Pizza Hut Non Solicitation Clause Allegedly Violates Antitrust Laws

Fast food restaurant employees have taken their employers to court over a Pizza Hut non solicitation clause that they say violates antitrust laws.

Within the past year, fast food employees have spoken out against company policies which may violate antitrust laws, including a Pizza Hut non solicitation clause which allegedly prevents Pizza Hut franchises from hiring management from other locations. This alleged Pizza Hut policy led one employee to file a class action against the company.

In November 2017, plaintiff Kristen I. filed a class action lawsuit against Pizza Hut, claiming that a company policy prevents franchises from hiring certain employees from the company’s other locations. The Pizza Hut non solicitation clause allegedly applies to management employees who worked at a franchise location within the past six months.

Kristen says she was hired by a Pizza Hut franchise in 2011 and was allegedly promised a starting rate of $9 an hour. However, she was allegedly paid $7.25 an hour, which was later increased to $8.05. Kristen claims that she was unable to seek better wages from another location due to a Pizza Hut non solicitation clause.

“While independent business owners should be encouraged to compete with each other for employees, Pizza Hut and its franchisees enter into express contractual franchise agreements, forbidding employee competition at a management level,” Kristen claims in her class action lawsuit.

Kristen claims that the Pizza Hut non solicitation clause is harmful to management employees of Pizza Hut because it forces them to work for low wages. Since locations cannot compete with each other for management employees, the franchises can allegedly pay their workers less with fewer concerns that a more competitive offer may appear.

She argues that the Pizza Hut non solicitation clause also causes problems for management employees since skills learned with the company are not easily transferable to other management positions. The proprietary systems and procedures meant that Kristen’s skills were allegedly useless at other companies, she claims, trapping her in a position with low wages. If she had been able to transfer between Pizza Hut stores, she would have allegedly been in a position to negotiate higher wages and benefits.

The class action argues that the Pizza Hut non solicitation clause encourages low wages across the company, allowing the corporation to rake in profits at the expense of their employees.

“Low wages […] are consistent across the Pizza Hut empire of company and franchise-owned restaurants, and have allowed Pizza Hut’s shareholders and executives, and thousands of its franchise owners, to become very wealthy while full-time, hardworking employees have to seek government benefits just to put food on their own tables,” Kristen argues.

Kristen claims that the Pizza Hut non solicitation clause violates the Sherman Antitrust Act and Texas employment laws. Antitrust laws such as the Sherman Antitrust Act are in place to protect employees from situations where noncompete clauses create a negative employment environment. Fast food policies such as the Pizza Hut non solicitation clause may be in violation of these laws, and affected employees may be eligible for an antitrust lawsuit.

The Pizza Hut Class Action Lawsuit is Case No. 4:17­-cv-­00788 in the United States District Court for the Eastern District of Texas.

Join a Free Fast Food Employee Poaching Class Action Lawsuit Investigation

If you work for Arby’s, Burger King, Jimmy John’s, Papa John’s, Pizza Hut or Domino’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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