• A district court erred when it dismissed a suit against a group of Burger King franchisees alleging the restaurants illegally maintained no-poach agreements prohibiting them from hiring each other’s employees, the 11th U.S. Circuit Court of Appeals held Wednesday (Arrington v. Burger King Worldwide, Inc., No. 20-13561 (11th Cir. Aug. 31, 2022)).
• The workers claimed the company’s agreements prevented them from obtaining employment at other franchise restaurants, allegedly resulting in artificially depressed wages, decreased benefits and reduced job mobility. The suit further alleged the agreements were an unreasonable restriction on trade, in violation of the Sherman Antitrust Act.
• The district court found Burger King and each of its franchisees constituted a “single economic enterprise” incapable of conspiring under the Sherman Act. But the 11th Circuit reversed, comparing the network of Burger King franchisees to National Football League teams, which faced a similar suit. “Like the 32 [NFL] teams … Burger King and its separate and independent franchise restaurants compete against each other — in this case, for employees,” the court said.

Dive Insight:

The case touches on an area of employment law that has garnered strong attention from regulators in recent years.

In January 2018, the U.S. Department of Justice created a stir when it announced that it would be issuing indictments over employers’ no-poach agreements and “naked wage-fixing agreements.” That announcement...

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