In Washington, what is the minimum annualized earnings threshold for an independent contractor of an Engel & Volkers franchisee for a noncompetition covenant to be enforceable?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
nant 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, exceed $250,000 per year (an amount that will be adjusted annually for inflation). As a result, any provisions contained in the Franchise Agreement or elsewhere that conflict with these limitations are void and unenforceable
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 63–71)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, there are different earnings thresholds for employees versus independent contractors in Washington state regarding the enforceability of noncompetition covenants. For an employee of an Engel & Volkers franchisee, the minimum annualized earnings threshold is $100,000 per year. However, for an independent contractor of an Engel & Volkers franchisee, the minimum annualized earnings threshold is $250,000 per year. Both of these amounts will be adjusted annually for inflation.
This means that in Washington, Engel & Volkers franchisees can only enforce non-compete agreements against independent contractors whose annualized earnings exceed $250,000, as adjusted for inflation. If an independent contractor earns less than this amount, the non-compete agreement is considered void and unenforceable under Washington law. This is a higher threshold than for employees, reflecting potentially different levels of bargaining power or the nature of the relationship.
For a prospective Engel & Volkers franchisee in Washington, this information is crucial for understanding the limitations on non-competition agreements. They must be aware that non-competes are only enforceable against higher-earning independent contractors. This may influence their decisions about whom to hire as independent contractors and how to structure compensation packages. Franchisees should consult with legal counsel to ensure their non-competition agreements comply with Washington law and are enforceable.