Posted: Aug 22, 2018
Eight more restaurant chains have agreed to end a policy that blocks workers from switching jobs within the individual brands, becoming the latest companies to curtail a once-prevalent hiring practice that critics say depressed wages for some of America’s lowest-paid employees.
As part of agreements with the Washington State attorney general’s office on Monday, Applebee’s, Church’s Chicken, Five Guys, IHOP, Jamba Juice, Little Caesars, Panera Bread and Sonic all agreed to remove a so-called no-poach clause from their contracts with franchisees.
The clauses prohibit a cashier at one Panera location, for example, from working at another Panera location.
Such restrictions are not unique to the restaurant industry, but until recently they were ubiquitous, particularly among fast-food chains. That began to change last year, after two prominent economists at Princeton produced a report that focused on how no-poach clauses could lock workers into low-wage jobs.
Bob Ferguson, the Washington State attorney general, began investigating the clauses after reading an article in The New York Times that examined their impact on the mobility of restaurant workers, one of the largest workforces in the country.
That investigation, which began in January, led to agreements with seven fast-food companies, including Arby’s, Carl’s Jr. and McDonald’s, to remove no-poach restrictions. Those agreements, and the ones announced on Monday, will affect the companies’ operations nationwide, according to the attorney general’s office.
The office is continuing to look into the practices of other fast-food chains, Mr. Ferguson said in an interview. He declined to name the companies.
“The train’s left the station,” he said. “These corporations either get on board, or they’re going to end up in court. But there is no middle ground.”
On Monday, a spokesman for Dine Brands Global, the parent company of Applebee’s and IHOP, confirmed that earlier this year, both chains “decided that it was the right time to remove the provisions regarding employee poaching from each brand’s franchise agreements.”
By Rachel Abrams
August 20, 2018
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