Pizza Hut Non-Poaching Clause Recently Eliminated from Contracts

Franchisee contracts that previously included the Pizza Hut non-poaching clause will have this eliminated, according to reports. The removal of the Pizza Hut non-poaching clause happened after the tireless effort of Washington State’s Attorney General Bob Ferguson, according to a recent Seattle Times article.

According to the article, Ferguson has been focusing on eliminating the Pizza Hut non-poaching clause and similar clauses in franchisee contracts among fast food enterprises that have restaurants in Washington State.

In so doing, he has affected change across the country, with many companies choosing to settle with his office rather than face lawsuits accusing them of violating the state’s antitrust provisions as outlined in its consumer protection act.

According to the article reporting that the Pizza Hut non-poaching clause would no longer be included in franchisee agreements, seven other fast food chains recently agreed to do similar contract revisions to remove the problematic terms.

These fast food chains include Burger King, Papa John’s, and Denny’s. These most recent agreements have joined 15 other restaurant chains that have removed language similar to the Pizza Hit non-poaching clause, including McDonald’s and Carl’s Jr. that settled with the attorney general’s office in July 2018.

What is the Pizza Hut Non-Poaching Clause?

The Pizza Hut non-poaching clause and similar clauses that appear in franchisee contracts prohibit restaurant owners from luring good employees from among the ranks of other restaurants of the same brand.

This luring could be in the form of higher hourly wages, better schedules, or even basic benefits. The prohibition as enforced prevents workers from wielding any bargaining power and are non-competitive in nature, according to economists.

When chain restaurants don’t have to compete with one another to retain the best and the brightest employees, wages can remain lower and stagnant. This stagnation puts an excessive burden on low income employees who by and large live from paycheck to paycheck already.

In the Seattle Times article, a spokesperson for Dunkin’ Donuts is credited with arguing that eliminating these non-poaching agreements burdens franchisees. This spokesperson says, according to the report, that finding and keeping staff is difficult at best in the current labor market.

The Team Effort Among States

Attorney General Ferguson has worked as part of a larger investigation involving other attorney general state offices to bring the 23 chains to settle. These chains together account for 67,000 restaurants across the country and millions of associated employees.

While Ferguson says he doesn’t intend to stop with the fast food industry and hopes to broaden this work to include other industries including hospitality, according to the report, there is still more effort to be made in this arena.

There are five restaurant chains that have not yet agreed to settle and are currently under investigation, according to the Seattle Times article. Among them are Domino’s Pizza and Baskin Robbins.

Does you or a loved one work in the fast food industry? Do you feel you have been prevented from moving locations because of a no staff poaching agreement? You could qualify to participate in a class action 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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