What is the minimum annualized earnings threshold for a non-competition covenant to be enforceable against an employee of a Kidokinetics franchisee in Washington?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
der 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 non-competition 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 non-competition 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
Source: Item 23 — RECEIPT (FDD pages 59–205)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, a non-competition covenant is void and unenforceable against an employee of a Kidokinetics franchisee in Washington unless the employee's annualized earnings exceed $100,000. This amount will be adjusted annually for inflation. This means that Kidokinetics franchisees in Washington cannot enforce non-compete agreements against employees who do not meet this minimum earnings threshold.
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 extends similar protections to independent contractors, setting a higher earnings threshold of $250,000 per year for non-competition covenants to be enforceable against them.
For a prospective Kidokinetics franchisee in Washington, this information is crucial for understanding the limitations on enforcing non-compete agreements. They need to be aware that any provisions in their franchise agreement or other documents that conflict with these limitations are void and unenforceable in Washington. This could impact their strategies for protecting their business interests and retaining employees or independent contractors.