Burger King will face a lawsuit brought by current and former Burger King employees who say the restaurant franchise violated antitrust laws. Miami U.S. District Judge Jose Martinez ruled that workers in the proposed class action lawsuit have provided enough factual details to support their claims and that the case can move forward.
The lawsuit dates back to 2018 when it was filed against Burger King and its affiliate partners because of the company’s no-hire agreement, which was effective across franchises nationwide.
Under this agreement, franchise owners cannot hire employees from another Burger King for at least six months. These types of agreements, also known as no-poach agreements, have faced scrutiny over the years and have even resulted in an FTC crackdown on such agreements, challenging their legality.
The plaintiffs in the lawsuit say this no-hire agreement violated antitrust laws because it created an unreasonable restraint in the labor market and kept workers' wages low.
The original lawsuit explained, “In a properly functioning and lawfully competitive labor market, Burger King and its franchisees would compete for labor.”
Under Burger King’s no-hire agreement, because franchise owners could not hire a worker from another location for at least six months, plaintiffs argued this prevented workers from advancing within the company and earning higher pay. A natural consequence was that employee wages were kept low.
The lawsuit claims that the no-hire agreement was the result of collusion between franchisees and Burger King to “depress wages and employment opportunities of employees.”
In his order allowing the lawsuit to proceed, Martinez agreed that the workers had successfully demonstrated Burger King’s no-hire agreement caused an “unreasonable” restraint on the labor market and that the case should move forward.
The lawsuit represents several Burger King employees who worked at an Illinois restaurant and is seeking class-action status to represent all others who worked at Burger King since at least 2010.
While Burger King is seeking to have the lawsuit dismissed, the company has not issued a statement in response to Judge Martinez’s ruling. When previously arguing for dismissal, Burger King maintained that the plaintiffs did not present evidence showing antitrust violations or that the no-hire agreement kept wages low.
In 2024, the U.S. Supreme Court refused to take up a similar case against McDonald’s, where plaintiffs argued the company violated antitrust laws by prohibiting franchise owners from hiring employees from other McDonald’s locations.
