State and federal antitrust enforcers are squaring off in Washington state over whether employee no-poaching agreements among fast-food chain operators are anti-competitive.

In a rare move, Washington State Attorney General Robert Ferguson March 1 said he opposes the Justice Department on the issue, arguing that such agreements among restaurant franchisees are always anti-competitive. The DOJ, under antitrust chief Makan Delrahim, said March 7 that such agreements can have some pro-competitive benefits and courts should weigh those justifications.

The...