The Columbia District along with ten states is probing many fast-food chains along with Wendy’s for using “no poach” agreement which restricts the workers to switch their employment.
Companies like high-tech use “non-compete” clause to protect trade secret and have a restriction on their employees that where they work in the future once they leave their employment. But the same limitation is also imposed by fast-food franchises on their staff.
It is very common for a franchise to not hire an employee who was employed at a different franchise in the same industry. The practice coming under the sight of lawmakers and regulators concerned about it that it restricts the individual’s ability to get better work opportunities.
Attorney general, Josh Shapiro, Pennsylvania, says, “The aim of the investigation is to know the number of individuals that are influenced with this clause and how it is impacting the ability of an individual to grow in its career.”
However, the clause of non-compete which restricts an individual to go for a better job with similar job responsibilities in the same domain is practicing very commonly in some profession which involves intellectual property and trade secret, lawmakers argue that it is not justified to have the same clause in low-wage jobs like restaurant work.
Shapiro says almost 4 out of 5 fast-food chain owners are following this practice. However, the restaurant industry is shifting as well, says Haller. Some of the fast-food owners have already put a halt on the practice, though the brands’ names are not disclosed.
He says, “The business model has a purpose of making people succeed in their venture, and when there are some clauses which are badly impacting the ability of the employee, we need to take required steps to deal with it.”
The attorney general of state asked the fast-food chain owners to submit required information of their no-poach clause.