Dunkin Donuts Named in Antitrust Class Action Lawsuit over No Poach Clause

Dunkin Donuts is one of the latest fast food chains to be hit with litigation for allegedly using a no poach clause among its franchisees.

According to the class action lawsuit, Dunkin Donuts’ no poach clause allegedly violated antitrust laws and deprived employees the ability to seek out better job prospects in the fast food industry.

The proposed antitrust class action lawsuit recently named Dunkin Donuts and number of its franchisees as some of the most recent additions to list of fast food chains that allegedly implemented a no poach clause preventing their employees from getting increased wages and better benefits.

Two named plaintiffs in the lawsuit are Kayla A. and Prestige L. Each alleges she suffered different unfair instances created by the no poach clause.

According to the claim, Kayla had been forced to wait six months to receive a promised pay increase when switching restaurant locations. Prestige says she experienced similar issues, and alleges she was told she would have to wait six months before she could transfer restaurants. The antitrust class action lawsuit was on behalf of former employees of Dunkin Donuts franchises and joins similar claims lodged against Carl’s Jr. and other fast food companies.

Overview of No Poach Clause Problems for Employees

According to the claim, the alleged no poach clause between the fast food companies has “robbed class members millions of dollars-worth of wages.” The no poach clause allegedly violates New York antitrust laws and the Sherman Antitrust Act, which forbids companies from entering agreements that would interfere with a healthy market environment.

According to the lawsuit, Dunkin Donuts and other fast food chains had entered an agreement not to hire each other’s employees or to approach them with better job opportunities.

The companies allegedly did this “for the express purpose of depressing and/or reducing market-based wages and benefit increases for class members that are typically associated with the active recruitment of employees and workers in a competitive industry.”

The proposed antitrust class action lawsuit is seeking to represent over 1,000 current and former employees, who allegedly worked for the named company and certain franchisees since July 2014. The claim alleges that these employees were underpaid due to the no poach clause — affecting employees at 1,300 New York State Dunkin Donuts’ locations.

No poach clauses have recently come under public scrutiny due to state and federal antitrust officials investigating different fast food restaurants like Dunkin Donuts. Settlements have reportedly been reached between several companies and state attorneys general offices, with the companies promising to eliminate their no poach clause agreements.

Employee poaching is common practice in many industries. The prospect of poaching creates a healthy competitive environment that forces employers to give employees competitive wages and ensure decent job benefits. In addition, employees often discuss different “solicitation offers” that helps other workers feel emboldened to ask for better pay rates and benefits from their companies.

Poaching also forces companies to actively compete in active recruitment, which ultimately keeps wages at a decent level for employees.

The Dunkin Donuts Class Action Lawsuit is Case No. 1:18-cv-09885 in the U.S. District Court for the Southern District of New York.

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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