Under what earnings threshold is a noncompetition covenant void and unenforceable against an employee of a Learningrx franchisee in Washington?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
stment Protection Act, Chapter 19.100 RCW shall prevail.
A release or waiver of rights executed by a franchisee may not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder 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 actual costs in effecting a transfer.
Pursuant to RCW 49.62.020, a noncompetition co
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, in the state of Washington, a noncompetition covenant is void and unenforceable against an employee of a Learningrx franchisee if the employee's annualized earnings from the franchisee are $100,000 or less. This threshold is subject to annual adjustments for inflation. This protection is provided under RCW 49.62.020.
This means that Learningrx franchisees in Washington cannot enforce non-compete agreements against employees who earn $100,000 per year or less, as adjusted for inflation. This limitation is designed to protect lower-earning employees from being unduly restricted in their ability to seek other employment opportunities. The FDD clarifies that any conflicting provisions within the franchise agreement are void and unenforceable in Washington state.
For Learningrx franchisees operating in Washington, it's crucial to understand this legal limitation when drafting and implementing employment agreements. They should consult with legal counsel to ensure their agreements comply with Washington law. Franchisees should also stay informed about annual inflation adjustments to the earnings threshold to ensure continued compliance. This Washington state law does not prevent Learningrx franchisees from enforcing non-compete agreements against independent contractors 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).