In Washington, what is the minimum annualized earnings threshold for a Chem Dry franchisee independent contractor for a noncompetition covenant to be enforceable?

According to Chem Dry's 2024 Franchise Disclosure Document, in Washington, a noncompetition covenant is only enforceable against an independent contractor if their annualized earnings from the party seeking enforcement exceed $250,000 per year. This amount will be adjusted annually for inflation. This means that if a Chem Dry franchisee in Washington hires an independent contractor, any non-compete agreement they have with that contractor is only enforceable if the contractor earns more than $250,000 annually (adjusted for inflation) from the franchisee.

This provision protects lower-earning independent contractors from being unduly restricted in their ability to work for others after their relationship with the Chem Dry franchisee ends. It ensures that non-compete agreements are only applied to those who are highly compensated and likely have significant influence or access to confidential information.

Prospective Chem Dry franchisees in Washington should be aware of this limitation when hiring independent contractors and drafting non-compete agreements. They should consult with legal counsel to ensure their agreements comply with Washington law and are enforceable only when the earnings threshold is met. This is particularly important for managing risk and protecting the Chem Dry business's interests while remaining compliant with state regulations.