Fast Food Chains Trap Workers with Non-Compete AgreementsAugust 30, 2018
Non-compete agreements are a type of agreement that does not permit a company employee from starting a competitive business within a certain period after leaving, or from working for a competitor with whom they may share proprietary information. You might think working at a fast food chain is not the type of job that inspires non-compete agreements, but you would be mistaken. The fast food industry regularly makes workers sign agreements stating that they cannot leave their current job for another, higher-paying position in the same chain.
More than 50 percent of franchises have these agreements in place. Many workers do not realize they have signed such agreements until they attempt to make the move. Now, officials from several states, including New Jersey, want information from fast food chain restaurant operators about how non-compete agreements keep workers from becoming employed by a rival franchise owner in the same chain.
Letter from State Attorneys General
Earlier this year, a letter signed by the attorney general of Massachusetts went out to the corporate offices of some of the largest fast food chains in the country, including Dunkin’ Donuts, Burger King, Panera Bread, Wendy’s, Arby’s, Little Caesar’s, Five Guys Burgers and Fries, and Popeye’s Louisiana Chicken. The letter stated that officials believed these companies were using these agreements.
The letters were also signed by attorneys general in several states. It further requested that the companies reconsider the use of such agreements, on the grounds that they harmed workers and did not allow other franchises to benefit from experienced employees. Dunkin’ Donuts claimed they did not use such agreements and other companies did not respond to newspaper inquiries for comment.
New Jersey Senator Cory Booker has co-sponsored federal legislation to ban these agreements. Such agreements are not limited to the fast food industry, although franchisees in other fields, such as Jiffy Lube and H&R Block, have similar non-compete agreements that restrict workers’ rights. For example, an employee at a franchise may work 25 miles away. If the same franchise opens in their town, due to a non-compete agreement, they cannot apply to work at the local franchise.
For their part, franchise owners argue that non-compete agreements are necessary to protect the investment they make in their employees. While federal legislation may not stop these agreements any time soon, various states are considering a ban on non-compete agreements for low-wage employees.
New Jersey Employment Lawyers at Sidney L. Gold & Associates, P.C. Help Clients with Non-Compete Agreements
If you or a loved one has been the victim of an unfair non-compete agreement, you need the services of the experienced New Jersey employment lawyers at Sidney L. Gold & Associates, P.C. Call us today at 215-569-1999 or contact us online for a free consultation. We are in Philadelphia, and we serve clients from the surrounding areas, including the state of New Jersey.