Skip to content

Menu

LexBlog, Inc. logo
NetworkSub-MenuBrowse by SubjectBrowse by PublisherJoin the NetworkGet StartedSubscribeSupportContact
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:
    Antitrust, Competition and Trade, Business and Commercial
  • Blog:
    Franchise Law Update
  • Organization:
    Fox Rothschild LLP
  • Article: View Original Source

Call us at 1-800-913-0988 or email sales@lexblog.com.

Facebook LinkedIn Twitter RSS
The Library at LexBlog
  • About LexBlog
  • The Field We Built
  • Library at LexBlog
  • Our Beliefs
  • Our Team
  • Contact LexBlog
  • Disclaimer
  • Editorial Policy
  • Terms of Service
  • Get Started
  • Publishing Solutions
  • Compass
  • Submit a Request
  • Support Center
  • System Status
Copyright © 2026, LexBlog, Inc. All Rights Reserved.
Law blog design & platform by LexBlog LexBlog Logo