September 20, 2018
Workers across the country are winning major victories by defeating “no-poach” clauses. While corporations frequently broadcast their love of the free market economy when fighting against minimum wage laws, many of those same corporations undercut the free market by entering into what are called “no-poach” agreements with their competitors. A “no-poach” clause is an agreement between companies that they will not hire each others’ employees. In short, it substantially reduces competition for workers in companies with “no-poach” clauses. Such clauses unfairly limit an employees’ leverage to take their services elsewhere if their employers’ competitor cannot hire them. “No-poach” clauses rig the system so that employers can artificially and unfairly keep wages low for their employees.
According to Massachusetts Attorney General Maura Healey, about 80 percent of fast-food workers are constricted by no-poaching clauses and about 58 of all franchises have “no-poach” clauses.
Last month, the Attorney General for the State of Washington settled a lawsuit against seven chains – including Arby’s, Carl’s Jr. and McDonald’s – requiring those companies to not enforce their “no poach” agreements. Under this settlement, “Companies must compete for workers just like they compete for customer,” said Washington Attorney General Bob Ferguson.
Industries such as rail transportation and information technology have also seen “no-poach” clauses invalidated. In Pennsylvania, three railroad companies have been sued for agreeing among themselves to not steal each others’ employees. Additionally, several companies in Silicon Valley were stopped from enforcing their “no-poach” clauses by the Department of Justice.
If you or your union face a “no-poach” clause or suspect that your employer has somehow limited your ability to work for your competition, you should reach out to legal counsel immediately. This firm is happy to help.