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Before committing to a franchise business, consider...
As the deadline for the Minnesota Anti-Poaching Update draws near, franchisors are reminded to update existing franchise agreements pertaining to non-soliciting and no-poaching restrictions....more
Refusing to rubber-stamp a proposed $5 million anti-poaching class action settlement, a federal court in Kentucky has directed the plaintiff to provide additional information to allow proper consideration of the factors...more
The Seventh Circuit recently revived an antitrust challenge to a clause in McDonald’s franchise agreements barring franchises from poaching other franchises’ employees. (See our previous coverage of antitrust challenges to...more
In an important case of first impression that drew amicus participation from the Department of Justice, the Federal Trade Commission, and the International Franchise Association, the Seventh Circuit reversed a judgment in...more
In Deslandes v. McDonald’s USA LLC, issued August 25, 2023, the U.S. Court of Appeals for the Seventh Circuit overturned the dismissal of antitrust claims that challenged no-poach clauses in franchise agreements....more
A recent opinion by the U.S. Court of Appeals for the Seventh Circuit reinstates allegations against McDonald’s that no-poach provisions in the company’s franchise agreements violate the antitrust laws, holding that such...more
Reflecting a shifting national landscape on restrictive covenants, the Minnesota Legislature recently adopted legislation that prohibits franchisors from placing certain nonsolicitation and no-poach restrictions in franchise...more
Wage-fixing and no-poach agreements will be illegal and subject to criminal penalties and damages actions in Canada as of June 23, 2023, as part of a package of amendments to the Competition Act passed in 2022. The new...more
On January 5, 2023, the Federal Trade Commission (FTC) announced a proposed new rule that would effectively prohibit employers from requiring employees to agree to noncompete clauses. The public is invited to submit comments...more
Arrington v. Burger King Worldwide, Inc., No. 20-13561 (11th Cir. Aug. 31, 2022) – In October 2018, a former line cook of a Burger King franchise restaurant in Illinois, filed a class action complaint in the District Court...more
Eleventh Circuit’s Burger King opinion raises antitrust risks in franchising- Sherman Act challenges to “no-poach” clauses in franchise agreements have been languishing in federal courts for a few years now, but with...more
In early September, the Eleventh Circuit reversed the district court’s judgment for defendants Burger King Corporation, Burger King Worldwide, Inc., and their ultimate parent Restaurant Brands International, Inc....more
Over the last several years, business-to-business “no-hire” and “no-poach” agreements have come under legal attack, including through enforcement actions by the Federal Trade Commission and criminal prosecutions by the...more
In June 2021, the Supreme Court reaffirmed in NCAA v. Alston that antitrust claims under Section 1 of the Sherman Act “presumptively” call for rule-of-reason analysis and that only the rare case merits “quick look” or per se...more
A federal judge in the U.S. District Court for the Northern District of Illinois has held that an antitrust challenge to a “hiring restriction [that] prevented” plaintiff employees “from taking a better-paying position with a...more
The Biden administration's Department of Justice, Antitrust Division (DOJ) continues a practice largely begun under the Trump administration of intervening in private litigation and requesting permission to file statements of...more
New Standard Contract Language for Data Transfers Facilitates Lawful Personal Data Transfers to/from EU and U.S. - In response to the EU Court of Justice Schrems II opinion, which declared that the former EU-US Privacy...more
For the past few years, it seems franchisors have been riding a roller coaster when it comes to no-poach clauses in their franchise agreements. While for a time it seemed as though scrutiny for such clauses might be fading,...more
Two Illinois Federal Courts Deny Class Certification in Anti-Poaching Class Actions Against Franchisors - Two federal courts in Illinois have rejected motions to certify classes of employees who worked in franchised...more
Let’s review the status of activity restrictions in franchise agreements. Do they serve the purpose intended? Are they enforceable? Are they worth it? The Pennsylvania Supreme Court’s decision in Pittsburgh Logistics Systems...more
Illinois Federal Court Excludes Plaintiffs’ Expert Testimony on Certification Motion in Anti-Poaching Class Action - A federal court in Illinois granted Jimmy John’s motion to exclude expert testimony of a putative class...more
In 2016, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) issued Joint Guidance for Human Resource Professionals warning that no-poach agreements restricting employee hiring may violate the antitrust...more
Are franchisees dependent offshoots of their franchisors, or are they standalone businesses capable of independent decision-making?...more
Welcome to The Franchise Memorandum by Lathrop GPM, formerly known as The GPMemorandum. Since December 1997, The GPMemorandum has been presenting summaries of recent legal developments of interest to franchisors and companies...more
Franchise systems, and many licensing arrangements contain anti-poaching provisions. These provisions are being tested under the antitrust laws as being anticompetitive. This article will discuss the benefits and burdens of...more