In Washington, can Deck Medic restrict a franchisee from soliciting or hiring any employee of another Deck Medic franchisee?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
iolation of the Washington Franchise Investment Protection Act, in Washington.
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- A release or waiver of rights executed by a franchisee may not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated settleme
Source: Item 23 — RECEIPTS (FDD pages 43–228)
What This Means (2024 FDD)
According to Deck Medic's 2024 Franchise Disclosure Document, Washington state law impacts the enforceability of non-competition covenants. Specifically, RCW 49.62.020 states that 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. This amount is subject to annual adjustments for inflation.
This means that Deck Medic cannot enforce a non-competition agreement against a franchisee's employee in Washington unless that employee's annualized earnings exceed $100,000 (subject to inflation adjustments). This limitation applies regardless of any conflicting terms in the franchise agreement itself. Therefore, Deck Medic franchisees in Washington have a limited ability to restrict their employees from working for another Deck Medic franchisee if the salary threshold is not met.
This Washington-specific amendment to the franchise agreement is important for prospective Deck Medic franchisees in the state. It highlights that state laws can override certain provisions in the standard franchise agreement, particularly concerning employee restrictions. Franchisees should be aware of this limitation when hiring and managing employees, as it affects their ability to prevent employees from moving to competing Deck Medic franchises or businesses. It is advisable to consult with a legal professional to fully understand the implications of this law and how it applies to their specific situation as a Deck Medic franchisee in Washington.