Minnesota Launches Investigation Into Fast Food Hiring

TWIN CITIES, MN — Minnesota Attorney General Lori Swanson, along with 10 other attorneys general, sent a letter Monday to eight national fast food franchisors about so-called "no-poach" or "no-hire" agreements in franchise contracts that restrict a franchisee’s ability to recruit or hire employees of another franchisee of the same chain.

Prompted by concerns that these agreements hurt low-wage workers and limit their ability to get better jobs, the attorneys general have launched an investigation into the practice.

"No-poach agreements trap workers in low-wage jobs and limit their ability to seek promotion into higher-paying positions within the same chain of restaurants," Illinois Attorney General Lisa Madigan said in a statement.

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"I am investigating this practice because it unfairly stops low-income workers from advancing and depresses their wages."

The attorneys general said in their letter that no-poach provisions make it difficult for workers to improve their wages by moving from one job to another or seeking a higher-paying job at another franchise location and that many workers are unaware they are subject to no-poach provisions.

According to the letter, 58 percent of major franchisors have no-poach provisions in their franchise agreements, and the number is even higher, at 80 percent, for fast food franchisors. Advocates say these provisions have led to persistent low-wage growth and are anticompetitive in nature.

The letter was sent to Arby’s, Burger King, Dunkin’ Donuts, Five Guys Burgers and Fries, Little Caesars, Panera Bread, Popeyes Louisiana Kitchen and Wendy’s, and asks these restaurants to provide documents, including copies of franchise agreements and communications related to no-poach provisions, by Aug. 6, according to a news release.

Joining Swanson is sending Monday's letter were the attorneys general of California, District of Columbia, Illinois, Massachusetts, Maryland, New Jersey, New York, Oregon, Pennsylvania and Rhode Island.

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