Fast Food No Poaching Clauses Are Subject of Washington AG’s New Lawsuit

The Washington attorney general has continued his crusade against no poaching clauses, reaching agreements with seven companies and filing a lawsuit against another.

In October, Washington Attorney General Bob Ferguson announced that he had taken new steps in his fight against harmful no poaching clauses. Ferguson reached agreements with seven new companies: Anytime Fitness, Baskin Robbins, Circle K, Domino’s, Firehouse Subs, Planet Fitness and Valvoline.

No poaching clauses often appear in contracts between companies and franchise owners. However, employees are the ones who experience the negative consequences of no poaching clauses. No poaching clauses prevent employees from being hired to other franchise locations. This can prevent employees from seeking better pay or benefits, thereby stagnating the employment market.

Ferguson has taken many steps to eliminate no poaching clauses and has come to agreements with thirty corporations. Their agreements will remove no poaching clauses from over 85,000 locations nationwide.

However, Ferguson’s recent moves are the first time he has stepped outside of the typical agreements he has with companies. Anytime Fitness, Circle K, Planet Fitness and Valvoline have signed legally binding agreements with Ferguson to eliminate no poaching clauses and are the first companies to do so.

Additionally, Ferguson has taken legal action against Jersey Mikes, one of two remaining companies in Washington using no poaching clauses. The other remaining company is Quiznos. Jersey Mikes is reportedly the first corporation to face a lawsuit regarding no poaching clauses from Ferguson or any other state attorney general.

“No-poach clauses are an example of a rigged system that illegally harms workers,” stated Ferguson in a press release. “My goal is straightforward — eliminate them nationwide. Like Jersey Mike’s, corporations that refuse to eliminate no-poach clauses can expect a lawsuit from my office.”

In the no poaching lawsuit, Ferguson accuses Jersey Mikes of violating the antitrust provisions of the Washington Consumer Protection Act. He asks for a court order eliminating no poaching clauses in Jersey Mikes locations both in Washington and nationwide. Should the lawsuit go to trial, Jersey Mikes could face up to $500,000 in civil penalties and be forced to pay compensation to the attorney general’s Office for costs and fees.

Although Jersey Mikes says that it has stopped enforcing the no poaching clauses in their contracts, the company has reportedly refused to sign a legally binding agreement and remove the clauses. Without a legally binding agreement forcing the company to follow anti-trust laws, there remains the risk that it would return to enforcing no poaching clauses in the future.

“Jersey Mike’s violated the law for years by maintaining and enforcing no-poach clauses in its franchise contracts. After the Attorney General’s Office began investigating Jersey Mike’s use of no-poach clauses, Jersey Mike’s asserted that it stopped enforcing the no-poach clauses in its franchise contracts,” according to the press release. “Jersey Mike’s refused to affirmatively remove the no-poach clauses from its existing contracts. Whether or not a company enforces these provisions, their existence in current contracts remains unlawful.”

The Jersey Mikes No Poaching Lawsuit is Washington v. Jersey Mike’s Franchise Systems Inc., et al., Case No. 18-2-25822-7SEA, in the State of Washington King County Superior Court.

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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