Corporate fast-food chains continue to end no-poach provisions in US

18th September 2018 (Last Updated September 18th, 2018 14:30)

Washington Attorney General (AG) Bob Ferguson has revealed that eight more major restaurant chains have agreed to stop no-poach provisions.

Corporate fast-food chains continue to end no-poach provisions in US
Pizza Hut amongst restaurants putting an end to no-poach provisions. Credit: Pizza Hut.

Washington Attorney General (AG) Bob Ferguson has revealed that eight more major restaurant chains have agreed to stop no-poach provisions.

These provisions restrict worker mobility and prevent workers from moving among these companies’ franchise locations.

A&W, Burger King, Denny’s, Papa John’s, Pizza Hut, Popeyes, Tim Hortons and Wingstop will join the 15 other restaurants involved and eliminate no-poach provisions from their franchise contracts across the country.

The 23 firms account for more than 67,000 locations across the US and employ millions of workers.

This workers’ protection initiative will positively affect hundreds of thousands of workers nationwide.

“No-poach provisions create a rigged system where businesses no longer have to compete for workers, putting downward pressure on wages nationwide.”

With this latest announcement, Ferguson is almost set to achieve his goal of eliminating no-poach clauses in the fast-food industry.

The AG continues to probe some other corporate chains, including Baskin Robbins, Domino’s, Quiznos, Firehouse Subs and Jersey Mike’s.

Ferguson said: “My goal is to eliminate no-poach clauses nationwide to benefit workers. No-poach provisions create a rigged system where businesses no longer have to compete for workers, putting downward pressure on wages nationwide. That’s wrong and illegal.”

Earlier this year, Ferguson’s Antitrust Division initiated an investigation into these no-poach clauses in fast-food chains after a study by Princeton economists Alan Krueger and Orley Ashenfelter highlighted the issues with the practice.

Professors Krueger and Ashenfelter scrutinised franchise agreements from 2016 for 156 of the largest franchise companies in the US.

The economists found that no-poach provisions decrease opportunities for low-wage workers and stagnate wages.

Beginning in January, the Attorney General’s Antitrust Division probed 31 firms out of which three chains ― Hissho Sushi, Long John Silver’s and Wendy’s ― did not use no-poach provisions in their franchise contracts.

Besides the eight companies announced recently, Ferguson reached an end to no-poach provisions with seven fast-food chains in July and eight more in August this year.