H&R Block Wants No-Poach Class Action Tossed

Tax preparation company H&R Block is looking to close a class action lawsuit filed by five former tax professionals who claim that the company’s long-standing no-poaching agreement in place with franchisees impedes on their ability to change jobs.

Four of the former employees have already dropped their claims and the only plaintiff still standing is Perry L. Benson, a tax analyst based in Chicago.

The motion filed in federal court by H&R Block states that the no-poaching clause that the plaintiff is arguing against did not exist during the time that she was employed. In addition, the motion argues that Benson’s claim is precluded by the four-year statute of limitations as she worked for the company for 10 years before filing the complaint.

“Finally, even if the non-solicit clause had existed during Plaintiff’s employment, Plaintiff would still lack Article III standing and Plaintiff’s allegations would otherwise be insufficient to state a claim because the challenged clause did not apply to Plaintiff,” the H&R Block motion argues.

Benson filed her class action lawsuit in February 2019 claiming that from January 2009 until at least May 2018, H&R Block conspired with their franchisees related to the recruitment of employees. These agreements, according to the class action lawsuit, encompassed a deal not to solicit or recruit each other’s employees without seeking approval first.

The conspiracy was put into place to restrict the plaintiffs and other employees job mobility and to repress their wages, salary and other benefits, the H&R Block class action lawsuit states.

“As a result, H&R Block employees, including Plaintiff and Class members, were unable to seek employment with any other H&R Block locations, and as a direct result, the No Poach agreements severely decreased employment options available to H&R Block employees,” Benson alleges.

The plaintiff also claims that H&R Block franchise offices are independent companies and compete with each other for business. Benson notes that of the 10,000 H&R Block office locations, 6,700 are corporate owned and 3,300 are franchisees.

Also, the plaintiff states that the franchisees have powers to make all decisions related to personnel. These decisions include recruitment, hiring, firing, and any day-to-day management of their employees.

The H&R Block class action lawsuit argues that the no-poach agreements entered into by the corporate office and between the franchisees deprived their workers of the “benefits of free and open competition by Defendants.”

“The No Poach clause was not only intended to protect H&R Block’s investment in the training of employees at corporate-owned offices, but was also to protect their interest in training of franchise employees who meet the exact same training requirements,” the plaintiff claims.

The class action lawsuit lists the following as potential Class Members: “All tax professionals and managers who worked at any H&R Block location in the United States, whether owned and operated by H&R Block or by its franchisees, during any time between January 1, 2009 and May 10, 2018.”

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The plaintiff is represented by Kasif Khowaja of the Khowaja Law Firm and Brian Murray and Lee Albert of Glancy Prongay & Murray.

The H&R Block No-Poaching Class Action Lawsuit is Benson v. H&R Block Inc., et al. Case No. 4:19-cv-00477-ODS, in the U.S. District Court for the Western District of Missouri.

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