No Poach Agreements Among Franchises Hurt Employees

While working for one franchise, have you been denied employment at another franchise operating under the same name?  If so, you may be the victim of unfair business practices and have been denied compensation.

Many employees who work for franchises, whether it be a McDonald’s, Wendy’s, Jiffy Lube, etc. are covered by restrictive terms in contracts that they don’t even know about.  Numerous franchising companies require anyone who obtains a franchise from them to agree that they will not solicit or hire any employee working for another franchisee under that same name.  As an example, McDonald’s had required all persons who own any McDonald’s franchises to never solicit or hire any employees who worked at other McDonald’s franchises.  Employees working there had no idea that the job market they worked in was limiting their opportunities, and ultimately suppressing wages.  In June 2016, the Attorney General of Illinois took action against Jimmy John’s to challenge the patently unfair Employee Non-Competition Agreements. According to the Chicago Tribune, Attorney General Madigan noted that “By locking low-wage workers into their jobs and prohibiting them from seeking better paying jobs elsewhere, the companies have no reason to increase their wages or benefits.”  So, if an employee at one McDonald’s was willing and able to work at a McDonald’s run by another franchisee, they could not get that job if the wanted to due to these “no poach” agreements.  Many believe that these agreements are illegal and violate the federal (and possible state) anti-trust laws.  These agreements limit employees’ ability to earn higher wages and a choice of where they work.  These types of agreements are very common in the fast food industry.  A number of franchises have had these agreements, including: McDonald’s, Wendy’s, Pizza Hut, Cinnabon, Domino’s Pizza, and Dunkin’ Donuts. If you worked for a franchise, and were denied employment by another franchisee operating under the same name, you may have been a victim of collusion that suppressed your wages.  Call our office and let’s see if we can help you.

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To see how the employment lawyers at Donelon, P.C., can help in your case, contact us online or call us at 816-221-7100 and schedule a free initial consultation.

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