For C12 Group franchises in Washington, what is the effect of a noncompetition covenant on an employee if their earnings are below the threshold?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
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 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 Washington.
RCW 49.62.060 prohibits a franchisor from restricting, restraining, or prohibiting a franchisee from (i) soliciting or hiring any employee of a franchisee of the same fra
Source: Item 23 — RECEIPTS (FDD pages 46–137)
What This Means (2025 FDD)
According to the 2025 FDD, for C12 Group franchises operating in Washington, a noncompetition covenant is void and unenforceable against an employee 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 extends to employees of a franchisee.
This means that C12 Group franchisees in Washington cannot enforce non-compete agreements against employees who earn less than the specified threshold. This limitation is in place to protect lower-earning employees from being unduly restricted in their ability to seek other employment opportunities. The FDD stipulates that any provisions within the franchise agreement or elsewhere that conflict with these limitations are void and unenforceable in Washington.
Prospective C12 Group franchisees in Washington should be aware of this legal restriction as it directly impacts their ability to retain employees through non-compete agreements. They should consult with legal counsel to ensure their employment agreements comply with Washington state law and to understand the implications for their business operations. This also means that C12 Group cannot prevent a franchisee from hiring or soliciting employees of another franchisee or C12 Group itself.