About two years after launching an initiative to eliminate “no-poach” agreements that franchise operators have used to restrict worker wages and mobility in Washington state, Attorney General Bob Ferguson said his office has succeeded in that effort.
In a report released Tuesday, Ferguson said millions of workers at 237 corporate franchise chains across the country are now protected from no-poach clauses.
“Every corporate franchise that has a significant presence in Washington and has used no-poach clauses entered into a legally binding agreement with my office to eliminate the practice across all 50 states,” he said.
Franchise owners have long used no-poach clauses to prevent workers from seeking employment at different stores within the same corporate chain. For example, a worker who signed a no-poach agreement at one Jimmy John’s would be barred from accepting employment at another Jimmy John’s franchise for higher pay.
The clauses have helped franchises keep wages down and limit job opportunities among workers, according to economists cited in the report.
To date, more than 4,700 franchise locations in Washington have signed legally binding agreements with Ferguson’s office to end the practice.
“These clauses rigged the system against workers,” Ferguson said.
The no-poach initiative was inspired by a September 2017 New York Times report, “Why Aren’t Paychecks Growing? A Burger-Joint Clause Offers a Clue,” which highlighted the downward pressure that the agreements exerted on wages at fast-food franchises.
In addition to Ferguson’s prohibition of no-poach clauses, Washington legislators recently passed a bill known as the “Non-Compete Act” to protect lower-wage workers from companies trying to limit their job options through unfair non-compete agreements.
If you are experiencing workplace restrictions related to a no-poach clause or non-compete agreement in Washington state, or need advice about L&I, workers’ comp or other employment law claims, call Emery Reddy. You won’t get better advice.