Fast Food Chains Promise to End “No Poach” Employment Policies

October 5, 2018

Finding and keeping qualified employees is a constant struggle for companies across the nation. That’s why some businesses require staffers to sign non-compete clauses, which basically prevent them from jumping ship to a competitor. In the fast food industry, though, there’s another type of employment restriction that has long kept workers tied to a single location within a franchise. Called “no poach” policies, these strict guidelines prohibit staffers from switching jobs within a national chain.

For instance, say that a McDonald’s employee has worked at a particular location for years and is now ready to become a manager. With no positions available at their store, this person could then try to apply at a different McDonald’s location. Unfortunately, that’s when they would learn that the company doesn’t allow employees to join another franchisee’s store. Although businesses must make staffers aware of non-compete clauses, no poach policies can be inserted into complicated employment contracts without the worker’s knowledge. Fast food franchisees have defended the practice by saying it protects the investments they’ve made in their employees’ hiring and training.

On the other hand, employment advocates have long criticized no poach policies for limiting job opportunities for some of the country’s poorest workers. In fact, an investigation conducted earlier this year by the Washington State attorney general found that these practices can keep employees locked in to low-paying jobs. The study also included threats of legal action against fast food companies that continue to insert no poach policies into staffing contracts. As a result, seven large chains including McDonald’s, Arby’s and Carl’s Jr. agreed to end their no poach policies. In the months since then, more big names like Panera, IHOP and Five Guys have developed similar agreements. Still, there are a number of other chains that haven’t put an end to their no poach practices, although that could soon change. “The train’s left the station,” said Washington Attorney General Bob Ferguson. “These corporations either get on board, or they’re going to end up in court. But there is no middle ground.”

Questions:

  1. How do no poach policies limit the opportunities of fast food workers?
  2. Why did fast food companies develop no poach policies?

Source: Rachel Abrams, “8 Fast-Food Chains Will End ‘No-Poach’ Policies,” The New York Times, August 20, 2018. Photo by Danny Choo.

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