What is the annual earnings threshold for an employee of a Circle K franchisee in Washington for a noncompetition covenant to be enforceable?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
egotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such 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).
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, in the state of Washington, a noncompetition covenant is unenforceable against an employee of a Circle K franchisee if the employee's annualized earnings from the party seeking enforcement do not exceed $100,000 per year. This amount is subject to annual adjustments for inflation. This stipulation is based on RCW 49.62.020.
This means that if a Circle K franchisee in Washington wants to enforce a non-compete agreement against an employee, that employee must be earning more than $100,000 annually (adjusted for inflation). If the employee earns less than this threshold, the non-compete agreement is considered void and unenforceable under Washington law. This protects lower-earning employees from being unduly restricted in their future employment opportunities.
This provision also extends to independent contractors of a Circle K franchisee, with a higher earnings threshold of $250,000 per year (adjusted for inflation) for non-competition covenants to be enforceable, as per RCW 49.62.030. Any conflicting provisions within the franchise agreement or other documents are void and unenforceable in Washington, ensuring compliance with state law.