Pa., N.J. among states examining hiring policies for fast-food chains
Contract clauses known as "no-poaching agreements" are preventing employees from transferring to different franchises within the same company. Now, Pennsylvania and New Jersey state attorneys general are joining an investigation into the agreements.
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Pennsylvania's and New Jersey's attorneys general have joined nine others in investigating a practice of preventing employees from switching between franchises within fast-food chains.
The policies, known as "no-poaching" agreements, may contribute to low wages for fast-food workers by preventing them from looking for better offers, economists say.
The group will request information from eight chains — Burger King, Wendy's, Five Guys, Arby's, Little Caesars, Panera, Dunkin' Donuts, and Popeye's Louisiana Kitchen — about no-poaching agreements in the companies' contracts.
A letter the attorneys general sent to the fast-food chains Monday said they found that 80 percent of fast-food companies use no-poaching agreements in their contracts.
Pennsylvania Attorney General Josh Shapiro said in a news release that the use of these agreements "unfairly exploits working women and men, especially low-wage workers."
"Many employees only learn these agreements exist when they are denied the chance to advance to a better job, earn more money, or obtain family-friendly schedule options," he said. "It's wrong, and I'm standing up and fighting for the rights of Pennsylvanians not to be exploited."
The investigation comes after New Jersey Sen. Cory Booker and Massachusetts Sen. Elizabeth Warren, both Democrats, in March put forward legislation that would outlaw the agreements. That legislation also targeted companies like Jiffy Lube and H&R Block, and has not made progress in Congress.
"This is patently unfair and against the ideals of a so-called free market," Booker said in a March interview with the Washington Post. "It's antidemocratic, and it's hurting people."
Along with Shapiro and New Jersey state Attorney General Gurbir Grewal, the team is made up of the attorneys general from New York, the District of Columbia, Rhode Island, Maryland, Illinois, California, Minnesota, and Oregon, and the attorney general from Massachusetts — Maura Healey — leading the investigation.