Burger King Must Face Antitrust Lawsuit Filed by Workers Over ‘No-Poach’ Agreements Between Franchisees

Burger King’s attempts to dismiss a lawsuit filed by current and former workers of the fast-food chain have hit a significant roadblock, according to Reuters.

Initially filed in 2018, the suit in question — Jarvis Arrington et al v. Burger King Worldwide et al, filed in the Southern District of Florida — alleges that Burger King and related corporate entities had run afoul of U.S. antitrust law by enacting “no-hire” or “no-poach” agreements at thousands of franchise locations nationwide.

U.S. District Judge Jose Martinez in Miami stated that the plaintiffs had provided enough evidence to move forward with the case, which now proceeds to the discovery and litigation phase, per PYMNTS. Martinez further ruled that the Burger King “no-hire” rule was an “unreasonable” restraint on the labor market.

Burger King Workers Seek Damages, Class-Action Status

The Burger King workers in question, who have worked at Illinois locations as well as in other states since at least 2010, seek unspecified damages as well as class-action status in order to represent thousands of other affected workers.

The basis of the lawsuit argues that the “no-hire” or “no-poach” rule restricts wage growth and job mobility, since these agreements typically prevented an employee from working for another franchisee location within a six-month timespan.

“In a properly functioning and lawfully competitive labor market, Burger King and its franchisees would compete for labor,” the lawsuit argued.

For its part, Burger King has reiterated its position throughout the lawsuit — that position being, per Verdict Food Service — that the plaintiffs have not demonstrated a tangible connection between the policies in question and any form of wage suppression.

This is the second time in recent memory that a fast-food giant had faced similar legal allegations, as Reuters contributor Mike Scarcella noted.

“Last year, the U.S. Supreme Court turned down a bid by McDonald’s to shut down a similar proposed class action claiming it violated antitrust laws by prohibiting franchisees from poaching employees from other McDonald’s restaurants,” Scarcella wrote.