Domino’s Among Franchises Under Investigation for Enforcing No Poaching Employees Clause

Domino’s is among the restaurants still under investigation for including a no poaching employees clause in their franchise contracts.

Washington Attorney General Bob Ferguson has successfully stopped 23 different fast food companies from placing a no poaching employees clause in their contracts with franchises. For years, wages among fast food workers have been artificially low, allegedly because of the little-known provision added to contracts that employees never see.

A no poaching employees clause effectively prevents franchise employees from transferring to a different location within the same company, whether they wish to do so to pursue better pay, a promotion, a location closer to their home or any other reason.

The businesses claim each franchise devotes time and effort to training its employees, which makes it unfair for an employee to transfer to another location; the employee’s original location is stuck hiring and training another new employee. Businesses add that low wages also allow menu prices to remain low, enabling franchises to offer customers deals such as $1 menu items and $5 complete meals.

Ferguson said in a recent statement, “Businesses can’t rig the system to avoid competition. Other fast-food companies that use no-poach provisions are now on the clock to accept a similar deal or face litigation from my office.”

No Poaching Employees Clause Investigations Continue

Ferguson is continuing to investigate Domino’s, Baskin Robbins, Quiznos, Firehouse Subs and Jersey Mike’s.

“My goal is to eliminate no-poach clauses nationwide to benefit workers,” said Ferguson. “No-poach provisions create a rigged system where businesses no longer have to compete for workers, putting downward pressure on wages nationwide. That’s wrong and illegal.”

Ferguson ordered the Antitrust Division to investigate no poaching clauses after Princeton economists Alan Krueger and Orley Ashenfelter brought attention to the provisions

Even though the no poaching employees clause only appears in the contract between the company and the franchise, the employees are the ones who pay the price for the restrictions because they suffer from stagnated wages and severe limitations on advancement opportunities, said the economists. They looked at 156 franchise agreements from the year 2016 that were enforced by the largest franchised businesses in America.

When Ferguson’s Antitrust Division investigated 31 different businesses, only Hissho Sushi, Long John Silver’s and Wendy’s excluded no poaching employees clauses from their franchise contracts.

As a result of Ferguson’s investigation, McDonald’s, Carl’s Jr., Arby’s, Auntie Anne’s, Buffalo Wild Wings, Cinnabon and Jimmy John’s are the other companies that discontinued placing the no poach clauses in new agreements and agreed to stop enforcing the no poaching clause in current agreements.

Applebee’s, IHOP, Five Guys Burgers & Fries, Panera Bread, Church’s Chicken, Jamba Juice, Little Caesars and Sonic all recently agreed to remove their no poaching employees clause from their franchise contracts, too, according to Ferguson’s office.

If you work at Domino’s and believe your wages or advancement prospects have been limited by a potential no poaching employment clause, you could be eligible to participate in this lawsuit investigation.

Join a Free Fast Food Employee Poaching Class Action Lawsuit Investigation

If you work for McDonald’s, Jimmy John’s, Pizza Hut, Little Caesars, Papa John’s, Domino’s, Burger King or Arby’s and were prevented from moving to a different franchise that is part of the same company, you may have been the victim of a no-poach agreement. If so, you may qualify to participate in this employee poaching class action lawsuit investigation.

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