Seven fast food chains have agreed to drop “no-poaching” clauses that bar employees from switching between company franchises, agreeing to end a practice critics say drags down wages for millions of workers amid scrutiny from state authorities and federal lawmakers.
On Thursday, Washington Attorney General Bob Ferguson (D) said that the seven chains – including Arby’s, Carl’s Jr., and McDonald’s – had agreed to no longer enforce the “no poaching” agreements at all of their locations, which include more than 25,000 stores nationwide. The hiring practice bars managers from hiring workers at another store in the same chain.
“Companies must compete for workers just like they compete for customers,” Ferguson said in a news release. “They cannot manipulate the market to keep wages low. My goal is to unrig a system that suppresses wages in the fast food industry.”
The announcement comes the same week 11 states launched a joint investigation into “no-poaching” clauses at eight national fast food chains. Cory Booker (D-N.J.) and Elizabeth Warren (D-Mass.) are also sending letters about the practice to about 90 CEOs, asking them to disclose their “no-poaching” clauses, and have introduced legislation in Congress to make the practice illegal.
“We urge you to remove from your franchise agreements any language that imposes limits on worker mobility,” Booker and Warren write in the letters.