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Economy 9 hours ago (Sep 03, 2022 12: 00PM ET)

Ex Burger King workers get another bite at 'no-hire' conspiracy lawsuit Reuters. FILE PHOTO: The to remain a Burger King restaurant is shown in Miami, Florida October 28, 2013. REUTERS/Joe Skipper/File Photo

By Barbara Grzincic

(Reuters) – A federal appeals court has revived a potential class action against Burger King over its prior usage of a no-hire clause that blocked all franchisees from hiring each others employees.

The 11th U.S. Circuit Court of Appeals Wednesday reversed a ruling by way of a district court judge in Miami, who dismissed the workers claims that the no-hire clause was an unlawful conspiracy to suppress wages and employee turnover.

The 11th Circuit said the judge erred to find that Miami-based Burger King Worldwide, its parent companies, and its own franchisees had all operated as an individual economic enterprise that has been categorically not capable of conspiring with itself.

(T)heres just no question that Burger King and its own franchisees compete keenly against each other and also have separate and various economic interests, and that, in the lack of the No-Hire Agreement, each franchised restaurant would pursue its economic interests and for that reason potentially and fully make its hiring decisions, including about wages, hours, and positions, Circuit Judge Robin Rosenbaum wrote for the panel.

They could even try to entice stand-out employees to leave one restaurant and join their very own. However the No-Hire Agreement removes that ability, Rosenbaum wrote, joined by Circuit Judge Charles Wilson and Senior Circuit Judge Frank Mays Hull.

Dean Harvey of Lieff Cabraser Heimann & Bernstein, lead counsel for Jarvis Arrington, Sandra Munster and Geneva Blanchard, declined to discuss the pending litigation. The workers appeal drew amicus support from the U.S. Justice Department.

Burger King and its own attorneys didn’t immediately react to requests for comment.

The lawsuit was among the many filed by fast-food workers since 2016, once the U.S. Justice Department and the Washington state attorney general began targeting the industry’s ubiquitous usage of no-hire or no-poach agreements.

Burger King dropped the no-hire clause from its franchise agreements in 2018 within funds with the Washington attorney general. Other fast-food chains did exactly the same.

In lawsuits by pre-2018 workers, however, the chains have argued that there is no conspiracy or, in the choice, that any restraint of trade had not been unreasonable.

The judge in the Burger King case found it unnecessary to take into account the latter argument, but Burger King urged the 11th Circuit to uphold the dismissal on that ground anyway. The International Franchise Association and the Florida Chamber of Commerce agreed in separate amicus briefs.

The panel declined, saying those inquiries are best left to the district court on remand.

The case is Arrington, et al. v. Burger King Worldwide Inc., Burger King Corp., and Restaurant Brands International (NYSE:) Inc., 11th U.S. Circuit Court of Appeals, No. 20-13561.

For Arrington et al.: Dean Harvey of Lieff Cabraser Heimann & Bernstein, Yaman Salahi formerly of Lieff Cabraser, and Derek Brandt of McCune Wright Arevalo

For Burger King: Stuart Singer of Boies Schiller & Flexner; Luis Suarez of Heise Suarez Melville

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