© Reuters. FILE PHOTO: A Burger King restaurant sign is displayed in Miami, Florida October 28, 2013. REUTERS/Joe Skipper/File Photo
By Barbara Grzincic
(Reuters) – A federal appeals court has revived https://fingfx.thomsonreuters.com/gfx/legaldocs/znvneweoopl/Arrington%20v%20Burger%20King.pdf a potential class action lawsuit against Burger King over its past use of a “no-hire” which prevented all franchisees from hiring the employees of others.
The 11th U.S. Circuit Court of Appeals on Wednesday overturned a decision by a Miami District Court judge, who dismissed workers’ claims that the no-hire clause was an unlawful conspiracy to remove the workers. wages and employee turnover.
The 11th Circuit said the judge erred in finding that Miami-based Burger King Worldwide, its parent companies and its franchisees all operated as a “single economic enterprise” that was categorically incapable of conspiring with itself.
“(T)there is no doubt that Burger King and its franchisees compete with each other and have distinct and different economic interests”, and that, “absent the non-employment agreement”, each franchised restaurant” would pursue its own economic interests and therefore potentially and fully make its own hiring decisions, including with respect to wages, hours and positions,” Circuit Judge Robin Rosenbaum wrote for the panel.
“They might even try to entice outstanding employees to leave a restaurant and join theirs. But the non-hiring agreement removes that ability,” wrote Rosenbaum, joined by Circuit Judge Charles Wilson and Senior Circuit Judge Frank Mays Hull.
Dean Harvey of Lieff Cabraser Heimann & Bernstein, lead attorney for Jarvis Arrington, Sandra Munster and Geneva Blanchard, declined to comment on the ongoing litigation. The workers’ appeal has won amicus support from the US Department of Justice.
Burger King and its attorneys did not immediately respond to requests for comment.
The lawsuit was one of many filed by fast food workers since 2016, when the US Department of Justice and the Washington State Attorney General began targeting the industry’s pervasive use of no-hire or “no-poach” agreements.
Burger King removed the no-hire clause from its franchise agreements in 2018 as part of a settlement with the Washington attorney general. Several other fast food chains have done the same.
In pre-2018 worker lawsuits, however, the chains argued there was no conspiracy or, alternatively, that any restrictions on trade were not unreasonable.
The judge in the Burger King case found it unnecessary to consider the latter argument, but Burger King urged the 11th Circuit to uphold the dismissal on this ground anyway. The International Franchise Association and the Florida Chamber of Commerce agreed in separate amicus briefs.
The panel declined, saying “those investigations are best left to the district court” on remand.
The case is Arrington, et al. vs. Burger King Worldwide Inc., Burger King Corp. and Restaurant Brands International (NYSE:) Inc., 11th US Circuit Court of Appeals, No. 20-13561.
For Arrington et al. : Dean Harvey of Lieff Cabraser Heimann & Bernstein, Yaman Salahi formerly of Lieff Cabraser and Derek Brandt of McCune Wright Arevalo
For Burger King: Stuart Singer of Boies Schiller & Flexner; Luis Suarez by Heise Suarez Melville