4 fast food chains strike deal with NJ, Pa. to end no-poach contracts

Bacon Cheeseburger from 5 Guys
Photo credit Tim Dunn/RGJ
TRENTON, N.J. (KYW Newsradio) — An agreement between several states and four fast food chains deals a blow to franchise owners trying to stop their employees from jumping from one business to another.

New Jersey and Pennsylvania joined 11 other states and the District of Columbia in striking deals with Arby's, Little Caesars, Five Guys and Dunkin' to bring an end to no-poach contracts.

"These contracts are typically signed by employees upon their hire," said spokesman Lee Moore with the New Jersey Attorney General’s Office, "and the attorneys general of the various states participating have taken the position that, in many cases, these workers are not even aware that they are signing agreements that restrict their ability to move."

Moore also noted that the practice itself has been rather prevalent within the fast food industry.

"A July 2017 study had found that 80 percent of fast food restaurants used no-poach provisions to bind their employees," he added. "No-poach contracts are harmful because they can limit a worker's career mobility and restrict the worker's earning potential."

Four other major chains were contacted as part on an ongoing probe pertaining to the problem. 

Wendy's announced it was ending the practice. Investigations continue into operations within Burger King, Panera Bread and Popeyes.