Washington AG names potential anti-trust violators in 'no-poach' investigation

SEATTLE — Merlee Sherman was a Jimmy John's courier looking to move up, but an agreement among local Jimmy John's franchisees not to hire employees away from one another kept her from doing so.

"There is not mobility for me to receive better pay at another Jimmy John's," she said at a news conference with Attorney General Bob Ferguson in July.

That was before Jimmy Johns and other chains agreed to drop the so-called "no poaching" clause under pressure from the Attorney General's office.

We sat down with Ferguson as he prepared to announce Thursday's agreement with eight more restaurants, bringing the total number to 23.

"These no-poach agreements really depress wages for a very simple reason; it limits their options in the field they work to get another job at a better wage."

Ferguson has just signed agreements with A&W, Burger King, Denny's, Papa Johns, Pizza Hut, Popeyes, Tim Hortons and Wing Stop. All have agreed to eliminate no-poach clauses, not just in Washington but for all employees nationwide.

"Those were my terms, that was my non-negotiable; that was my bottom line," Ferguson said.

But now for the first time, Ferguson is naming companies he says have been unwilling to give up no poach agreements: Baskin Robbins, Domino's, Quiznos, Firehouse Subs, and Jersey Mike's.

"In particular, Jersey Mike's and Domino's have been, I think it's fair to say, uncooperative at this stage," Ferguson said.

In a statement to KIRO 7, Domino's said they're released franchisees nationwide from any obligation to comply with a no-poach agreement.

Baskin Robbins, told us it is talking with the Attorney General's office and hopes to have a resolution shortly.

Jersey Mike's general council said it eliminated its no-poach clause in February. In a phone interview, John Gelson said the company didn't want to participate in what he believes is a "publicity stunt."

Ferguson says his team is beginning to look for no-poach agreements in other industries.

"We've already started investigations in multiple other areas. Hotels, for example; we've started our investigations there and we're going to continue in other areas, gym's, you name it," Ferguson said.

Companies will have to satisfy Ferguson says he wants companies to sign legally binding agreements that they are giving up no-poach clauses nationwide. Otherwise he says, he'll see them in court.

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