Class Sues McDonald’s Over No-Poaching Franchise Policy

CHICAGO (CN) – McDonald’s employees filed a class action against the fast-food chain over its no-poaching policy prohibiting one franchise from hiring employees of another franchise for a six-month period.

Leinani Deslandes was employed as a mid-level manager at a Florida McDonald’s making $12 an hour when she applied to another McDonald’s restaurant that paid substantially more for the same position – $14.75 an hour after a 90-day probation period – and offered better promotion opportunities.

But she says she was rejected for the job because the restaurant could not hire her unless she was “released” by her current franchise owner.

The terms of the McDonald’s franchise agreement prohibits franchisees from “poaching” other McDonald’s employees if they have been employed by another McDonald’s restaurant within the past six months.

Deslandes claims her employer refused to release her to work at the better-paying job, and denied her a raise.

Ultimately, Deslandes quit her job and was forced to take an entry-level position in another industry, she says.

Her class-action lawsuit, filed Wednesday in Chicago federal court, asserts that McDonald’s no-poaching policy restricts wage competition and suppresses employees’ pay.

“The collusion of employers to refrain from hiring each other’s employees restricts employee mobility. This raises employers’ power in the market at the expense of employees and diminishes employee bargaining power,” the complaint states.

This is especially true given that McDonald’s employees’ skills are most valuable to other McDonald’s restaurants, the lawsuit adds.

“This agreement, far from being a ‘commitment to [its] people,’ instead harmed employees by lowering salaries and benefits they otherwise would have commanded in an open marketplace, and deprived such employees of better job growth opportunities,” Deslandes says.

The average wage of a fast-food worker is $9.09 per hour, which only amounts to $19,000 per year, far below the poverty level for a family of four, which is $23,850.

Deslandes’ attorney, Richard McCune with McCune Wright Arevalo, compared McDonald’s policy to wage-slavery.

“This practice of ‘owning’ an employee not only affected Ms. Deslandes and other employees where their franchise owner will not ‘release’ them, but it artificially holds down the wages of all of the McDonald’s workers that are being paid less than their true market value and are struggling to make ends meet,” McCune said in a statement. “Meanwhile, McDonald’s stockholders, executives and franchise owners are getting rich off the backs of these workers.  This is unfair, and a practice that should not be allowed to continue.”

The proposed class seeks damages for alleged antitrust violations and an injunction forcing McDonald’s to stop enforcing the restrictive policy.

In addition to McCune, the class is also represented by Derek Brandt with Brandt Law in Edwardsville, Ill., and Jason K. Whittemore with Wagner McLaughlin in Tampa.

McDonald’s did not immediately respond Friday to a request for comment.

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