In Washington, what is the minimum annualized earnings threshold for a noncompetition covenant to be enforceable against an employee of a Dog Haus franchisee?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.
A release or waiver of rights executed by a franchisee shall not include rights under the Washington Franchise Investment Protection Act, except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the 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 act
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, in the state of Washington, a noncompetition covenant is void and unenforceable against an employee of a Dog Haus franchisee if the employee's earnings from the party seeking enforcement, when annualized, do not exceed $100,000 per year. This amount will be adjusted annually for inflation.
This means that if a Dog Haus franchisee in Washington wants to enforce a non-compete agreement against a former employee, that employee must have been earning more than $100,000 annually (adjusted for inflation) while employed by the franchisee. If the employee's earnings were below this threshold, the non-compete agreement is not legally enforceable.
This provision is specific to Washington state law (RCW 49.62.020) and is designed to protect employees from overly restrictive non-compete agreements, especially those who are not highly compensated. Dog Haus acknowledges that any provisions in the franchise agreement that conflict with these limitations are void and unenforceable in Washington. This addendum ensures compliance with Washington state law, which aims to balance the interests of employers in protecting their business with the rights of employees to seek employment freely.