In Washington, what is the minimum annualized earnings threshold for a Chem Dry franchisee's employee for a noncompetition covenant to be enforceable?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
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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 res
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, in the state of Washington, a noncompetition covenant is void and unenforceable against a Chem Dry franchisee's employee unless the employee's earnings, when annualized, exceed $100,000 per year. This amount will be adjusted annually for inflation.
This means that if a Chem Dry franchisee in Washington wants to enforce a non-compete agreement against an employee, that employee must be earning at least $100,000 annually. If the employee earns less than this threshold, the non-compete agreement is not legally enforceable. This protects lower-earning employees from being unduly restricted in their future employment opportunities.
Additionally, the FDD states that a noncompetition covenant is void and unenforceable against an independent contractor of a Chem Dry franchisee in Washington 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).