Fast-Food Chains Back Away From Limits On Whom They Hire Seven fast-food franchises, facing potential prosecution from the state of Washington, abandoned a practice critics say hurt workers' chances of earning more and moving up the ladder.

Fast-Food Chains Back Away From Limits On Whom They Hire

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Seven big fast-food chains have backed down under pressure. They've agreed to stop blocking workers from taking jobs at other restaurants in the same chain. Washington state's attorney general was threatening to sue over this. And now, the chains, including Arby's, Jimmy John's and Cinnabon, among others, will stop enforcing or using these practices across the U.S. Here's NPR's Yuki Noguchi.

YUKI NOGUCHI, BYLINE: For many years, fast-food franchises agreed not to recruit or hire each other's workers within the same chain. These no-poach agreements, as they are known, meant a worker couldn't get better pay or move up the ladder by going to another location within the chain. Washington state's top government attorney, Bob Ferguson, says such agreements are clearly illegal.

BOB FERGUSON: These no-poach clauses, I think, are an example of a rigged system. You're a worker. You have no idea this clause exists. You haven't signed it. And yet when you try to go to another business to improve your wages, you can't do it because of this condition in a contract that you never signed.

NOGUCHI: Ferguson says the fact that the seven chains conceded bodes well for workers at other fast-food chains.

FERGUSON: We have a lot more fast-food chains that we're investigating and that we expect to come to the table and sign similar deals. If they don't, we will litigate.

NOGUCHI: Princeton economist Alan Krueger has written about the prevalence of no poach agreements in most franchise operations, not just in fast food.

ALAN KRUEGER: I think it's a major accomplishment.

NOGUCHI: He says such restrictions make the labor market work inefficiently, keeping wages artificially low.

KRUEGER: I think it's very hard to come up with a sound business justification for this practice other than reducing competition for workers.

NOGUCHI: Ferguson and other attorneys general say they will also seek to end the practice in other franchised industries as well. Yuki Noguchi, NPR News, Washington.

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