FRANCHISE: New Jersey Among States Making Agreement With Franchisors Prohibiting “No-Poach” Agreements In Fast-Food.

On March 12, 2019 it was announced that 17 states, including New Jersey, made Agreements with Arby’s, Dukin’, Five Guys, and Little Ceasars to prohibit the use of “No-Poach” provisions in their franchise agreements.  “Non-Poach” provisions restrict a franchisee’s ability to recruit or hire employees from one franchise to another.  As a result, employees (many of whom are low-wage workers) may be unable to obtain better pay and benefits by working for a competing franchisee within the same franchise system.

While this may be appropriate with low-skilled workers, will this trend continue for highly-skilled workers for other franchise systems?  Does this rationale apply to a general manager of an Outback Steakhouse earning a six-figure salary?  Does it make sense to restrict the poaching of senior automotive technicians in an automotive franchise whose skills cannot be easily replaced?

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