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Ex Burger King workers get another bite at 'no-hire' conspiracy lawsuit

Economy Sep 04, 2022 02:10AM ET
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© Reuters. FILE PHOTO: The sign on a Burger King restaurant is shown in Miami, Florida October 28, 2013. REUTERS/Joe Skipper/File Photo
 
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By Barbara Grzincic

(Reuters) - A federal appeals court has revived a potential class action against Burger King over its prior use of a “no-hire” clause that blocked all franchisees from hiring each other’s employees.

The 11th U.S. Circuit Court of Appeals Wednesday reversed a ruling by a district court judge in Miami, who dismissed the workers’ claims that the no-hire clause was an unlawful conspiracy to suppress wages and employee turnover.

The 11th Circuit said the judge erred in finding that Miami-based Burger King Worldwide, its parent companies, and its franchisees had all operated as a “single economic enterprise” that was categorically incapable of conspiring with itself.

“(T)here’s just no question that Burger King and its franchisees compete against each other and have separate and different economic interests,” and that, “in the absence of the No-Hire Agreement,” each franchised restaurant “would pursue its own economic interests and therefore potentially and fully make its own hiring decisions, including about wages, hours, and positions,” Circuit Judge Robin Rosenbaum wrote for the panel.

“They might even attempt to entice stand-out employees to leave one restaurant and join their own. But the No-Hire Agreement removes that ability,” Rosenbaum wrote, joined by Circuit Judge Charles Wilson and Senior Circuit Judge Frank Mays Hull.

Dean Harvey of Lieff Cabraser Heimann & Bernstein, lead counsel for Jarvis Arrington, Sandra Munster and Geneva Blanchard, declined to comment on the pending litigation. The workers’ appeal drew amicus support from the U.S. Justice Department.

Burger King and its attorneys did not immediately respond to requests for comment.

The lawsuit was one of many filed by fast-food workers since 2016, when the U.S. Justice Department and the Washington state attorney general began targeting the industry's ubiquitous use of no-hire or “no-poach” agreements.

Burger King dropped the no-hire clause from its franchise agreements in 2018 as part of a settlement with the Washington attorney general. Several other fast-food chains did the same.

In lawsuits by pre-2018 workers, however, the chains have argued that there was no conspiracy or, in the alternative, that any restraint of trade was not unreasonable.

The judge in the Burger King case found it unnecessary to consider the latter argument, but Burger King urged the 11th Circuit to uphold the dismissal on that ground anyway. The International Franchise Association and the Florida Chamber of Commerce agreed in separate amicus briefs.

The panel declined, saying “those inquiries are best left to the district court” on remand.

The case is Arrington, et al. v. Burger King Worldwide Inc., Burger King Corp., and Restaurant Brands International (NYSE:QSR) Inc., 11th U.S. Circuit Court of Appeals, No. 20-13561.

For Arrington et al.: Dean Harvey of Lieff Cabraser Heimann & Bernstein, Yaman Salahi formerly of Lieff Cabraser, and Derek Brandt of McCune Wright Arevalo

For Burger King: Stuart Singer of Boies Schiller & Flexner; Luis Suarez of Heise Suarez Melville

Ex Burger King workers get another bite at 'no-hire' conspiracy lawsuit
 

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Comments (4)
gab nea
gab nea Sep 04, 2022 6:50AM ET
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Florida sided with the Burger King corporation against the workers! it figures with a warped republican governor. vote all Republicans out!
Samantha
Samantha Sep 03, 2022 7:07PM ET
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And if I was employing operatives to work social media, I would fire the unskilled and happily if they choose to work for competing PR firms. 😎
Samantha
Samantha Sep 03, 2022 6:10PM ET
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There's something to be said for discernment. When that is lost so goes sound reasoning.
Samantha
Samantha Sep 03, 2022 5:58PM ET
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In all sincerity, I do not understand opposing the freedom to choose employers and employees at will as a leftist ideology. As for double standards, real and perceived, that door swings both ways.
Brad Albright
Brad Albright Sep 03, 2022 5:58PM ET
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Because, if you are an authoritarian who doesn't believe in human rights, its what you expect.
Samantha
Samantha Sep 03, 2022 5:58PM ET
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Brad Albright Hey Brad! Happy Labor Day! 🍕🌭🍟🥨🍕
Brad Albright
Brad Albright Sep 03, 2022 5:58PM ET
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Right on!!!
Adrian White
Adrian White Sep 03, 2022 5:58PM ET
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Samantha, you are 100% correct.
 
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