7 chains agree to cut ‘no poach’ franchise rules smirart/iStock/Getty Images Plus

7 chains agree to cut ‘no poach’ franchise rules

Washington State says brands to remove restrictions nationally

Seven restaurant companies have agreed to end “no poach” restrictions immediately in their franchise agreements, provisions that law enforcement officials allege threaten the lower-wage workers’ ability to get higher wages and move to better positions.

Bob Ferguson, attorney general for Washington State, said Thursday that Arby’s, Auntie Anne’s,

Buffalo Wild Wings, Carl’s Jr., Cinnabon, Jimmy John’s and McDonald’s had agreed to remove the provisions, also called “no switching” clauses.

Earlier this week, attorneys general from 10 states and the District of Columbia announced they were investigating no-poach provisions in franchise contracts at Arby’s, Burger King, Dunkin’ Donuts, Five Guys, Little Caesars, Panera Bread, Popeyes, Wendy’s and Dunkin’ Donuts.

State attorneys general involved in that included those from California, Illinois, Massachusetts, Maryland, Minnesota, New Jersey, New York, Oregon, Pennsylvania and Rhode Island.

“No-poach agreements unfairly limit the freedom of fast-food and other low-wage workers to seek promotions and earn a better living,” said Maura Healey, Massachusetts attorney general, in a statement.

Washington State’s announcement Thursday said that the chains agreed to immediately end the nationwide practice that restricts worker mobility and decreases competition for labor by preventing workers from moving among the chains’ franchise locations.

“The companies will no longer enforce provisions included in franchise agreements that stop workers from moving to potentially better positions and wages, and they will remove the language from current and future contracts,” the Washington State official said in a statement.

“Companies must compete for workers just like they compete for customers,” Ferguson said. “They cannot manipulate the market to keep wages low. My goal is to unrig a system that suppresses wages in the fast-food industry."

The seven chains in the Washington State investigation agreed to stop the practice not only at their more than 500 Washington locations, but nationally, Ferguson added.

Khim Aday, a spokesperson for McDonald’s Corp, said in a statement Thursday that “in early 2017, McDonald’s removed and now no longer includes a provision in our franchise agreements that related to a franchisee’s ability to solicit or hire workers from another McDonald’s restaurant.”

Because McDonald’s had already voluntarily removed that provision from new franchise agreements, Aday said the Chicago-based burger chain was cooperating with the Washington attorney general’s office to ensure that the provision is eliminated in his state. 

“To that end,” Aday said, “McDonald’s and the Washington State attorney general have entered into an ‘Assurance of Discontinuance,’ whereby McDonald’s has committed not to include the provision in new franchise agreements and to work with franchise owners in Washington to remove the provision from existing franchise agreements.”

If any of the seven restaurant brands violate any of the terms the Washington State agreement, they would be subject to civil penalties.

Contact Ron Ruggless at [email protected] 

Follow him on Twitter: @RonRuggless

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