7 Fast-food chains agree to end ‘no-poaching’ policies

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SEATTLE  — Seven national fast-food chains have agreed to end policies that blocked workers from changing branches — limiting wages and job opportunities — under the threat of legal action from the state of Washington.

Washington Attorney General Bob Ferguson announced binding agreements with companies including Arby’s, Jimmy John’s and Cinnabon, Thursday. McDonald’s also signed on, but previously announced plans to end the practice.

The so-called no-poach policies prevent franchises from hiring workers away from other franchises of the same chain. That’s been considered convenient for franchise owners, but has blocked experienced workers at one franchise from getting better-paying jobs at others, potentially keeping tens of thousands of employees around the country stuck in low-wage positions.

Without access to better job opportunities at other franchises, workers have less leverage to seek raises in their current positions, Ferguson said.

“Our state antitrust laws are very clear: Businesses must compete for workers the same way as they compete for customers,” Ferguson said. “You can’t rig the system to avoid competition.”

In separate agreements filed Thursday in King County Superior Court in Seattle, the companies denied that their policies are illegal, but said they wanted to avoid expensive litigation. McDonald’s said it was pleased to work with Ferguson’s office.

“We believe everyone at McDonald’s has an opportunity to grow and progress throughout their career,” the company said in an emailed statement.

Ferguson credited the businesses for quickly agreeing to end the practice nationwide in response to his legal threats and said fast-food chains that don’t follow suit will be sued. The seven chains have more than 500 locations in Washington.

On Monday, a coalition of 11 Democratic state attorneys general, led by Maura Healy of Massachusetts, announced a separate investigation into the no-poach agreements at several chains, including Arby’s, Burger King, Dunkin’ Donuts, Five Guys Burgers and Fries, Little Caesars, Panera Bread, Popeyes Louisiana Kitchen and Wendy’s.

Ferguson said his office began investigating early this year, prompted by a New York Times article detailing how such policies had stifled wages for fast-food workers.

The following companies agreed to end the practice:

  • Arby’s (57 Washington locations, estimated 3,283 locations nationwide),
  • Auntie Anne’s (28 Washington locations, estimated 1,229 locations nationwide),
  • Buffalo Wild Wings (16 Washington locations, estimated 1,214 locations nationwide),
  • Carl’s Jr. (33 Washington locations, estimated 1,168 locations nationwide),
  • Cinnabon (25 Washington locations, estimated 836 locations nationwide),
  • Jimmy John’s (127 Washington locations, estimated 2,774 locations nationwide), and
  • McDonald’s (271 Washington locations, estimated 16,193 locations nationwide).

If any of the seven fast-food chains violate any of the terms, the company will be subject to civil penalties.

Ferguson is investigating other corporate chains that utilize no-poach agreements and expects that more fast-food corporations will agree to remove any current and future no-poach provisions from their contracts.

If other companies do not remove their no-poach provisions, Ferguson is prepared to file lawsuits.

The Associated Press contributed to this report.