What is the minimum annualized earnings threshold for a noncompetition covenant to be enforceable against an employee of a Del Taco franchisee in Washington?

According to Del Taco's 2025 Franchise Disclosure Document, specifically the Washington Addendum, a noncompetition covenant is only enforceable against an employee of a Del Taco franchisee if the employee's annualized earnings exceed $100,000. This threshold will be adjusted annually for inflation. This means that if a Del Taco franchisee in Washington wants to enforce a non-compete agreement against an employee, that employee must be making at least $100,000 per year, or the adjusted amount for inflation at the time of enforcement.

This provision is based on Washington state law (RCW 49.62.020), which aims to protect employees from overly restrictive non-compete agreements, especially those with lower earnings. The law also states that any conflicting provisions in the Development Agreement or other related agreements are void and unenforceable in Washington. This ensures that the state law takes precedence over any standard terms in the franchise agreement that might be more restrictive.

For a prospective Del Taco franchisee in Washington, this means they need to be aware of this earnings threshold when considering non-competition agreements with their employees. They should consult with legal counsel to ensure that any non-compete agreements comply with Washington law and are enforceable. It also highlights the importance of keeping abreast of any annual adjustments to the $100,000 threshold due to inflation, as this could affect the enforceability of existing or future non-compete agreements.