Dive Brief:
- McDonald’s and a group of employees agreed to end litigation dating back to 2017 that challenged restrictive hiring agreements between the chain’s franchise operators, according to a Dec. 24 court filing.
- The news affects two cases, Deslandes v. McDonald’s and Turner v. McDonald’s, that were ultimately consolidated. Plaintiffs in both lawsuits alleged that the so-called “no-poach” clauses embedded in franchise agreements violated federal antitrust laws.
- The parties stipulated that the lawsuits had been dismissed with prejudice but provided no additional details. McDonald’s has since ended the no-poach clauses at the center of the litigation, according to a 2024 document filed in response to the company’s appeal of the case to the U.S. Supreme Court.
Dive Insight:
The case against McDonald’s coincided with a broader focus on no-poach agreements among policymakers, particularly in the fast-food industry context.
McDonald’s had scored an early win in Deslandes at the district court level in 2018 when a judge held that the plaintiffs had not shown that the chain’s no-poach agreements were a per se violation of the Sherman Antitrust Act.
However, a divided panel of the 7th U.S. Circuit Court of Appeals vacated the decision and remanded it for further proceedings. McDonald’s unsuccessfully appealed the 7th Circuit’s decision to the Supreme Court.
Not long after the Deslandes plaintiffs filed their initial class-action complaint in the U.S. District Court for the Northern District of Illinois, then-Massachusetts Attorney General Maura Healey announced that a coalition of states reached a settlement with chains including Dunkin’, Arby’s, Five Guys and Little Caesars under which those brands would remove no-poach clauses from franchise agreements.
“No-poach agreements make it harder for fast food workers to gain promotions and earn a better living,” Healey said in a press release at the time of the announcement. “This settlement is a major step toward ending the use of no-poach agreements for good.”
