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Before committing to a franchise business, consider...
While the original guidelines focused primarily on per se illegal wage-fixing and no-poach agreements, the 2025 Guidelines illustrate a significant expansion in enforcement, broadening scrutiny to compensation benchmarking,...more
The Department of Justice Antitrust Division (DOJ) and the Federal Trade Commission (FTC) (together, the Agencies) issued Antitrust Guidelines for Business Activities Affecting Workers (2025 Guidelines) in January. The 2025...more
In the final days of the Biden administration, the FTC and DOJ jointly issued antitrust guidelines on business practices that impact workers that replace the 2016 Antitrust Guidance for Human Resource Professionals, which...more
Refusing to rubber-stamp a proposed $5 million anti-poaching class action settlement, a federal court in Kentucky has directed the plaintiff to provide additional information to allow proper consideration of the factors...more
The Seventh Circuit recently revived an antitrust challenge to a clause in McDonald’s franchise agreements barring franchises from poaching other franchises’ employees. (See our previous coverage of antitrust challenges to...more
In Deslandes v. McDonald’s USA LLC, issued August 25, 2023, the U.S. Court of Appeals for the Seventh Circuit overturned the dismissal of antitrust claims that challenged no-poach clauses in franchise agreements....more
Arrington v. Burger King Worldwide, Inc., No. 20-13561 (11th Cir. Aug. 31, 2022) – In October 2018, a former line cook of a Burger King franchise restaurant in Illinois, filed a class action complaint in the District Court...more
Eleventh Circuit’s Burger King opinion raises antitrust risks in franchising- Sherman Act challenges to “no-poach” clauses in franchise agreements have been languishing in federal courts for a few years now, but with...more
A federal judge in the U.S. District Court for the Northern District of Illinois has held that an antitrust challenge to a “hiring restriction [that] prevented” plaintiff employees “from taking a better-paying position with a...more
Are franchisees dependent offshoots of their franchisors, or are they standalone businesses capable of independent decision-making?...more
Welcome to The Franchise Memorandum by Lathrop GPM, formerly known as The GPMemorandum. Since December 1997, The GPMemorandum has been presenting summaries of recent legal developments of interest to franchisors and companies...more
Franchise systems, and many licensing arrangements contain anti-poaching provisions. These provisions are being tested under the antitrust laws as being anticompetitive. This article will discuss the benefits and burdens of...more
In a recent post, I expressed the view that no-poach clauses in franchise agreements are unlikely to violate the antitrust laws. Recent activity, however, has given me a “maybe yes, maybe no” on my prediction....more
A group of 18 state attorneys general (the “AGs”) recently filed comments with the Federal Trade Commission (“FTC”) in advance of a series of hearings centered on changes to antitrust and consumer protection enforcement in...more
The recent antitrust attacks on no-poach clauses encourage insomnia among franchise lawyers. But is the attack serious or just a flash in the pan, soon to be extinguished? The insomnia began in the tech industry, where...more
In early February 2019, the Department of Justice (DOJ) announced its intent to file statements of interest in multiple ongoing private lawsuits to clarify how “no-poach” agreements should be evaluated under the federal...more
As previously reported in EmployNews, in recent years state attorneys general and private plaintiffs have initiated legal actions against companies that require their franchisees to sign employee “no-poaching” agreements....more
Several years ago, state attorneys general began investigating claims of antitrust violations based on franchise agreements that required franchisees not to hire employees of another franchisee. Despite the regular use of...more
In the midst of a federal effort to ramp up antitrust prosecutions of companies agreeing not to recruit or hire each other’s employees special scrutiny – and criticism – has been directed toward the use of no-poach agreements...more
For centuries employers have maintained a strong interest in trying to protect their most valuable asset, their key employees, from solicitation by and loss to other employers, especially competitors. As a result, “no...more
In order to avoid a lawsuit by the Washington State Attorney General, seven fast-food chains with store locations nationwide agreed to no longer enforce “no-poach/no-hire” provisions in their franchise agreements and to...more
The Attorneys General of ten states are investigating fast food franchisors for their alleged use of “no poach” provisions in their franchise agreements, according to a press release by the New Jersey Attorney General’s...more
Franchise agreements often contain provisions prohibiting the franchisee from soliciting or hiring workers employed by the franchisor or other franchisees. Such “anti-poaching” agreements have recently come under increased...more
Agreements among companies to not hire each other’s workers are more risky than ever. The DOJ’s Assistant Attorney General for the Antitrust Division, Makan Delrahim, stated on January 19 that the division has criminal cases...more