Washington State has announced reaching agreements with seven major restaurant chains to end a hiring practice that has limited employee mobility for years. The companies have agreed to end the use of so-called no-poach clauses in their contracts with franchisees nationwide. The companies signing on to the agreements were McDonald’s, Arby’s, Carl’s Jr., Jimmy John’s, Auntie Anne’s, Buffalo Wild Wings, and Cinnabon.
Attorney General Bob Ferguson said the companies reached the binding nationwide agreements to avoid a lawsuit. The state began its investigation after The New York Times published an article detailing how the clauses kept tens of thousands of fast-food workers locked in low-wage jobs. To date, 11 other attorneys general have also announced inquiries into no-poaching provisions, requesting information from eight national fast-food companies to determine whether their no-poach clauses broke any laws.
No-poach clauses prohibit workers at one franchise from going to another franchise within the same chain. They do not stop those workers from taking jobs at restaurants run by a different chain. Franchise owners say the clauses help protect their investments of time and money in training employees. Critics say the clauses hold down pay for restaurant employees.
Many workers are not aware that they will be affected by the no-poach provisions because they are contained in contracts between companies and their individual franchise locations. At no point in the pre-employment process are the workers told that they will not be eligible for hiring by another franchise in the same chain if they choose to leave in the future. In many cases, the workers don’t find out about the restrictions until they try to land new jobs.
With the new agreement in place, workers at the named chains will now be able to take their skills to a different franchise that may be offering more pay or better hours. In addition to stripping the clauses from existing franchise contracts, the clauses cannot be included in new and renewed contracts either. The move is a win for fast-food workers nationwide.