Seven fast-food chains agreed Thursday to grant their employees greater mobility by removing language from contracts that prevented them from taking jobs at other franchise locations with higher wages. The announcement came in lieu of the companies facing a lawsuit from Washington State Attorney General Bob Ferguson, who encouraged McDonald’s, Cinnabon, Jimmy John’s, Carl’s Jr., Arby’s, Auntie Anne’s, and Buffalo Wild Wings, to remove the no poaching clauses—which can lead to stagnant wages—in the franchises’ agreements. Employers at one of the state’s over 50 Arby’s locations, for instance, will now have the freedom to hire a worker from another restaurant of the same chain.
“Companies must compete for workers just like they compete for customers,” Ferguson said in a statement. “They cannot manipulate the market to keep wages low.”
The legally binding agreements to cease no-poach language were filed in King County Superior Court, ensuring that the companies will exclude such clauses in current and future contracts at the businesses’ over 500 Washington locations. More significantly, the cited restaurants will abandon the practice nationwide. As part of the assurances of discontinuance, Auntie Anne’s, Jimmy John’s, Buffalo Wild Wings, Arby’s, Cinnabon, and Carl’s Jr locations in Washington state will need to remove the no-poach provisions from existing franchise agreements within 120 days, while McDonald’s must amend the language within 60 days. The franchises in other states will amend contracts at the time of renewal, and must inform the franchise owners of the new policy.
At a Thursday press conference, Merlee Sherman—a member of the labor advocacy group Working Washington, and a Jimmy John’s courier—said that the no poaching clause has impeded her ability to seek higher wages. “There has not been mobility for me to receive better pay at another Jimmy John’s based on my experience. There have not been options for me to go to another store and receive a better wage. All of those have been limited within the company itself,” Sherman said. “Today’s settlement is a giant step for those of us who want to use our skills. Food education in general is my niche, it’s my passion, it’s my career. I want to share my skills with those coming into the food industry and I can’t do that if I can’t put food on the table.”
A 2017 New York Times article exposed the no-poach agreements, which was followed by a local investigation spearheaded by Ferguson’s Antitrust Division earlier this year. According to the New York Times article, employees are unaware of the provisions because they are often included in agreements between franchise owners and corporate headquarters.
Ferguson’s team is investigating other corporate chains, and plans to take legal action against other franchises that don’t remove the provisions prohibiting employees from switching jobs to other locations. “My goal is to unrig a system that suppresses wages in the fast food industry,” Ferguson said in a statement.