How often is the employee earnings threshold adjusted for inflation regarding non-competition covenants for City Publications franchisees in Washington?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
fter 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). In addition, a noncomp
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, in Washington, the employee earnings threshold related to non-competition covenants is adjusted annually for inflation. Specifically, a noncompetition covenant is unenforceable against an employee of a City Publications franchisee if the employee's annualized earnings from the franchisee exceed $100,000 per year, with this amount being adjusted annually for inflation. Similarly, a noncompetition covenant is unenforceable against an independent contractor of a City Publications franchisee if their annualized earnings exceed $250,000 per year, also adjusted annually for inflation.
This means that the specific dollar amounts that trigger the enforceability of non-competition agreements will change each year to reflect changes in the cost of living. Franchisees in Washington need to be aware of these annually adjusted thresholds when drafting and enforcing non-competition agreements with their employees and independent contractors. Failure to adhere to these thresholds could render the non-competition agreements void and unenforceable.
This provision aims to protect lower-earning employees and independent contractors from overly restrictive non-competition agreements, ensuring they can seek other employment opportunities without undue constraints. By adjusting the earnings thresholds annually for inflation, the law ensures that the protection remains relevant and effective over time, reflecting changes in economic conditions. City Publications franchisees should consult with legal counsel to ensure their non-competition agreements comply with Washington law and are updated to reflect the current earnings thresholds.