In Washington, what is the minimum annualized earnings threshold for a Degree Wellness franchisee's employee for a noncompetition covenant to be enforceable?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
Pursuant to RCW 49.62.020, a noncompetition covenant is void and unenforceable against an employee, including an employee of Franchise Owner, 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).
As a result, any provisions contained in the Agreement or elsewhere that conflict with these limitations are void and unenforceable in Washington.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, in Washington, a noncompetition covenant is void and unenforceable against a Degree Wellness franchisee's employee 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 is based on Washington state law RCW 49.62.020.
This means that if a Degree Wellness franchisee in Washington wants to enforce a non-compete agreement against an employee, that employee must be earning at least $100,000 annually (adjusted for inflation). If the employee earns less than this threshold, the non-compete agreement is not legally enforceable. This protects lower-earning employees from being unduly restricted in their future employment opportunities.
Furthermore, the FDD states that any provisions in the franchise agreement that conflict with these limitations are void and unenforceable in Washington. This ensures that Degree Wellness franchisees operating in Washington are subject to the state's specific regulations regarding noncompetition covenants. Degree Wellness franchisees should be aware of these stipulations and consult with legal counsel to ensure their employment agreements comply with Washington law.