In Washington, what is the minimum annualized earnings threshold for an employee of a Southern Steer franchisee for a noncompetition covenant to be enforceable?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
ransfer.
Pursuant to RCW 49.62.020, a noncompetition 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 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 and Multi-Unit Development or elsewhere that conflict with these limitations are void and unenforceable in Wa
Source: Item 5 — and 7 of the FDD, Section 3.1 of the Franchise Agreement and Section 4.1 of the Multi-Unit Development Agreement are hereby amended to state that payment of the initial franchise fee and development fee will be deferred until We have satisfied Our pre-opening obligations, and You have commenced business operations. (FDD pages 168–290)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, in the state of Washington, a noncompetition covenant is unenforceable against an employee of a Southern Steer franchisee if the employee's annualized earnings from the party seeking enforcement do not exceed $100,000 per year. This amount will be adjusted annually for inflation.
This means that if a Southern Steer franchisee in Washington wants to enforce a non-compete agreement against an employee, that employee must be earning at least $100,000 annually. If the employee earns less than this threshold, the non-compete agreement is considered void and unenforceable under Washington state law.
This provision also states that any conflicting terms in the Southern Steer Franchise Agreement or Multi-Unit Development Agreement are void and unenforceable in Washington. This ensures that the franchise agreement adheres to Washington state law regarding non-competition covenants.