7 Fast-Food Chains Agree to End No-Poaching Deals

Restaurant chains scrutinized for noncompetitive hiring practices

By Roy Maurer Jul 16, 2018
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​Seven fast-food restaurant chains, including Arby's, Carl's Jr., McDonald's and Jimmy John's, agreed to stop enforcing no-poaching agreements which critics say prevent workers from switching jobs, locking them into low-paying positions and contribute to wage stagnation.

The companies agreed to remove no-poaching clauses from their contracts with franchisees in Washington State and to stop enforcing them nationwide. Auntie Anne's, Buffalo Wild Wings and Cinnabon also agreed to drop the clauses, which for example, prevent a worker from one Carl's Jr. franchise from going to another Carl's Jr. They do not stop those workers from taking jobs at restaurants run by a different chain.

(The New York Times)

We've rounded up SHRM Online resources and articles from other trusted media outlets on the news.

AGs Probe Fast-Food Franchises

The attorneys general from California, Massachusetts, New York, seven other states and Washington, D.C., sent letters to eight restaurant chains—Arby's, Burger King, Dunkin' Donuts, Five Guys Burgers and Fries, Little Caesars, Panera Bread, Popeyes Louisiana Kitchen and Wendy's—requesting information about their franchisee recruitment and hiring practices.

According to the attorneys general, the practice is common among franchisees, but most prevalent in the restaurant industry, where 80 percent of fast-food franchisors have no-poach provisions in their franchise agreements.

(The New York Times)

Franchisees Are Protecting Their Investment

The International Franchise Association, a trade group, said franchising offers career advancement and noncompete and no-poaching clauses in franchisee contracts help protect the investment employers make in training their workers.

(USA Today)

Justice Department Targets No-Poaching Agreements

Officials say employers should expect criminal enforcement of potential violations of antitrust law prohibiting no-poaching agreements.

(SHRM Online)

Congress Considers Banning Noncompete Practices

Congressional Democrats unveiled legislation in April aimed at stopping employers from entering into no-poaching agreements and requiring workers to sign noncompete clauses in employment contracts. The bill's sponsors say these are anti-competitive practices that hurt workers and limit their mobility.

(SHRM Online)

Businesses Must Be Careful When Crafting Noncompetes

Employers may want to use noncompetes and other restrictive agreements to protect their business interests, but they must be careful not to overreach. Some state legislatures have significantly limited—or are considering legislation to limit—the permissible terms of such agreements.

(SHRM Online)

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