I do wonder how much informal collusion goes on in small-town labour markets between rival chains, though. I’m willing to bet that the local franchise owners do a bit of wage-fixing at the annual Chamber of Commerce banquets to eliminate that particular Herzberg motivation factor for job hopping as well.
It depends on the state. When I was working as a ‘scraper’ for a not-very-competent but very egotistical web designer, I was forced to sign a cut & Paste mish-mashed non-compete agreement. After reading through it, I signed it BECAUSE I knew it would be unenforceable. Parts of the cut & paste disagreed with other parts, it only restricted me if I worked for the EXACT same type of business (there were only two in my whole state), and most of all, they’re illegal under my state’s constitution. My state is a ‘Right-to-Work’ state, which means the non-compete agreements are unenforceable because you have the Right to Work, and a non-compete interferes with your Right to Work. The boss was from NY, and still hasn’t figured out that the rest of the world is not New York.
Years later, I had a temp job at a dying company that had made all of their (permanent) employees sign Non-Competes. Same thing: The parent company was in a another state, and the HR department just assumed Colorado had the same labor laws.
Having worked for both NY based and California based tech companies, I’ve seen the differences in contracts firsthand. It has often been said that the reason Silicon Valley is in CA and not back east is due to two worker protections that CA has:
You own anything you make in your own time that is not related to your employer’s business in CA.
Non-competes are unenforceable in CA.
You can see, with typical NY machine politics ham-handed incompetence and corruption, NY is trying to incubate tech companies in their “Tech Valley,” and throwing a whole lot of money at it, but they won’t implement the worker protections that actually made SV take off.
Yep… and while I should say it would be the obvious one, you can’t swing a cat without hitting a large tech company here anymore. I used to work for the giant non tech company which should be obvious enough.
As @TheDevil_LLC noted, the non-compete clauses are between franchisees within a chain, not between different chains. They’re still collusion, but could be hidden inside the contract between franchisor and franchisee.
Arby’s and McD’s are rival chains, and entering into formal Silicon Valley style anti-poaching agreements would be obvious and illegal collusion. In contrast, if the local franchisee of a town’s Arby’s and the local franchisee of the same town’s McDs happen to verbally agree that $16/hr is the highest either of them will pay any line employee then who’s to know?
They aren’t. They’re agreements within chains, contained in the contract the franchisee makes with the franchisor.
To keep labour costs low within the franchise within a given region (for the franchisee) and to keep the chain’s advertised prices low (for the franchisor).
Let’s say there are three Arby’s in a particular county: A, B, and C, each owned by a different franchisee. The agreement is meant to make sure that the owner of Arby’s franchise A can’t lure an experienced employee from Arby’s franchise B or C by offering him a higher hourly wage. If the employee tries to move from C to A on his own, his application is likely to be tossed in the trash rather than the franchisee risking being in breach of the clause.
So basically if you work at Arby’s A in that county you’re their serf. You can move to the McDonalds down the street but chances are you’ll be making the same hourly wage because all the county’s franchisees from all the county’s chains know each-other and chat informally at the golf club.
Text is misleading, this really isn’t about non-compete agreements, it’s about wage-fixing collusion among franchise owners disguised as anti-poaching. That’s just evil.
Non-competes are ok with me, as long as they include a clause that I receive garden leave (at full salary) for the duration of the non-compete including cost of living +X% raises each year (where X is negotiable), and I’m free to work in a different non-competitive job during that time if I so choose.
Fast food workers really can’t make such negotiations, and are not even a party to the negotiations between the franchise owners in the first place.
You actually wrote that there is no agreement in your first pragraph and that there is agreement in your last paragraph.
I understand that you mean that the first agreement is a written contract and that the second one is informal. Maybe, but that is not the point.
The point is that the franchisees of different chains agreed not to compete (at the golf club or elsewhere). Ergo: they are not really competitors.
In a capitalistic view, the Blue Burger franchise and the Yellow Burger franchise of Little Rock town would compete and that would also imply triying to offer the best service, which in turn implies trying to get the best personnel. That would not drive wages higher than what still allows them to make a profit, but that would make them readily accept the best employees of the other chain if they wished to jump ship and maybe also try to lure them in with better conditions. But, as you noted, they do not do that.
And in my admitedly limited experience in rural USA, fast food joints indeed do not compete. They basically all serve the same low quality food, have the same relatively low service level and similar prices. Interestingly, family owned restaurants usually had markedly better service when I was there, so maybe they are the only ones who are not part of the general non-competition agreement.
I don’t think that’s how you get on their radar. Your old boss knows your new boss and since they have this ‘agreement’ between them your new boss just lets your old boss know they’re looking to hire so and so, and then all of a sudden its “We decided to go with another candidate but thank you for applying. We’ll let you know if anything comes up”, in your face all day long.