Ever since the Departments of Justice and Federal Trade Commission issued guidance in 2016 stating it is illegal for competitors to agree not to compete with one another on the terms of employment, no-poach provisions found in franchise agreements have been attacked by politicians, states' attorneys, and general and private plaintiffs. Employees of fast food franchisees allege that such provisions between horizontal competitors for labor are unreasonable restraints of trade that are per se violations of the Sherman Act. Franchisors generally counter that the provisions pass muster under the rule of reason because they are between vertical competitors and have pro-competitive benefits.
A. Christopher Young, a partner with Pepper Hamilton and chairman of the Franchise, Distribution and Marketing Section of the firm's Trial and Dispute Resolution Practice Group, will be joining John Radice, a partner with the Radice Law Firm, for this CLE program titled "Recent Legal Challenges to No-Poach Provisions," hosted by the Philadelphia Bar Association (PBA's) Antitrust Law and Franchise Law Committees.
This program will examine the following topics:
- Recent governmental and private plaintiff challenges to no-poach provisions in franchise agreements
- Early judicial decisions on what standard of review should apply
- Challenges courts are likely to face in applying competition rules governing supply side dual distribution systems to buy side restraints
- What these antitrust challenges mean to the future use of no-poach or no-hire provisions in commercial contracts.