Justice Department Defends Stance on Fast Food No-Poach Pacts

The Justice Department defended its stance on no-poach agreements saying that such contracts shouldn’t be deemed automatically illegal since they can protect small business owners.

In the franchise context, notably with fast food chains, such agreements give small business owners “assurances” that new employees can’t immediately jump to a competitor after resources and time have been spent training new hires, Makan Delrahim, the chief of the DOJ’s antitrust division, said Nov. 13 during a House Judiciary antitrust subcommittee hearing.

No-poach agreements, which involve companies agreeing not to hire each others workers, typically are viewed as anti-competitive since they can drive ...