McDonald’s Faces Judges’ Skepticism Over No-Poach Agreement (1)

McDonald’s procompetitive justifications for its no-poach agreement with its franchisees got a wary reception from the Seventh Circuit during a hearing Friday morning.

McDonald’s franchise agreements previously contained a no-hire provision that barred franchisees from pursuing or hiring current McDonald’s employees without a letter of release or within six months after their employment ended. Two employees brought a proposed class action, alleging the provision violated federal antitrust law and prevented workers from moving to higher-paying locations.

McDonald’s argued that the provision was necessary to prevent franchisees from stealing other’s employees and free riding of training costs and to improve procompetitive, ...