In Washington, what is the minimum annualized earnings an employee of a Deka Lash franchisee must make for a noncompetition covenant to be enforceable?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
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 noncompetition covenant is void and unenforceable against an independent contractor of a franchisee under RCW 49.62.030 unless the independent contractor's earnings from the party seeking enforcement, when annualized,
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, in the state of Washington, a noncompetition covenant is only enforceable against an employee of a Deka Lash franchisee if the employee's annualized earnings exceed $100,000 per year. This amount will be adjusted annually for inflation.
For a prospective Deka Lash franchisee in Washington, this means that any non-compete agreements they wish to enforce on their employees are only valid if those employees earn above this threshold. If an employee's earnings are below $100,000 (adjusted for inflation), the non-competition covenant is considered void and unenforceable.
This provision is based on Washington state law (RCW 49.62.020), and any conflicting terms within the franchise agreement or other documents are also void and unenforceable in Washington. Deka Lash franchisees need to be aware of this limitation when drafting employment agreements to ensure compliance with Washington law.