Washington state accuses Jersey Mike's of 'no-poach' clause in franchise contracts

By Marian Johns | Oct 23, 2018

SEATTLE — Washington state has filed a lawsuit against Jersey Mike's restaurant chain for the company's alleged refusal to remove a "no-poach" clause from its franchise contracts that prohibits employees from moving among restaurants in the same corporate chain.

According to the Washington State Attorney General's Office, Jersey Mike's would not join seven other corporations in signing legal documents that eliminate their no-poach clauses nationwide. The chains that agreed to remove the clause, which economists say stagnates wages, include Anytime Fitness, Baskin Robbins, Circle K, Domino's, Firehouse Subs, Planet Fitness and Valvoline, the Attorney General's Office said. 

“No-poach clauses are an example of a rigged system that illegally harms workers,” Washington State Attorney General  Bob Ferguson said in a statement.  “My goal is straightforward — eliminate them nationwide. Like Jersey Mike’s, corporations that refuse to eliminate no-poach clauses can expect a lawsuit from my office.”

Jersey Mike's says the company has stopped enforcement of its no-poach clause in franchise contracts, but it refused to remove the clause from existing contracts, according to Ferguson's office. 

"Whether or not a company enforces these provisions, their existence in current contracts remains unlawful, the Attorney General's Office stated. 

The Attorney General's Antitrust Division has eliminated the no-poach clause at 30 companies nationwide, according to Ferguson's office. 

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