Skip to content

Menu

LexBlog, Inc. logo
CommunitySub-MenuPublishersChannelsProductsSub-MenuBlog ProBlog PlusBlog PremierMicrositeSyndication PortalsAboutContactResourcesSubscribeSupport
Join
Search
Close

Washington v. Washington: State of No-Poach

By Natalma M. McKnew on May 26, 2020
Email this postTweet this postLike this postShare this post on LinkedIn

The Department of Justice backed off no-poach challenges in franchise agreements in 2019, but the state doubled down. The result? Washington state challenged a raft of no-poach/no-hire provisions in 225 franchise systems, resulting in agreements requiring franchisors to agree not to enforce the offending provisions not just in Washington but nationwide. On April 28, 2020, Washington AAG Rao declared victory, characterizing the DOJ’s approach as “somewhat misguided.”

Does Washington State’s victory celebration mean that other franchisors needn’t worry about enforcing such clauses? I think the answer is a clear NO. Although the Department of Justice has redirected its concern from no-poach/no-hire provisions in franchise agreements, Congress has not. Bills outlawing such provisions have been filed in the House and the Senate, e.g., H.R. 5710 and S. 2614. While the future of these legislative attempts is unclear, we can expect the efforts to continue. In addition, several states have enacted legislation prohibiting these provisions, and notably banded together to pursue settlements banning the enforcement of such restrictions in franchise agreements.

Perhaps most perilously, the federal-state tug of war over these provisions has sparked private litigation and a divergence of judicial views as to whether the restrictions are per se antitrust violations or whether their anticompetitive effects (and potential illegality) should be assessed under the more forgiving rule of reason or in between “quick look” analysis. Private litigation and the battle over the appropriate analysis is likely to continue.

And I’m not betting against Washington State cranking its enforcement engine back up.

  • Posted in:
    Corporate Compliance
  • Blog:
    Franchise Law Update
  • Organization:
    Fox Rothschild LLP
  • Article: View Original Source

LexBlog, Inc. logo
Facebook LinkedIn Twitter RSS
Real Lawyers
99 Park Row
  • About LexBlog
  • Careers
  • Press
  • Contact LexBlog
  • Privacy Policy
  • Editorial Policy
  • Disclaimer
  • Terms of Service
  • RSS Terms of Service
  • Products
  • Blog Pro
  • Blog Plus
  • Blog Premier
  • Microsite
  • Syndication Portals
  • LexBlog Community
  • 1-800-913-0988
  • Submit a Request
  • Support Center
  • System Status
  • Resource Center

New to the Network

  • Pro Policyholder
  • The Way on FDA
  • Crypto Digest
  • Inside Cybersecurity & Privacy Law
  • La Oficina Legal Ayala Hernández
Copyright © 2022, LexBlog, Inc. All Rights Reserved.
Law blog design & platform by LexBlog LexBlog Logo