QSRs To End ‘No Poaching’ Policies

Seven chains will stop practices that could limit employee wages and chance of advancement.

July 16, 2018

SEATTLE – McDonald's, Auntie Anne's, Arby's, Carl's Jr., Jimmy John's, Cinnabon and Buffalo Wild Wings have agreed to abolish “no poaching” policies among their franchisees, according to U.S. News.

As seen in NACS Daily last week, the policies were used to prevent franchises from hiring away workers from fellow franchisees within the same chain. Franchise owners were concerned that employees they’d trained could move to another franchisee’s operation for higher wages or a better position.

In separate agreements filed in a Seattle court, the companies denied that their policies are illegal, but said they wanted to avoid expensive litigation. A coalition of 11 Democratic state attorneys general had announced investigations into the no-poach agreements at several chains, including Burger King, Dunkin' Donuts, Five Guys Burgers and Fries, Little Caesars, Panera Bread, Popeyes and Wendy's.

Robert Cresanti, head of the International Franchise Association, sent a letter to lawmakers in June explaining that many fast-food operations have already discarded no-poaching policies. But he added that to guard the rights of the franchise owners, such policies may be necessary to protect training methods or investments a franchise owner has made in training. In such cases, the policies should be applied in a limited manner so as to not restrict workers more than necessary, he added.

No-poach agreements are illegal under antitrust laws because they restrict competition for employees, keep wages low and potentially deprive workers of better job opportunities, according to the U.S. Justice Department.

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