Burger King is set to face a major legal challenge after a federal judge ruled that a lawsuit accusing the fast-food chain of suppressing employee wages through anti-competitive practices can move forward.
In a decision handed down Wednesday, U.S. District Judge Jose Martinez in Miami said that current and former Burger King workers had presented enough evidence for their lawsuit to proceed. The case alleges that Burger King used “no-hire” agreements across its franchise network, limiting employee movement and keeping wages low.
The lawsuit, originally filed in 2018, claims Burger King violated U.S. antitrust laws by preventing franchisees from hiring each other’s workers. These agreements typically barred one Burger King location from hiring someone who had recently worked at another location, often for at least six months.
Judge Martinez ruled that the plaintiffs made a strong enough case to suggest that these agreements may have unfairly restricted competition in the labor market. “In a properly functioning and lawfully competitive labor market, Burger King and its franchisees would compete for labor,” the lawsuit states.
Burger King has denied any wrongdoing and had asked the court to dismiss the case. The company argued that the plaintiffs failed to prove that the no-hire policies had any direct impact on worker wages. However, Judge Martinez disagreed, calling the alleged practices an “unreasonable” restraint on competition.
The case includes workers from Illinois and other states who were employed at Burger King restaurants from 2010 onward. The plaintiffs are seeking monetary damages and are asking the court to grant class-action status, which could include thousands of current and former employees across the country.
Lawyers representing the employees include Joseph Meltzer of Kessler Topaz Meltzer & Check and Richard McCune of McCune Wright Arevalo. Defending Burger King are attorneys Stuart Singer and Carl Goldfarb from Boies Schiller Flexner.
This case follows a similar one involving McDonald’s, where the U.S. Supreme Court last year declined to block a lawsuit over comparable “no-poach” policies. That decision cleared the way for increased scrutiny of labor practices in the fast-food industry.
The Burger King case is formally titled Jarvis Arrington et al v. Burger King Worldwide et al, U.S. District Court, Southern District of Florida, No. 1:18-cv-24128-JEM.
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