Nominee

Recent Developments in Litigation and Regulation Related to No-Hire and Employee Non-Compete Agreements: Implications for Franchise Systems

Click here to read the full article online

In recent years, antitrust issues in the labor market—in the form of no-hire and employee non-compete agreements—have come under increased scrutiny from regulators, legislators, and private plaintiffs. To provide insights on the growing regulatory challenges and litigations involving these types of agreements, especially within the context of franchise systems, Analysis Group Vice Presidents Aaron M. Fix and Jee-Yeon Lehmann, and Manager Michael Schreck authored an article for Distribution: The Newsletter of the Distribution & Franchising Committee of the Section of Antitrust Law of the American Bar Association, titled “Recent Developments in Litigation and Regulation Related to No-Hire and Employee Non-Compete Agreements: Implications for Franchise Systems.” This article discusses relevant legal precedents for these agreements, important economic issues that they raise, and their significance for franchise systems. The authors detail key considerations for determining when franchise no-hire agreements may constitute an antitrust violation, including the extent of independence of economic interests across franchisees and whether the no-hire agreements facilitate a more efficient franchise system operation. The authors also discuss conditions for evaluating when employee non-compete agreements may be subject to antitrust scrutiny, particularly with respect to low wage workers.