In Washington, can Deck Medic restrict a franchisee from soliciting or hiring any employee of the Deck Medic franchisor?
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 enforcement of non-competition covenants. Specifically, 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. This amount will be adjusted annually for inflation.
This means that Deck Medic cannot enforce a non-competition agreement against a franchisee's employee in Washington if that employee's annualized earnings are $100,000 or less (subject to inflation adjustments). This limitation is imposed by Washington state law, which takes precedence over any conflicting terms in the franchise agreement.
For a prospective Deck Medic franchisee in Washington, this has significant implications for hiring and employee retention. The franchisee needs to be aware that any non-compete agreements they attempt to enforce will be subject to this earnings threshold. If they wish to restrict an employee earning less than the threshold from working for a competitor, they will likely be unable to do so under Washington law. This could impact their ability to protect their business interests and confidential information, especially for lower-paid positions.