State AGs Investigate No Poaching Agreements by Dunkin’ Donuts, Other Chains

Massachusetts Attorney General Maura Healey led a collection of 11 state attorneys general in an effort to stop a no poaching agreement between companies from being enforced among franchisors like Dunkin’ Donuts.  She and the other AGs sent a letter to eight national fast food chains regarding their no poach agreements and that such agreements can restrict employees from obtaining better jobs and higher wages.

“No-poach agreements unfairly limit the freedom of fast-food and other low-wage workers to seek promotions and earn a better living,” said AG Healey in a press release. “Our goal through this action is to reduce barriers and empower workers to secure better-paying and higher-skill jobs.”

The letter was sent July 9, and indicates 58 percent of major franchising companies add a no poaching agreement to their franchise agreements. Fast food franchises allegedly add such a no poaching agreement 80 percent of the time.

A no poaching agreement between franchisees means that if an employee at a Dunkin’ Donuts works at a location 30 minutes from his house, but a night manager position at a Dunkin’ Donuts location 10 minutes from his house become available, the employee won’t be considered for the promotion because the franchises have agreed not to hire workers away from each other.

No Poaching Agreement Between Companies Allegedly Exploits Workers

Most of the time, employees are unaware that a no poaching agreement exists among franchise locations. Advocates for workers say a no poaching agreement between companies has led to unnaturally stagnant wages, especially for workers in the fast food industry.

AG Healey’s letter alleges fast food workers have a more difficult time improving their earning potential by moving from one job or one location to another. Such restrictions keep workers from seeking or even applying for higher paying jobs at other franchise locations. Because the no poaching agreement between companies is never seen by the employees, they don’t realize their upward mobility and earning potential are affected by such a clause.

“The use of ‘no poach’ and ‘no hire’ agreements by national fast-food franchises unfairly exploits workers, especially low-wage workers,” said Pennsylvania AG Josh Shapiro. “Many workers only learn these agreements exist when they are denied the chance to advance to a better job, earn more money or obtain family-friendly schedule options. It’s wrong and I’m standing up and fighting for the rights of Pennsylvania workers to not be exploited.”

Arby’s, Burger King, Dunkin’ Donuts, Five Guys Burgers and Fries, Little Caesars, Panera Bread, Popeyes Louisiana Kitchen and Wendy’s all received the letter from the 11 attorneys general and were asked to provide copies of their franchise agreements and any documents showing communications related to clauses addressing the no poaching agreement between companies.

Attorneys general from California, District of Columbia, Illinois, Massachusetts, Maryland, Minnesota, New Jersey, New York, Oregon, Pennsylvania and Rhode Island participated in creating and sending the July 9^thletter.

If you believe your rights have been violated as a result of a no poaching agreement between companies, you could be eligible for compensation through legal means.