How often is the minimum earnings threshold adjusted for inflation regarding noncompetition covenants for Chesters franchisee employees in Washington?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
agreements require a franchisee to reimburse 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 un
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, in Washington state, the minimum earnings threshold for noncompetition covenants is adjusted annually for inflation. Specifically, a noncompetition covenant is unenforceable against a Chesters franchisee's employee if their annualized earnings are $100,000 or less. This amount is subject to annual adjustments for inflation.
Similarly, a noncompetition covenant is unenforceable against an independent contractor of a Chesters franchisee if their earnings are $250,000 or less, with this amount also being adjusted annually for inflation. This means that each year, these income thresholds will be recalculated to account for changes in the cost of living, potentially affecting the enforceability of noncompetition agreements.
This adjustment protects lower-earning employees and independent contractors from overly restrictive noncompetition agreements, ensuring that such covenants are only applied to individuals with higher income levels. For a prospective Chesters franchisee in Washington, this means they need to be aware of the annually adjusted income thresholds when drafting or enforcing noncompetition agreements with their employees or independent contractors to ensure compliance with Washington state law.