I wouldn’t laugh. They are potentially quite enforceable in the UK.
More relevantly, they are the sort of clause that don’t ever have to be enforced because franchisees don’t breach them.
Why would they if it means losing their franchise?
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That’s correct. The owners signed a non-compete with other franchisee owners of the same franchise. There was nothing stopping a McDonald’s from hiring a Wendy’s employee.
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Not limited to just fast food, Costco does this as well, and I would assume that other big box/warehouse retailers do the same thing.
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Non compete agreements are often enforceable in right-to-work states because right to work doesn’t actually mean what it says. Right-to-work laws are designed to hamper unions by allowing workers to opt out of paying dues in a unionized workplace while still enjoying the benefits of collective bargaining. This creates so many free riders that the the union can’t financially sustain itself and eventually dissolves. If anything, right-to-work states have employment law that is very heavily tilted in the boss’ favour, including enforceable non-compete clauses.
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“Right to Work” = right to poverty. Often seen paired in the wild with “at-will employment” (= at the employers will, not your’s, silly worker). These are not things that humans who have to work for a wage should want in their lives.
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More relevantly, they are the sort of clause that don’t ever have to be enforced because franchisees don’t breach them.
I think this is a key point. There are two things being conflated in this thread: non-compete clauses that I might sign as part of my employment contract which purport to restrict me from applying for or accepting jobs with my employer’s competitors, and “non-poaching” clauses embedded in contracts my employer signs with another company, in which my employer agrees not to “poach” the other companies employees. (I’m using “non-poaching” as a shorthand; these clauses often restrict much more than just poaching).
If it’s a clause in my employment contract, then if I breach the clause my employer (or probably former employer at that point) might come after me and I can argue that the clause is non-enforceable. But in this case, it’s a clause in a contract between the franchisees and head office. So it doesn’t matter if it’s enforceable - the other franchisees will abide by it, and the employee has no opportunity to dispute it. They might not even know the clause exists. They’ll know they didn’t get the job they applied for, but they might never get told why.
It’s not a “McJob”, but I do a lot of work with IT consulting contracts. I see these similar clauses all the time and despise them, but negotiating them away can be a massive challenge.
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Maybe in your state, but not in Colorado.
Colorado.gov Labor and Employment
"(2) Any covenant not to compete which restricts the right of any person to receive
compensation for performance of skilled or unskilled labor for any employer shall be void,
but this subsection (2) shall not apply to:…"
I’ll let you read the rest of the page, but I researched this before I signed the un-enforceable non-compete clause, because I knew it wouldn’t stick.
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In this case we’re largely talking about employees within the same geographic area and same chain, just different franchisees. So, yeah it is that small of a group. It has been years since I worked fast food but it was common for franchise owners to visit nearby locations owned by another franchisee, largely for ideas but they weren’t shy about trying to knock out some competition if they saw a violation of the franchise terms.
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Google paid out about a billion dollars for these same kind of no-poaching agreements that Eric (adult supervision) Schmidt had with competitors after a class action suit.
Remember that whole “data-driven surveillance became cheap and ubiquitous” thing that happened over the past few decades?
Even if there isn’t a sketchy trade organization dedicated to blacklisting; it’d pretty much be a race to see which inferential mechanism would tip the data brokers off fastest: Odds are good that the change in employment status would show up in credit reporting first; but LPR aggregation, the same payroll processor serving both current and prior employer and providing a little ‘value added’ service; or any of a variety of other possibilities aren’t implausible.
It’s been a while since you had to be somebody to merit attention.
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The irony is that from the perspective of any particular franchisee, this works against their interests in hiring qualified candidates. If McDonald’s A can save many thousands in training costs by hiring someone who wants to leave McDonalds B, they are effectively losing those thousands by being forced instead to hire someone who hasn’t worked McD ever and spend to train.
Heck in theory it might even prevent people from applying at their first McD if they know it is that much more of a dead end.
Only the guys at corporate actually benefit.
I wouldn’t be surprised if it was the franchises themselves that pushed this change through.
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