Many successful people got their first jobs at fast food restaurants

Jeff Bezos worked at McDonald's, for example. Barack Obama scooped ice cream at Baskin Robins, and even Madonna worked at Dunkin' Donuts.

But, you don't often hear about people who jumped from one fast food restaurant to another--for higher wages, a better schedule or a promotion.

Maybe it's partly because of a sneaky way big chain restaurants have been agreeing behind the scenes not to hire each others' workers?

That's exactly what anti-poaching investigations launched by 11 states claimed. Now, over the past few months and culminating Tuesday, a total of 15 major fast food chains have agreed not to do it anymore, including McDonald's, Applebee's, Panera Bread, and others.

Here's how it all worked, along with which big chains have agreed to stop (and six others that allegedly are still doing it).

"No-poach" clauses

It's pretty simple and straightforward. Maybe even brazen.

Franchisees of some of the big chains were apparently required to agree not to hire employees who had worked at another franchisee of the same chain.

So for example, if you opened a new McDonald's, you couldn't staff it by hiring away the employees of another McDonald's. 

Princeton economists who looked at this said last year that they thought about 70,000 U.S. fast food and casual dining restaurants had the clauses in their franchise agreements, adding up to about 25 percent of chain restaurants.

As economists often do, they looked at this from a macro perspective, concluding that it kept wages lower, reduced turnover, and stifled competition.

Perhaps most sneaky: Workers usually had no idea that the agreements were in place.

Thus, they were potentially stuck artificially in their jobs, with less leverage to negotiate pay, hours, or conditions--and never understanding the real reason why they never got offers from competitors.

McDonald's, Burger King, Wendy's, etc.

But, they won't be doing it anymore, at least at 15 fast food chains.

On Tuesday, eight fast-food and casual dining restaurants agreed to remove anti-poaching language from its franchise agreements, following seven others who did so last month.  Here's the list of restaurants that agreed to the deal with the Washington state attorney general:

  • Arby's (agreed in July)
  • Carl's Jr. (agreed in July)
  • McDonald's (agreed in July; reportedly had voluntarily abandoned the practice in March)
  • Jimmy John's (agreed in July)
  • Auntie Ann's (agreed in July)
  • Buffalo Wild Wings (agreed in July)
  • Carl's Jr. (agreed in July)
  • Cinnabon (agreed in July)
  • Applebee's (agreed Tuesday)
  • Church's Chicken (agreed Tuesday)
  • Five Guys (agreed Tuesday)
  • IHOP (agreed Tuesday)
  • Jamba Juice (agreed Tuesday)
  • Little Caesars (agreed Tuesday)
  • Panera Bread (agreed Tuesday), and 
  • Sonic (agreed Tuesday)

"As part of their agreements with the attorney general's office, the restaurants will no longer enforce existing no-poach agreements, and will remove the language from future contracts," reports The New York Times.

But, at least six others are still being investigated, according to the trade publication, Restaurant Business. They include: Burger King, Dunkin' Donuts, Five Guys, Little Caesars, Popeyes and Wendy's.

Not on the list, and probably never will be? Starbucks and Chick-fil-A, in which the companies themselves own all the stores, and In-N-Out Burger, which is owned by a 36-year-old billionaire, Lynsi Snyder, who inherited the company from her grandparents--and who reportedly pays her top managers really, really well.

Published on: Aug 22, 2018
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