualized earnings are below $250,000 per year, and this amount is also adjusted annually for inflation. These stipulations are based on Washington state law (RCW 49.62.020 and RCW 49.62.030, respectively).
This means that if a Boulder Designs franchisee in Washington wants to enforce a non-compete agreement against an employee or independent contractor, they can only do so if the employee's or contractor's earnings exceed the specified thresholds, which are adjusted for inflation each year. Any conflicting provisions in the franchise agreement are void and unenforceable in Washington, offering some protection to workers. Prospective franchisees in Washington should be aware of these limitations on non-competition agreements.