8 more restaurant chains will end ‘no-poach’ policies

Eight more restaurant chains have agreed to end a policy that blocks workers from switching jobs within the individual brands, becoming the latest companies to curtail a once-prevalent hiring practice that critics say depressed wages for some of the United States’ lowest-paid employees.

As part of agreements with the Washington state attorney general’s office Monday, Applebee’s, Church’s Chicken, Five Guys, IHOP, Jamba Juice, Little Caesars, Panera Bread and Sonic all agreed to remove a no-poach clause from their contracts with franchisees.

The clauses prohibit a cashier at one Panera location, for example, from working at another Panera location.

Such restrictions are not unique to the restaurant industry, but until recently they were ubiquitous, particularly among fastfood chains. That began to change last year, after two prominent economists at Princeton produced a report that focused on how no-poach clauses could lock workers into low-wage jobs.

Bob Ferguson, the Washington state attorney general, began investigating the clauses after reading an article in The New York Times that examined their impact on the mobility of restaurant workers, one of the largest workforces in the country.

That investigation, which began in January, led to agreements with seven fast-food companies, including Arby’s, Carl’s Jr. and McDonald’s, to remove no-poach restrictions. Those agreements, and the ones announced Monday, will affect the companies’ operations nationwide, according to the attorney general’s office.

The office is continuing to look into the practices of other fastfood chains, Ferguson said. He declined to name the companies.

“The train’s left the station,” he said. “These corporations either get on board, or they’re going to end up in court. But there is no middle ground.”

Separately, attorneys general in 10 states have also begun their own investigation into no-poach agreements.