Four fast food chains entered an agreement with 13 states and the District of Columbia Tuesday to stop using restrictive no-poach contracts.
Arby’s, Little Caesar Enterprises, Five Guys and Dunkin’ will no longer restrict workers’ ability to move from one franchise to another within the same chain.
Today’s agreements stem from a multistate investigation into no-poach agreements that began in July 2018. A survey from July 2017 found 80 percent of fast food chains use such agreements, which limit low-wage workers’ ability to secure better paying jobs.
New Jersey was part of the coalition.
“Convincing four major fast food companies to stop restricting their employees’ job options matters, not just for these workers, but for New Jersey’s economy,” said Attorney General Grewal in a statement. “I am glad that Arby’s, Little Caesar, Five Guys and Dunkin’ now recognize the unfairness of no-poach agreements and will stop using them, and I am proud of the multistate investigation that led to their change of heart. We urge other fast food companies to follow their example.”
The four franchisors have agreed to stop including no-poach provisions in their franchise agreements and to stop enforcing such provisions currently in place. They have also agreed to remove no-poach provisions from existing agreements and ask franchisees to inform employees of the settlement.
The franchisors will also notify the participating attorneys general if a franchisee tries to restrict employee mobility under an existing no-poach agreement.
“No-poach agreements commonly used in the fast food industry unfairly bind workers to one employer by blocking them from seeking better-paying, more attractive jobs with competitors,” said New Jersey Labor Commissioner Robert Asaro-Angelo in a statement. “Today’s agreement is a victory for workers’ rights and a big step toward ending this exploitive practice.”
Along with New Jersey, other attorneys general participating in the suit were in Massachusetts, California, the District of Columbia, Iowa, Illinois, Maryland, Minnesota, North Carolina, New York, Oregon, Pennsylvania, Rhode Island and Vermont.