The Biden administration has urged a US appeals court to revive claims that McDonald’s Corp violated federal antitrust law by requiring franchisees to agree not to hire away employees from corporate-owned stores – a move that fits into the administration’s declared aim of reining in Big Business’ abuses.
The US Department of Justice and Federal Trade Commission in a joint brief on Thursday told the 7th USCircuit Court of Appeals that McDonald’s “no-poach” agreements were unlawful on their face, and a federal judge should have required the company to show that they were a necessary feature of franchise agreements before dismissing a pair of consolidated lawsuits.
Read more: McDonald’s Defeats No-Poach Antitrust Suit
Two former McDonald’s workers are appealing a June ruling by US District Judge Jorge Alonso in Chicago that dismissed their proposed class actions, which claim the agreements stifled competition and depressed wages for them and other employees like them. The pacts barred franchisees from hiring people who worked at corporate stores for six months after they left their jobs.
The DOJ and FTC in their brief said that by limiting the pool of workers that McDonald’s and its franchisees could hire, the no-poach agreements deprived workers of opportunities to improve their working conditions. No-poach agreements have also been criticized as helping preserve market dominance among highly-competitive companies with high personnell turnover, making them a target for DOJ reformists.
