What is the minimum annualized earnings threshold for an employee of a Churchs Chicken franchisee in Washington for a noncompetition covenant to be enforceable?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
such as a right to a jury trial, may not be enforceable.
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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.
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- 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 p
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 50–55)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, Washington state law impacts the enforceability of noncompetition covenants for employees of Churchs Chicken franchisees. Specifically, a noncompetition covenant is void and unenforceable against an employee of a Churchs Chicken franchisee 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 Churchs Chicken 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 provision aims to protect lower-earning employees from being unduly restricted in their future employment opportunities.
For a prospective Churchs Chicken franchisee in Washington, this information is crucial for understanding the limitations on non-competition agreements. They need to be aware that they cannot prevent employees earning less than the specified amount from working for a competitor, even with a non-compete agreement in place. This could impact staffing strategies and the protection of confidential business information.
It's also important to note that the $100,000 threshold is subject to annual adjustments for inflation, so franchisees need to stay informed about the current applicable earnings threshold to ensure compliance with Washington state law. Additionally, the FDD specifies a different threshold for independent contractors, which is $250,000 per year, also adjusted annually for inflation.