What is the minimum annualized earnings threshold for a noncompetition covenant to be enforceable against a Crisp & Green franchisee's employee in Washington?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
ease or waiver of rights executed by a franchisee may not include rights under the WashingtonFranchise InvestmentProtectionActor anyruleororderthereunder exceptwhen executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are representedbyindependent counsel. Provisionssuchasthosewhichunreasonably restrict orlimit the statute oflimitations period for claims underthe Act, orrights orremedies underthe Actsuch 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 costsin effecting a transfer.
PursuanttoRCW49.62.020, a noncompetitioncovenantis void and unenforceable against an employee,includinganemployeeofafranchisee,unlesstheemployee'searningsfromthe 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 unenforceableagainstanindependentcontractorofafranchiseeunderRCW49.62.030unless the independent contractor's earningsfromthe party seeking
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, in the state of Washington, a noncompetition covenant is unenforceable against an employee of a Crisp & Green franchisee if the employee's annualized earnings from the franchisee are $100,000 or less. This threshold is subject to annual adjustments for inflation. This protection is codified under RCW 49.62.020.
This means that Crisp & Green franchisees in Washington cannot enforce non-compete agreements against employees who earn less than the annually adjusted $100,000 threshold. Any provisions in the franchise agreement that conflict with this limitation are void and unenforceable in Washington. This ensures that lower-earning employees are not unduly restricted in their future employment opportunities.
Furthermore, Washington law, specifically RCW 49.62.060, prevents Crisp & Green from restricting a franchisee from soliciting or hiring any employee of another Crisp & Green franchisee or any employee of Crisp & Green itself. This provision is designed to promote fair competition and mobility among employees within the Crisp & Green franchise system in Washington. Any conflicting terms in the franchise agreement are void and unenforceable in Washington.