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No-Hire Provisions in McDonald’s Franchise Agreements, an Antitrust Violations or Evidence of Joint Employer?

By  |  March 1, 2021

By Andrele Brutus St. Val (University of Pittsburgh)

As the archetypical franchisor and industry leader, McDonald’s has come under much public and legal scrutiny in recent years for its business practices and its effects on low-wage and unskilled employees. Its no hire provision—which is a term included in its franchise agreements with franchisees that bars franchisees from hiring each others employees—has been found by economist to suppress wages and stagnate growth. This provision is being challenged under antitrust law while its employment practices are being disputed under labor law. McDonald’s is defending its business practices by presenting two seemingly contradictory defenses. This article explores how McDonald’s position in antitrust litigation over the use of no-hire agreements is inconsistent and arguably antithetical to its position in labor cases concerning joint-employer liability for the conduct of its franchisees thus allowing it to have its proverbial cake (or fries) and eat it too.

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